D1 Oils to Raise £50m with New Offering; 10-fold Expansion in the Works

2 January 2007

D1 Oils, the UK-based biodiesel producer, won shareholder approval at an extraordinary meeting (EGM) to place at least 29.8 million shares at 165p, raising almost £50 million (US$98.3 million). The offering, with an approved over-allotment of up to 35.2 million shares, will provide D1 with working capital for plant development and refinery expansion, and fund agronomy research and development.

D1 currently has 32,000 tonnes (97 million gallons US) of operating refining capacity in Teesside (UK), and plans to expand UK production capacity to 320,000 tonnes by the end of 2007 and 420,000 tonnes by the end of 2008.

This expansion will include the deployment of six new 10,000 tonne D1 20 units at the Teesside site. The company also anticipates using planned 50,000 tonne units, and converting existing facilities to biodiesel production.

This expansion will be made possible in large part by the proposed acquisition of a new refining and distribution site at Bromborough in Merseyside. Completion of the site purchase is anticipated by year end.

Through the third quarter of 2006, D1 planted or obtained the rights to offtake from plantings of a total of 114,313 hectares of jatropha worldwide. This represents an increase of 46,103 hectares (67.5%) on the total planting of 68,210 hectares up to 30 June, and an increase of 4,942 hectares (4.5%) on the total planting of 109,371 hectares up to 15 September, as announced on 27 September.

The total exceeds internal targets, according to the company.

Earlier in the 2006, D1 concluded its first major UK offtake contract for biodiesel for approximately 24,000 tonnes over a twelve month period to Petroplus Refining Teesside Limited, a division of Petroplus, the UK’s largest independent refiner of crude oil and distributor of petroleum products.

At present, D1 is predominantly processing soybean oil sourced from Latin America to supply Petroplus and to supply other intended contracts that are presently in negotiation. D1 anticipates that jatropha will become available in material quantities from 2008 at a significant cost advantage compared to the prevailing market values of other feedstock options. Prior to this, the company’s strategy is to produce and sell biodiesel sourced from other vegetable oils to provide cash flow for the business.