cc - CEO Neil Koehler on corn oil extraction:
Our plan to install corn oil separation technology at the remaining two plants is expected to be completed by the end of the first quarter for Madera and in the beginning of the second quarter for Boardman. We plan to sell CO2 generated from our Boardman plant starting at the end of the first quarter as Kodiac, Karbonic is finalizing construction of the CO2 Liquification and dry ice facility.
From latest cc:
Bryon McGregor - Chief Financial Officer answers a question about corn oil extraction:
Sure, it contributes for the plants that are running about $0.05 a gallon to our operating income gross profit contribution. And we have learned how to operate the corn oil systems better, our yields have increased overtime, we’re getting in some cases some weeks and days as high as a 0.8 pounds of corn oil per bushel. And certainly our overall averages are better than they’ve been again probably closer to that 0.6, 0.7 range. So we’re that market is more stable in pricing than either the ethanol or distillery train [ph]. It’s a very high valuable feed product as well as a good feedstock for biodiesel and you know obviously it’s been an important part of our strategy and the industry strategy, as they continue to diversify the revenue streams and create a little more strength in the economic foundation of the business.
The Worlds largest Investment fund Blackrock, informs the SEC, that they now hold 6% of all shares in PEIX. According to law, it is mandatory to keep the SEC and public updated about holdings of shares, at a number equal to or higher than 5% of the total number of shares.
Pickups are king of the road.
Automakers sold more than 16.5 million new vehicles in the U.S. last year, up 5.9 percent from 2013. The most popular model, by a huge stretch, was the Ford F-Series pickup. In 2014, Americans bought 754,000 of them, making it the top-selling vehicle for the 33rd year in a row.
The F-Series trucks
alone beat Volkswagen’s total U.S. sales. And Lincoln’s. And Cadillac’s. And Mitsubishi’s. Combined.
The Ford F 6.2 L gas engine's recommended fuel is regular unleaded or E85. (Flexfuel vehicle).
Average MPG for all models = 16.
The #2 and #3 top sellers are also pickups.
Chevy’s Silverado came in distant second, followed by Fiat Chrysler’s Ram truck. The top three trucks combined for 1.7 million sales, or one in every ten new vehicles sold in 2014.
Big vehicles are booming and cars aren't keeping up.
Sales of light trucks grew five times faster than cars last year, increasing 10 percent compared to 1.8 percent for cars.
Since the end of the recession, sales of cars and trucks had been neck and neck: Americans bought about 39,000 more trucks than cars in 2013. But in 2014, light trucks dramatically pulled away, outselling cars by 685,000 vehicles. Sales of midsize cars, which include the typical family sedan, actually shrank 0.5 percent.
Large SUVs are enjoying a post-recession revival.
After slumping during the economic downturn, large SUVs—a category that includes American behemoths like the Chevy Suburban, Ford Expedition, and GMC Yukon—are again in demand. Sales were up 12.4 percent in 2014.
Luxury SUVs are getting an even bigger bounce.
Sales for top-end models including the Cadillac Escalade, the Mercedes-Benz M Class, and the Lexus GX 460, together jumped 14.2 percent.
There's a lot to mop up. By looking at the EIA figures from the latest weeks, it can be seen that the industry is producing approx. 980 thousind barrells per day. Over a year, that is 15.02 billion gallons or the actual nameplate capacity of the national industry.
And while stocks go up, rack prices of ethanol is still on the decline. California rack Price of today, Down 5 cents to 1.55 per gallon.
Related to last week, blending nationwide is up by 26 thousind barrells per day but production is up 29 thousind barrells per day.
Nationwide stocks have grown by 197 thousind barrells per day over the latest week. More than 20% of daily production are sent to stock.
Exports lagging badly?
Only one solution - quench production or lose money at present rates, I'm afraid.
Have they been released? I can only see from last week. Must have a proxy between me and EIA homepage.
I can see the Weekly Petroleum Status report from EIA though. And stocks of ethanol on the West Coast have risen approx. 8% over the week. That's something.
From Neil Kohler information in the cc, an additional non-operational plant at Canton, Illinois is also within the deal. It has a nameplate capacity of 38 Million gallon per year. Can be restarted as per demand.
Neil Kohler explicitly pointed out, that the overall condition of operational Aventine plants are at or above industry standards.
Specifically the 100 million gallon per year wetmill in Pekin, has had its gasfired boilers installed, spring 2014.
How can the owners of those warrants claim anything? As for my part, they are welcome to do the conversion any time. Just leave $61.50 per share on the table.
And when do they mature? March 2015? Worthless......
To extend the logic, cheaper oil and accordingly gas is expected to be good for the economy, so jobs will be created and more people will be on the road each day in cars, going to Work, no?
With low gas-Price, You could afford a bigger. car, running fewer miles per gallon.
Does it Work that way?
I saw a feature in Danish television, mentioning and showing snow and frost in Texas these days. Will we see polarvortices with snow and frost over the midwest, this year?
The Price of gas triggers car-sales in the US. General Motors, the biggest car-manufacturer in the US sold 14 percent more cars in 2014, than the year before.
With 274,483 cars sold, it was the strongest december in 7 years for GM.
Other car manufacturers also reports strong sales for december.
A total of 16.5 million new cars were sold in the US during2014. The highest number since 2006.
If a high percentage of these cars are 4-wheel driving trucks, it will mean higher gas-utilization and ethanol-demand for 2015.
More jobs will mean more driving as well.
Just low percentages increase in driven miles will mean a lot for ethanol-demand and balance.
As I see the Aventine deal:
Neil Koehler has announced, that ethanol-producing plants in the US are collectors items, since it's allmost impossible to build new ones that are approved by the EPA. CEO Rose of REX has stated the same.
Still PEIX here get's 315 mill gallon per year additional production capacity, going from 200 MGY to 515 MGY.
It costs a dilution of 42%, so from having 96% yield of the 200 MGY plants, equaling 192 MGY per year, the old shareholders now get 58% of (192 + 315), equaling 294 MGY per year.
The profit will come from a production of 294 MGY, instead of 192 MGY. That is a neat increase!
With positive profit margins running, PEIX could have made an excellent deal here.
We must remember that the Price of this, is accepting the debt of Aventine, equaling $135 mill. It could be payed out in 2 years time. That sounds very reasonable to me.
Thin margins due to the falling price of crude have stressed ethanol makers in the second half of 2014, which is probably what made this deal attractive to both parties. Pacific Ethanol got a good price and Aventine survived.