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Second call, more information:
1) The company is getting together all of the necessary documentation to achieve an AIM listing by the end of 2007.
At least, that is their plan.
2) Concerning the share repurchase program, they have allocated $6 million for this purpose and have already re-purchased 30 million shares.
3) Concerning production (and I hope my figures are correct),
the current rate is 876,000 barrels for the year, or 120,000
tons. By January, 2008, they expect production to increase to a rate of 1,300,000 barrels per year or 180,000 tons.
4) The company's pps projection is .30 by September and
1.00 by year end.
5) Concerning Syria, they expect to begin preparation of an agreement with the government by the end of the summer.
6) The audited financial statements will be out tomorrow.
Well, here are some answers I got, but it was difficult to understand through a translator. I feel everything I heard should be confirmed by others calling in.
1) The merger with a company in the Saratov region is with a private company that already has oil production and a license
until the year 2025. They could not reveal the name of the company.
2) The Middle Eastern deal is with a public Russian company
but they would not give the name. They did say that the deal involves Algeria and not Libya. NWOG will get 50% of the oil production from this deal.
3) Concerning Nord Oil assets, they said they still have those assets and plan to sell them to purchase other assets. The licenses that belonged to Nord Oil are still good. They also said their talks with NDOL had always been about a merger and not a buyout.
Farkin' Parkin.
The American Coalition for Ethanol (ACE) responds to critics
http://www.csnews.com/csn/news/article_display.jsp?vnu_content_id=1003581795
Spec -- Well, one thing we know for sure is that we DO have production with NWOG. I doubt whether Malyshev will ever spill the beans about his dealings with Nord Oil and Monimpex. The best thing he can do now is create the image of a new company and I think that will be accomplished with the proposed merger and/or AIM listing. I know EIK has not wanted to bring up the past in his talks with NWOG management as it may be considered some kind of breach of confidentiality, or it may just be too sensitive an area. I'm planning to put in a call tomorrow, and I will see how they respond to this line of questioning.
OT
For out-of-towners, Skid Row was the name of a New York City neighborhood also known as The Bowery, part of Manhattan's Lower East Side. About a century ago, and during the depression of the 1930's, it was populated primarily by homeless drunks and prostitutes. The liquor was so cheap that it could cause blindness or death. During the worst of times, hundreds of skid row residents would line up for hours just for free a bowl of soup.
Flophouses: For two to five cents a night, men could rent a space on the floor of a large room. Newspaper or coats provided bedding. Men usually slept in rows. As many as 500
people could reside in a flophouse.
Barrel Houses: Saloons might allow steady customers to sleep for a penny or so on a bar stool, in a back hallway, or even draped over a rope strung across the bar.
So, if NWOG succeeds, we will meet at the Ritz. If not, we will be passing the anti-freeze on Skid Row.
RNL -- I think we will see the price dropping a bit because money is flowing out of NWOG and into AURC as investors try to take advantage of the buyout. We're getting closer to the
final announcement which means an investment at .13 could go to .55 rather quickly, if they close the deal. But that money (and more) will flow right back into NWOG when the buyout is completed.
Spec -- see post 32892.
This question of "What happened to the NDOL assets (33 million barrels of oil, proven and probable) and their licenses?" is a major issue that NWOG will have to address sooner or later if they want to earn the trust of their shareholders.
Amen to ALL of that, bullbusch. The cc and audited financials
will increase the credibility of the company and its directors which will, in turn, attract some of that AURC buyout money to flow into NWOG. This buying pressure will surely drive the pps higher than where it is now.
CIF -- I will call J.B. Voss again in about a week and ask how the sale of the bonds is going and about the air permits and the pollution factor from coal burning. He mentioned that they expect the permit for the Iowa plant to come through by mid-June. When that happens, and the financing comes through,
it will be a big relief for them and for us.
Good points, CIF
Here's some information I got from reliable sources.
States with highest ethanol production in 2006:
Iowa 1.1 billion gallons
Illinois 780 million gallons
Nebraska 543 million gallons
Nebraska is planning to increase production to 1.05 billion
gallons and become the number two producer in the U.S.
The ethanol industry will use 4 billion bushels of corn per year by January 1, 2008. That's one third of the total U.S. crop.
One bushel of corn yields 2.3 to 2.7 gallons of ethanol.
