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Microcap & Penny Stocks : Rentech(RTK) - gas-to-liquids and cleaner fuel -- Ignore unavailable to you. Want to Upgrade?

To: Dan O. who wrote (11183)	10/23/1998 2:16:00 PM
From: Andrew H	Read Replies (2) \| Respond to of 14347

The latest Dooper gem from RB on COAL: >>By: Dooper55 Reply To: None Friday, 23 Oct 1998, 11:52 AM EDT Post # of 1237 China/India..RNTK..coal..good stuff In talking to RNTK and reading their tech papers, it's obvious they're excited about the potential for TX/RNTK IGFT in China and India. So I decided to crunch some numbers for that area. Now I know why They're excited. From DOE/EIA - 0484 (98), April 1998: Projections show China and India combined adding about 20 gigawatts of coal-fired power plants every year for the next 20+ years. Additional 480 gigawatts by 2020. From RNTK paper at the Pittsburgh coal conference 9/98: China and India have the opportunity to implement this power generation complex using the IGCC/IGFT approach that gives the highest energy efficiency (least environmental impact) and, simultaneously/fortuitously, the maximum valuable F-T liquid products. If they did that, it would add 500,000 bpd of valuable liquid hydrocarbons every year, supplanting imports. 11.5 million bpd of F-T products in 2020. "With both China and India expected to be net importers of petroleum products, China at an estimated total of 7 million barrels per day from OPEC alone by the year 2020, this could be a matter of extreme economic importance." My observations: - If TX/RNTK is used, I assume RNTK would get a royalty of $0.15 (worst case) to $.0.50 (best case, impossible because TX does all the work) per barrel of F-T product.....so I use $0.33 per barrel. As in all of this, pick whatever numbers you feel are proper. - The max opportunity is if all of the new power plants are done with the best IGCC/IGFT. This clearly won't happen but it sets the upper limit of the RNTK opportunity from planned China/India power generation additions. - So, best case is adding $165,000 per day per year for the next 22 years (500,000 bpd times $0.33 per barrel). That would ADD $60M to RNTK near-zero-cost revenues (profits) EVERY YEAR through 2020. - Now the guessing starts. Do you believe 10% penetration by TX/RNTK ??? With 10%, first year (maybe 2002ish?) $6M, 2nd year $12M, 3rd year $18M,........, 20th year $120M. ........Profits...... - The coal-fired power generators will be built. The gigawatts per year could be a little different than predicted. - Key factors in any analysis are: 1) when it starts 2) how much coal-fired power generation is added per year 3) what percentage of that is done with the best TX/RNTK IGCC/IGFT (using "lesser" TX/RNTK IGCC/IIGFT could knock the F-T products by a third) 4) how much RNTK gets per barrel All of this assumes RNTK's payoff is purely royalties. If license fees are in the TX/RNTK agreement, the structure, amount and timing of the returns to RNTK could very well change. Without agreement details, we just have to guess. It's easy to pick a pessimistic China/India case that still substantially outstrips RNTK's very nice Orinoco opportunity. Best wishes, Doop III <<