Renewable Energy Group Raises $72 Million in Biodiesel IPO
Jim Lane In Iowa, the Renewable Energy Group IPO priced last night, and the company’s shares began trading Thursday on NASDAQ under the REGI symbol. The company sold 7.2 million shares at $10 per share, well below its midpoint target of $14 per share announced last week, with total proceeds of up to $82.8 million if all over-allotments are covered by underwriters. Without over-allotment sales, the offering will raise $72 million. UBS Securities LLC and Piper Jaffray & Co. are acting as joint book-running managers for the offering. Stifel, Nicolaus & Company, Incorporated and Canaccord...
Will Petrosun’s Algae Biodiesel Grow on Investors?
by Tom Konrad Celluslosic Ethanol is all the rage. A less noticed, but significant "Biofuel 2.0" is biofuel based on algae. Follow the Biomass As I have consistently argued (see these recent articles on John Deere, Biogas, Cellulosic Ethanol vs Biomass Electricity, and Renewable or Green Diesel) the people most likely to make money from biofuel are not the processors and distributors (who compete directly with petroleum or other fossil fuel-based products, and so have little pricing power), but the producers of feedstock, which, like oil, is in very limited supply, and so they will have pricing power....
What I Sold: Dynamotive Energy Systems (OTC:DYMTF)
This entry continues a series on companies I sold as part of a portfolio cleanup prompted by the mess on Wall Street. In the first entry I described what I plan to do with the cash, followed by the reasons why I sold Carmanah Technologies and Pacific Ethanol. UQM Technologies was one I didn't sell. I have not mentioned Dynamotive Energy Systems (DYMTF) before. I have mixed feelings about the company. They use fast pyrolysis to make cellulosic biofuels, which I believe will prove to be one of the more economic pathways to cellulosic biofuels. However, I believe that...
Renewable Energy Group Teams Up With ExxonMobil For Cellulosic Biodiesel
Jim Lane Two giants hook up to bring cellulosic biodiesel to scale. A new source of biodiesel feedstock, and a new source of renewable fuels. In Iowa, ExxonMobil (XOM) and Renewable Energy Group (REGI) have agreed to jointly study the production of biodiesel by fermenting renewable cellulosic sugars from sources such as agricultural waste. REG has developed a patented technology that uses microbes to convert sugars to biodiesel in a one-step fermentation process similar to ethanol manufacturing. The ExxonMobil and REG Life Sciences research will focus on using sugars from non-food sources. Terms were not disclosed. Readers will...
Solazyme’s Parity-Cost, Algae-Based Biodiesel on Sale to Public
Jim Lane $27 per gallon? $15 per gallon? Fooey! Try algae-based fuels at “the same cost as regular diesel.” Month-long pilot program kicks off in the San Francisco Bay Area. In California, Propel Fuels and Solazyme (SZYM) are bringing algae-derived fuel to retail pumps for what we believe to be the first time in history. The two leading renewable fuel brands have come together to offer Solazyme’s algae-based SoladieselBD to drivers through Propel’s Bay Area network of retail renewable fuel locations. The month-long pilot program provides the industry’s first opportunity to test consumer response to this advanced...
FutureFuel’s Future
by Debra Fiakas CFA Last week the president of renewable chemicals producer FutureFuel Corporation (FF: NYSE) turned in his resignation. Lee Mikles is around sixty and seems a bit young for retirement. He had been with the company from day one and served as the chief executive officer through the end of 2012. He owns 2.3 million shares of FutureFuel stock or about 5% of the outstanding shares. Maybe Mikles is just looking for a better paycheck. The last time the company disclosed compensation, Mikles was down for $36,000 in compensation as a director. Along with...
Future Fuel’s Enticing Earnings
by Debra Fiakas CFA Who doesn’t like a bargain? FutureFuel Corporation (FF: NYSE) is trading near $13.15 per share, below nine times net earnings. Yet, the enticing earnings multiple might be only part of the story. The stock has gapped down in price twice in the last six months, trailing off after each leg down. The stock now appears oversold. Based in Missouri, FutureFuel produces biodiesel and biobased speciality chemical products. In the twelve months ending June 2014, the company reported $396.9 million in sales, providing $53.5 million in net income or $1.52 per share. ...
EPA increases US Renewable Fuel Standard Volumes, But Only Slightly
Jim Lane In Washington, the U.S. Environmental Protection Agency announced final volume requirements under the Renewable Fuel Standard program today for the years 2014, 2015 and 2016, and final volume requirements for biomass-based diesel for 2014 to 2017. This rule finalizes higher volumes of renewable fuel than the levels EPA proposed in June, boosting renewable production and providing support for robust, achievable growth of the biofuels industry. “The biofuel industry is an incredible American success story, and the RFS program has been an important driver of that successcutting carbon pollution, reducing our dependence on foreign oil, and sparking...