A plant producing 100 million gallons of ethanol annually will use 42 million bushels of corn and produce 330,000 tons
of Dried Distiller's Grains (DDG's).
The selling price of DDG's is approaching $175 per ton.
Taking into account fluctuating prices of corn, storage, transport and so on, each AENS plant will have revenues of
approximately $50-60 million per year from the sale of Dried Distiller's Grains.
Gannent -- Welcome aboard!
AENS has a 52 week high of 2.98 from 6/27/06. I don't like to make short term price predictions, but we could see this high
challenged when it is announced that financing has been closed, the identity of the construction company is released, and groundbreaking dates are set for the Iowa and Illinois plants.
Naysayers? The Dynamic Duo will eat them for breakfast with a little powdered sugar.
The sale of dried distiller's grains sounds like a big business in itself. Each ethanol plant that produces 100 cars of ethanol per week will also be producing 70 cars
of DDG's per week. I'd like to know the price of DDG per ton
to get an idea of the amount of supplemental income this will bring in.
J.R. Voss said the DDG business will be his area of
responsibility once the plants are operational. He said the company has spent months setting up its DDG connections, especially in Texas and Oklahoma where there is a tremendous concentration of livestock. J.R.'s opinion is that DDG is not a "by-product" in the manufacture of ethanol. He said it was a "co-product", because DDG has its own market.
Just spoke to J.B. Voss, V.P. of Business Development at
Alternative Energy Sources (AENS). He gave me some solid information about the company's progress.
He said they expect to close on financing in July
for the first two plants using a combination of debt and equity. He said they are being very cautious about diluting
their own interest (and ours) as shareholders but that banks will not agree to finance the projects entirely through loans.
He did confirm that other companies have had problems getting financing from banks but that AE has not encountered any obstacles in that regard. They seem to easily win the confidence of bankers. I mentioned that there are quite a few new ethanol projects that plan to open within the next 24 months, but he said many of them don't get past the planning stage. Others don't get financing, and others just don't persevere. AE, on the other hand, is totally dedicated to becoming the low-cost producer in the ethanol market.
Mr. Voss said that due to the time-consuming process of getting permits and dealing with government agencies, the plant openings are expected to take place in early 2009.
He said permitting should be completed in June for the Iowa plant and in July or August for the Illinois plant.
Ground-breaking could be as early as July in Iowa, or as soon as the financing is in place. He confirmed that a construction company has already been chosen but he could not identify them by name before it is released to the public.
I was glad to hear that they expect the demand for ethanol
and dried distiller's grains (DDG's) to be increasing at such a rate that whatever the company can produce will be sold
without difficulty.
He mentioned that cellulosic ethanol capabilities are not a priority, but that it will be taken up in the future.
Mr. Voss told me that he will personally be in charge of
marketing the DDG.
Finally, I asked him about the Dynamic Duo article and he said it just came to their attention today when they received the publication (Ethanol World, I think), and someone played the Batman theme song in the office as a joke. That was the first time anyone had ever referred to Mark Beemer and Lee Blank in that way. It was definitely not something widespread in the renewable fuel industry, at least not until today.
The audited financials should be more polished than what was posted on the website last month. Here's hoping.
I just put in a call to AENS and all of their top people are in a meeting, but I was told I would get a call back within 30 minutes. Anyone have a quick question you want answered
by their management team?
Audited Financials are a prerequisite for an uplisting and also for a merger or buyout. Both of these intentions have been suggested by the company, and the conference call should shed some light on some of these major developments.
Thanks for your reply, EIK.
IMO, the conference call should have been scheduled for some time AFTER the release of the audited financial statements. That would have allowed shareholders to clarify information contained therein, since it would be considered information already released to the public. With the conference call taking place BEFORE the AF release, our questions about the company's financial position will be circumvented with the usual, "That is addressed in the audited financials. You'll have to wait a little longer for that information," which can be very frustrating, indeed. And then when the AF's come out, there is no one around to answer our questions.
EIK, maybe you can ask for a follow-up conference call to be scheduled for a week or so after the release of the AF's. TIA
I don't think our boys from ADM would have gotten so
deeply involved in this business without having received assurances from refineries that they would purchase their product. Refineries would make that kind of commitment if
AENS guaranteed they would beat the price offered by the
competition. I'm sure no deals will be announced though until the company approaches the production stage. That's when you might see the pps soar into the twenties.
