Syntroleum Announces Third Quarter 2001 Results

Wednesday, October 24th 2001, 12:00 am
By: News On 6

TULSA, Okla., Oct. 23 /PRNewswire/ -- Syntroleum Corporation (Nasdaq: SYNM) today announced financial results for the third quarter ended September 30, 2001. The company reported a loss for the third quarter of $7.13 million or $.21 per share on revenue of $3 million. This compares to a loss of $7.06 million or $.22 per share on revenue of $748,000 in the third quarter of 2000. Revenues for the third quarter of this year primarily came from continued real estate sales, including proceeds from the company's liquidation of its real estate partnership in Gillette, Wyoming, which resulted in revenues of $1.9 million. Expenses for the third quarter were $5.73 million for pilot plant, engineering, research and development activities and $4.46 million for general and administrative and other.

Year-to-date, the company recorded a loss of $22.3 million or $.67 per share on revenue of $5.2 million. This compares to a loss of $16.5 million or $.57 per share on revenue of $7.4 million for the same period last year. Revenues for the year-to-date period came from real estate sales and joint-development fees. Year-to-date expenses were $15.8 million for pilot plant, engineering, research and development activities and $13.3 million for general and administrative and other.

"Syntroleum achieved a number of significant milestones during the third quarter," said Mark Agee, Syntroleum's president and chief operating officer. "We completed the engineering, procurement and construction (EPC) contract for our Sweetwater plant, which was a major step in moving the project closer to its construction phase. In addition, we completed the site lease for Sweetwater and the pipeline agreement for transporting feed gas to the plant and products to the wharf. We are now focused on assembling the project-financing package, which should be the final milestone for enabling construction to begin. Merrill Lynch is working closely with us to put the debt and equity financing components together and we are in discussions with a number of both industry and financial parties. Unfortunately Enron recently informed us that it no longer plans to participate in the project and we wish them the best."

Agee continued, "On the licensing front we were pleased to announce recently that we are involved in the development of synthetic fuels projects in Nigeria and Chile. The U.S. and Nigeria-based investment group NI-OK is one of the development participants involved with the Nigerian project. ENAP, the national oil company of Chile, and Denver-based Advantage Resources, are working with us to develop the 10,000-barrel per day Chilean project. These projects are now in the initial screening study phase. While there is no certainty that either of these projects will ultimately go forward to completion, we are optimistic that one or both will progress into definitive agreements over the next year."

"We also made significant progress on the relocation of our pilot plant from BP's Cherry Point, Washington refinery to a site at the Port of Catoosa near Tulsa, Oklahoma," Agee added. "A number of the modules have already been delivered to the new site with the remaining pieces scheduled to arrive over the next several weeks. The Cherry Point pilot plant is being relocated in connection with the DOE clean fuels program to allow us to produce synthetic fuels for use in fleet vehicle tests in Washington, DC and Alaska's Denali National Park. The DOE is expected to provide $16 million of funding for the $36 million project, with a large portion of the balance expected to be contributed by our project partner and licensee, Marathon Oil Company. This project affords us an excellent opportunity to demonstrate the 'real world' environmental and economic benefits of ultra-clean fuels produced using the Syntroleum Process."

Syntroleum Corporation is the developer of a proprietary process for converting natural gas into synthetic liquid hydrocarbons. The company, in partnership with others, plans to build specialty chemical plants using its technology in a number of global locations. Additionally, Syntroleum licenses its process to oil companies for the manufacture of fuels. Current licensees include ARCO (now BP), Enron, Ivanhoe Energy, Kerr-McGee, Marathon, Repsol-YPF, Texaco and the Commonwealth of Australia.

This document includes forward-looking statements as well as historical information. Forward-looking statements include, but are not limited to, statements relating to the design, construction, financing and schedule of the Sweetwater GTL project, the Nigeria and Chilean GTL projects, and the DOE GTL project, all discussed above, as well as statements relating to the testing, certification, characteristics and use of synthetic fuels and alternative fuels. When used in this document, the words "anticipate," "believe," "estimate," "expect," "intent," "may," "project," "plan" "should," and similar expressions are intended to be among the statements that identify forward- looking statements. Although Syntroleum believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements include the potential that debt or equity financing for the Sweetwater plant will not be obtained, definitive agreements for the Nigeria and Chilean projects will not be entered into or the projects will not be completed, commercial-scale GTL plants will not achieve the same results as those demonstrated on a laboratory or pilot basis or that such plants will experience technological and mechanical problems, the potential that improvements to the Syntroleum Process currently under development may not be successful, the impact on plant economics of operating conditions (including energy prices), construction risks, risks associated with investments and operations in foreign countries, the ability to implement corporate strategies, competition, intellectual property risks, Syntroleum's ability to obtain financing and other risks described in the company's filings with the Securities and Exchange Commission.