| To: jwk who wrote (91) | 12/18/1999 5:05:00 PM | | From: Bradpalm1 | | | |
In light of Friday's dramatic price and volume action, here's a reprint of an excellent recent post from the Raging Bull RNTK thread discussing a presentation made by RNTK in Denver last Tuesday. Texaco also had an analysts meeting in NYC on Friday where they discussed plans to increase capex spending for next year by 20% on "projects including oil-refinery upgrades and construction of power plants." These are two areas where RNTK has known ongoing collaborative efforts with Texaco. From Friday's tape, it certainly appears that some type of significant accumulation is taking place.
By: Dooper55
Reply To: None
Wednesday, 15 Dec 1999 at 9:22 AM EST
Post # of 9662
"Website Launch Meeting" notes..................
Glad I went. Forecast was accurate......no blockbusters, but some good discussions. 30-35 attendees, upbeat mood, no hecklers which is nice considering the stock performance. Cash bar and hors d'oeuvres table grew cobwebs. People were there to listen and learn.
RNTKers: Mark Koenig (IR head), Jim Samuels (CFO) and Ron Butz (VP/COO)
Half-hour of informal chatting preceded the presentation. Renewed acquaintances with some nice folks from the last Annual Meeting and met some new ones.
Mark opened the formal meeting with a brief discussion about the company. Working since 1981 on F-T. While things like hydrogen and CNG may come along in decades to come, F-T diesel is the best and only near term clean fuel answer since it can use existing infrastructure. F-T diesel can begin solving pollution problems in the near future. Colorado, at least the Denver basin, especially needs F-T diesel to make inroads on our infamous (though lessening) "brown cloud". [Two local, ranking political party representatives were there but didn't speak.] Mark noted that he'd had an opportunity to talk to Colorado's Governor, Bill Owens, on December 10th. He introduced Owens to RNTK the company and to F-T diesel and its potential for Colorado/Denver. [We have a huge I-25-thru-Denver upgrade starting next year that Owens promoted.] The governor was interested enough to request specific additional information and arranged for Mark to start meeting with Colorado transportation and clean air people starting today if I heard it right. This is good IMHO.
Mark also said GTL is on the front burner at every major oil company in the world. Virtually every one is talking about getting into GTL. When GTL does start being implemented, it will mean significant business for the incumbents. GTL will NOT be like the Internet. New companies will not be able to spring up because GTL technology is thoroughly protected by patents and it took many years and tens/hundreds of millions of dollars to develop it.
Why the new website? Mark said it's needed as they move into commercializing RNTK's F-T processes. It's intended to bring more attention to the company and provide more and better information. [RNTK has been told repeatedly that even their existing website provided the best tutorial information about the GTL industry and its technology.] RNTK gets up to 15 or so serious (industry) requests for RNTK GTL technical information per month.
A fellow named John from Webolutions (the website builder) and Mark then walked us through a CD-ROM version of the new website, highlighting features like the comprehensive Company Profile (gets my "Best New Feature" vote), e-mail PR sign-up, technology comparisons, access to Corporate Window info for investors, distributed e-mail contact buttons so people can contact specific, appropriate RNTKers in their areas of expertise, etc.
Nobody asked any questions about the new website. My impression is that it was regarded as interesting but not a blockbuster. More interest was apparent in the discussions that followed.......
Jim Samuels (CFO) spoke about where RNTK has been and where they're headed. Last year has seen a major transformation. New lab, doing paid research. Working with 7-8 "major firms" on potential GTL projects. Ticked through highlights of the events as shown in the Company Profile. Bought PML and PWL. Discussed the virtues of converting methanol plants to GTL. A retrofit operation (adding RNTK F-T and product upgrading) would take 12-18 months. [In response to a question, Ron Butz said that a fully-retrofitted methanol plant will cost (new money) about 1/2 what a "greenfield" GTL plant will cost.] I think this means about $15,000 per daily barrel of capacity for retrofitting, including installing F-T product upgrading hardware.
Rule of thumb expressed: Greenfield GTL plants ($30,000+ per daily bbl of capacity) need $16 or higher crude in order for GTL plants to break even. That assumes F-T diesel sells at a 10-cent premium.
In the last two years, the company has grown from 7 to more than 50 employees. The core F-T technical staff is now 14 and 7-8 will be added to that in the next 2-3 months.
They are looking for opportunities to be equity partners in GTL facilities, not just technology licensors. They expect to use their intellectual property (18 years and about $35 million invested) to help buy their equity shares.
Financial outlook..........
I get the feeling Jim Samuels wishes he hadn't verbally set the "cash flow neutral in 1999" goal at the Annual Meeting. Things move slower than RNTK expected. I think they now expect to be cash flow neutral in FY2000 by adding to their current TX/PML/PWL/Okon income. Jim talked about a "two stream" approach to revenues. Upon completion of the First Union PP (more later) they aim to get to cash flow neutrality and profitability INDEPENDENT of GTL/F-T. That's the first "stream". That involves completing the REN acquisition as a minimum.
The second "stream" is GTL/F-T. This will be an erratic stream since the first things will be increments of license fees and these will come in increments at times set by paperwork completion/signing. Different quarters will see different sized chunks. But they DO expect to get these initial chunks and I believe they see these initial chunks starting to show up in 2000. Jim didn't talk about it but other chunks will follow when engineering is completed and plants come online. That's all more than a year from now and then the royalties will come too.
About the Everen/First Union PP. Jim said it was "30 to 33% subscribed and it will be closed January 12, 2000". That means they are now guaranteed having significant money to work with from the PP. The total sought was not given, but this is still very good news, IMHO. Jim also said that if the proceeds from the PP get large enough, they could do more things sooner and get to profitability sooner. IMHO, that could include getting equity-involvement in a real GTL project (a methanol plant conversion, IMHO) sooner rather than later.
EECP/DOE/TX project. TX should be firming up the schedules and plans for this shortly per their commitments to the DOE. The site (a coal-fed IGCC powerplant that'll get a RNTK F-T add-on) has not been specified [publicly anyway] yet.
Alternative Fuels designation is moving slowly. Federal budget hang-ups slowing work at DOE. They expect questions from DOE at some point before action is taken on their petition. The questions haven't come yet. Tea leaves say "months".
That's about it. I believe RNTK is quite optimistic about the future. I believe that in addition to the many known intentions/possibilities, there are many that we haven't heard about yet. IMHO some of the known ones will come to fruition in the near term and others will emerge. All in all, with the First Union PP money available now or very soon and with several diverse opportunities in hand, I think RNTK will move forward nicely and their future is essentially assured.
Happy holidays to all. |
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| To: Bradpalm1 who wrote (92) | 12/18/1999 5:21:00 PM | | From: Bradpalm1 | | | |
Here's the URL for RNTK's new web site....pretty spiffy. For those interested in understanding more about Fischer-Tropsch/Gas-to-Liquids technology, download and read the excellent 'Howard Weil GTL Technology Report' written by Bud Tower on the home page:
rentechinc.com
For those who are looking for information from a currently active RNTK message board, check out this site. Hopefully, this SI message board will be active again soon!
ragingbull.com |
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| To: Texas77 who wrote (96) | 1/6/2000 10:37:00 AM | | From: Terry Jackson | | | |
Yeah, it was Tokyo Joe who put me onto RNTK - when it was as high as 3. The bastard cost me a small amount, I hope they leave him swinging in the wind.
Not only was he a crook but he was a hypocritical crook - he loved to talk about doing the humanitarian thing for the less well off people - he should have stuck to burritos. |
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