We can expect news soon about permitting and groundbreaking,
and this should attract a lot of attention from investors.
I also hope we will be told more about the international contractors who will be doing the construction work to build these plants (not the Sulja Bros., I hope)(JK).
Each plant will be able to produce 100 million gallons annually, but who is going to buy the product? When there is
a guarantee in hand from someone who will buy all they can produce, this thing will run like Affirmed going for the Triple Crown.
When I see the Director of Operations loading the boat, I feel
like loading my own boat. I just hope the price stays in this
$1.00 - $1.25 range a little longer.
From the 10-QSB as of March 31, 2007
75 million shares authorized
40,500,009 shares issued and outstanding
Abbam -- Here are a couple of things I see in AENS that I don't find in the other companies you referred to:
Mark Beemer and Lee Blank who head up this company are know as the Dynamic Duo in the renewable fuel industry due to their extensive experience and success in this field. They came over from ADM, the number one ethanol producer in the country, and they have all the connections and know-how to make this a success.
USSE and ACMG are working on new fuels and technologies that are not mainstream whereas AENS is riding the wave of the present and growing demand for ethanol using already proven techniques with cost effective improvements.
AENS is not a pinksheet stock. This team wouldn't be caught dead on the pinks. They are wisely avoiding the Sarbones-Oxley requirements by remaining on the OTCBB during the start-up phase. Take a look at the 10-QSB to get an idea of their professionalism. You'll be impressed.
According to 2create, the company has also made provisions in their planning to be able to produce cellulosic ethanol in addition to grain based ethanol. They are obviously in this to win.
USSE and ACMG are referred to as "pie-in-the-sky" ventures
by dissatisfied shareholders on I-hub. There must be at least a grain of truth in that opinion. I don't think you will ever hear such comments about AENS, not with former Secretary of the Dept. of Agriculture Espy sitting on the Board.
I would rebuild the announcement like this:
"...to handle matters relating to the procedures that must be taken by the Board of Directors following the acceptance of the offer to purchase the outstanding shares of the Company."
This tells me that the offer is also accepted by the majority shareholders.
If you click on the images of the Dynamic Duo, you will come to the Board of Directors picture found in our I-box. It would be nice to list those names under the pic in our I-box so
readers can match the names with the faces.
Burgundy, we gotta get the rest of that story! I was on the edge of my seat waiting to find out what the two big advantages are that place Alternative Energy head and shoulders above the competition.
Thanks, 2create -- I was reading about how cellulosic ethanol
will become an important renewable fuel alternative in the future. This short article mentions that some new projects
are being designed to handle both types of ethanol production.
I wonder what AENS thinks about this approach.
I was impressed by the President's call for 35 billion gallons
of renewable fuel annually by 2017. That's another ten years
of increased production. I wonder what percentage of that figure AENS will be supplying to the US market in 2017.
http://www.ethanolproducer.com/article.jsp?article_id=2962
Nice article, diggg, and here is a list of all ethanol plants
in the U.S. that are either 1) operational or 2) under construction. You can also see them on the map by going to this web page:
http://www.ethanol.org/index.php?id=37&parentid=8#USEthanolFacilities
The highest concentration is in Iowa, followed by Illinois.
In posting that article, I was mainly interested in pointing out the extent of growing competition within the ethanol market and how there will be a race to meet demand. Judging from its latest success in Iowa, AENS is very well positioned to exploit that market and stand up to any competition which makes this a great investment, especially at the current PPS.
Beemer sees this as a "cottage industry" but within a few years, when supply and demand approach equilibrium, I would expect to see some price wars between competing cottages.
Of course, oil prices will fluctuate, but because oil production will be unable to increase fast enough to meet the demand, the trend will always be toward higher oil prices, good for the suppliers of ethanol. I'm not even considering the economics of peak oil.
The State of Iowa is really getting behind AENS. Iowa wants to be known as "the renewal energy capital of the world".
A tremendous collaborative effort:
$10 million in tax credits and an issuance of $23 million in tax exempt bonds.
Boone County's $7.5 million tax abatement
And to build Union Pacific railroad infrastructure to the Ogden plant, the Iowa Dept. of Transportation came forward with:
Grant of $144,500
Loan of $95,400
The executives of AENS must be very well connected.
All great news!