Biobased and Biofuel Investments: A System
Jim Lane A Biofuels and Biobased investment primer: An 18-combination, 8-character system for classifying bio investments Here’s our investment primer on how to size up the risks and the rewards and tune them to meet your goals. And, a system for organizing opportunities. So, you’re thinking about investing in bio? Here’s the good news – you’re not alone. Here’s the bad news – you’re not alone. There are retail, private equity, hedge fund, sovereign wealth, strategic, grower, VC and institutional investors snooping around too, and making active investments. For one thing, carbon’s making a comeback as the...
Neste’s Growing Circular Economies
by Jim Lane
In California, waste feedstock from the city of Oakland is now being converted to Neste (NEF.F, NESTE.HE, NTOIF, NTOIY) MY Renewable Diesel and fuels the city’s fleet.
The city, Neste, fuel distributor Western States Oil and local collectors for used cooking oil joined forces to gather waste cooking oils from restaurants and other businesses in the Oakland metropolitan area and convert it to fuel the city’s fleet. By making waste more valuable and supporting jobs that collect and treat it, this concept helps the local economy in the city while the cleaner-burning Neste MY Renewable Diesel improves the lives of its...
The Low Sulfur Diesel Crisis of 2020 And How To Prevent It
“The global economy likely faces an economic crash of horrible proportions in 2020, not for want of a nail but want of low-sulfur diesel fuel,” writes renowned energy analyst Phil Verleger in a note this month titled “$200 Crude, the Economic Crisis of 2020, and Policies to Prevent Catastrophe”. Not good timing for a White House re-election effort if, as expected, the blame falls on lack of preparedness in the 2017-2020 run-up to the projected crisis..
It’s a dire scenario but there’s hard data behind it, and though few go as far as Verleger, almost every expert is warning of a...
Solazyme’s Oilcane Boom
Jim Lane Though building capacity globally, Solazyme’s operations in Brazil are getting traction fast – and raised $235M last week. How much oil could be produced in Brazil via sugar-munching microalgae? Today, the Digest looks at Solazyme’s (SZYM) progress and the bigger picture. In California, two monster announcements came out of Solazyme headquarters last week. One related to project finance and one related to raising cash. In midweek, Solazyme Bunge (BG) Renewable Oils received approval for project financing in the form of a $120M (R$245.6M) loan from the Brazilian Development Bank (BNDES). ...
Another Biodiesel Plant Gets The Axe. Here’s Why.
by Jim Lane
In another small but sharp blow to the Trump Administration’s strategy for American manufacturing revival, news arrives from Texas of a second smaller biodiesel shuttering owing to “ challenging business conditions and continued federal policy uncertainty,” as Renewable Energy Group (REGI) phrased it in announcing the closure of its15 million gallons per year New Boston, Texas biorefinery. The company is currently working with plant employees on relocation opportunities within the production network.
The tax credit issue
The forces impacting the US biodiesel industry at present are complex, but REG in this case is pointing the blame at the biodiesel tax...
Ten Solid Clean Energy Companies to Buy on the Cheap: #7 Deere & Co....
The first and last word in any discussion of biofuels should always be "Feedstock." Feedstock is the "Bio" out of which biofuels will eventually be made, whether it be corn, sugar, jatropha, algae, palm oil, switchgrass, forestry waste, or municipal solid waste. Before the era of peak oil, we lived in a world of plenty, which meant that we could squander energy, not only by driving Hummers, but by feeding energy intensive products such as corn crops to livestock, and by dumping "free" sources of energy such as garden waste and used cooking oil into landfills. The era of...
Renewable Energy Group’s New CEO: C.J. Warner
by Jim Lane
In Iowa, white smoke has emerged from the Renewable Energy Group (REGI) conclave: Tesoro EVP and former Sapphire Energy CEO C.J. Warner has been named chief exec of Renewable Energy Group, at a pivotal moment for biodiesel in Washington and around the world and amidst a boom for renewable diesel like the world has never seen.
REG has been making good progress with Wall Street under interim CEO Randy Howard and its share price has been on the rise, and the plants have been humming along nicely churning out hundreds of millions of gallons of biodiesel and the liquid gold...
Insider View on REGI
by Debra Fiakas CFA Insider buying is not one of my regular screening criteria in selecting long plays in the small cap sector. However, to learn a chief executive officer has taken out his/her check book to buy shares in their company is influential. In November 2016, the CEO of biofuel producer Renewable Energy Group (REGI: Nasdaq) reported an increase in his stake in the company in recent months. With REGI shares just above the prices paid by the CEO just three months ago, it is timely to look more closely from the outside. In...
