Gas-to-Liquids Company Sells Exploration and Production Holdings

19 December 2006

Syntroleum Corporation is selling its exploration and production holdings in Nigeria to Energy Equity Resources Limited. Syntroleum, developers of a compact Fischer-Tropsch process (Gas-to-Liquids and Coal-to-Liquids), could realize up to $25 million from this sale.

Syntroleum had intended to generate revenue via oil and gas production as well as to test out its concept for a barge-based GTL plant to convert associated gas to more easily transported product. (Earlier post.)

However, the company drilled a dry hole last fall. Furthermore, according to the company, the Nigerian gas market has developed to allow the sale of the produced gas—a floating GTL plant didn’s really fit.

Syntroleum provided the GTL used in the recent eight-engine B-52 test flight of a GTL-JP8 blend conducted by the Air Force. (Earlier post.)

In November, Syntroleum lined up a commitment for up to $40 million in common stock equity financing from Azimuth Opportunity Ltd. Net proceeds from any sale of the securities will be used for general corporate purposes, which may include funding commercialization of Syntroleum’s coal to liquids (CTL) and gas to liquids (GTL) technologies, research and development, preparations and filing of patents, increasing working capital, funding potential investments in businesses or technologies that are complementary to Syntroleum’s, and capital expenditures.