Other companies are having difficulty procuring financing
of their ethanol plant construction. The article below mentions Ethanex Energy (EHNX) which has plans similar to AENS in terms of construction and production timetables and, like AENS, has ties to FS Stone.
http://www.bizjournals.com/kansascity/othercities/atlanta/stories/2007/04/02/story11.html
By 2create
"I firmly agree that this will rise to double dollar digits/Share within the following 12 months out..."
I could live with that, and I think it will happen. I believe the PPS could reach that level even before the plants are fully operational, as we saw with PEIX.
I was thinking something different, that AENS will be in competition with ADM to sell its product and may draw customers, suppliers, lawyers, managers, agents and advisors they knew from their days with ADM away from their former employer. These guys look like they can play a game of hardball with the world's #1 ethanol producer.
I don't know if ADM will be buying a piece of AENS, but you can be sure they will be closely monitoring its development.
If AENS is ADM's brainchild, I'll be a monkey's uncle.
I'm also concerned about how long it will take the company to
reach the 100 car per week production level after an ethanol plant opens.
Thanks to I-hub and guys like 2create, we live in exciting times. Good luck to all in AENS.
Great analysis, RJ. As you pointed out, this very interesting chart for PEIX shows a spike from $10 to $44 running through May, 2006. The plant opening was in October, 2006, and since then, the stock has been trading mostly in the range of $15-18. The great run ended five months before PEIX opened its ethanol plant.
In the case of AENS, some important milestones could be reached very soon, including the permitting of the first three
plants, groundbreaking, the choice of location of plants four and five, a marketing deal, and a financing agreement to provide the funds to build everything. As the company achieves its goals, the price won't remain in the $1-2 range for long.
They may decide to raise capital primarily by debt-financing
to avoid dilution, but if there is a stock issuance, the number of shares will not be that great if the current market price or a higher PPS is maintained. A problem arises
if the PPS drops significantly because then a greater number of shares would have to be issued to raise the needed capital.
The company has different advisors for debt and equity financing. I'm sure they will settle on the combination that is most advantageous for its shareholders.
One thing is for sure: this is a steal at current levels.
I am a conservative long term investor and my lowest expectation here is to see a price of $15 within eighteen months. Anything above that I would consider an extraordinary blessing.
It will be nice to average up for a change (buying into strength), instead of always averaging down as with AURC and NWOG, never knowing where the bottom is.
I suspect the projected PPS of $36 a year from now is based on
the first three plants being operational by that time. The $36 figure probably only takes into account the current 40 million shares outstanding and may not include the share issuance suggested in the 10-QSB. Because the 10-QSB is an official filing, it makes sense that it would present a more conservative timeline than the company's PRs and website, but
I'm hoping we are operational no later than the fall of 2008.
The professionalism of the team that has been assembled
is mighty impressive. It is very reassuring for stockholders
to see the steps the company has taken, one after the next, to build a foundation for future growth.
I'm proud to own shares in a company that will one day be second only to ADM in ethanol production. Go AE!
AEN's 10-QSB appears to be typical of a developmental
company in the start-up phase. According to the report, shareholders can expect an issuance of stock within the next twelve months to raise funds needed to build the three plants that are expected to be operational by late 2008, early 2009.
These shares may have superior rights to ordinary common shares and they will be dilutive. The company will also take advantage of debt-financing to raise capital.
This is going to be a long haul with a great payday at some time in the future. Insiders continue to invest in the company, which is always a good sign.
OT: Right. Mark is the owner and I do the administrative
work (legal, accounting, payroll, insurance, etc.) for the Doughnut Plant. I also do taste testing, my favorite part
of the job.
Better get back to the subject of NWOG before Strongus puts
us both in the doghouse.
The profits from the Aurus buyout will flow back into NWOG,
now that its prospects are improving, and sustain the rising share price, IMO. That's why I added to my position in NWOG
today.
OT:
Doughnut Plant
379 Grand Street
between Essex and Norfolk
A stone's throw from Babycakes. I went to their opening.
fenian32 -- I think you are right on the money. But will it hold up?
NYCguy - NWOG and the Big Apple are both starting to heat up (should hit 82 degrees today in NYC). Within two weeks we should have a good idea where this is headed (I mean how high and how soon), between the conference call on the 24th and the financials which are due out at the end of May.
If we make bank here, I'll bring you some doughnuts from our Lower East Side bakery to celebrate.