The home heating oil industry has a long and proud history, and Fuel Oil News has been there supporting it since 1935. It is an industry that has faced many challenges during that time. In its 77th year, Fuel Oil News is doing more than just holding
Issue link: https://read.dmtmag.com/i/342353
www.fueloilnews.com | FUEL OIL NEWS | JULy 2014 11 Renewable Energy Group, Inc. announced on June 9 that its wholly-owned subsidiary, REG Synthetic Fuels, LLC, has com- pleted its acquisition of the remaining 50% ownership interest in Dynamic Fuels, LLC previously owned by Tyson Foods, Inc. As a result of the closing of its purchase of substantially all of the assets of Syntroleum Corporation and the closing of this trans- action with Tyson, REG now takes full ownership of Dynamic Fuels' 75-million gallon nameplate capacity renewable diesel biorefinery in Geismar, La. Tyson and Syntroleum formed Dynamic Fuels in 2007 as a 50/50 joint venture. Completed in 2010, the facility is the first large-scale renewable diesel biorefinery built in the U.S. and will now be known as REG Geismar, LLC. "Closing these transactions enables our entry into the renewable diesel market in a significant way," said Daniel J. Oh, Renewable Energy Group, Inc. president and CEO. "We are excited about the opportunity to offer new products to our customers, while building on our core competencies in research, engineering, production and distribution of advanced biofuels. We look forward to bringing the Geismar biorefinery online and work to do so has begun." REG paid Tyson approximately $16.5 million in cash at clos- ing and retired approximately $13.5 million of Dynamic Fuels' indebtedness to Tyson. REG has also agreed to make up to $35 million in future payments to Tyson tied to product volumes at the Geismar biorefinery over a period of up to eleven and a half years. REG intends to use proceeds from its recent $143,750,000 convertible senior notes offering to either replace the letter of credit that Tyson Foods obtained to support the biorefinery's $100 million in Gulf Opportunity Zone Bonds, issued through the Louisiana Public Facilities Authority, or to redeem these bonds. Most of the employees at Dynamic Fuels, LLC are expected to join the company as part of the renamed REG Geismar, LLC. Previously, on June 3, REG announced that its wholly-owned subsidiary, REG Synthetic Fuels, LLC, had closed its acquisition of substantially all of the assets of Syntroleum Corporation. Syntroleum advised REG on June 3 that a majority of its shareholders had voted to approve the asset sale to REG. Shortly after the Syntroleum stockholders' meeting, officials from the two companies completed the transaction, which included the issu- ance of 3,493,613 shares of REG common stock to Syntroleum. Most of the employees at Syntroleum's Tulsa headquarters will join REG as part of the newly formed REG Synthetic Fuels. "We are very pleased to bring new advanced biofuel tech- nologies into the REG portfolio of products that will expand our biomass-based diesel business and launch us into new customer segments," said Oh. "We welcome the newest members of our team in Tulsa to REG Synthetic Fuels." Syntroleum pioneered renewable diesel fuel and Fischer- Tropsch gas-to-liquids technologies and built a large IP portfolio, including 186 patents issued or pending, which REG will now own. Headquartered in Ames, Iowa, REG owns and operates nine active biorefineries in five states and distributes biodiesel through a national network of distribution terminals. Renewable Energy Group, Inc. is a leading North American advanced biofuels producer with a nationwide distribution and logistics system. REG Completes Syntroleum Acquisition FuElS EIA N e w s • North Sea Brent crude oil spot prices increased from a monthly average of $108/barrel in April to $110/bbl in May. This was the 11th consecutive month in which the average Brent crude oil spot price fell within a relatively narrow range of $107/bbl to $112/bbl. The discount of West Texas Intermediate crude oil to Brent crude oil, which averaged more than $13/bbl from November through January, fell below $4/bbl in early April before increasing to an average of $7/ bbl in May. EIA projects Brent crude oil prices to average $108/bbl in 2014 and $102/bbl in 2015 and the WTI discount to Brent to average $9/bbl and $11/bbl in 2014 and 2015, respectively. • During the April-September summer driving season this year, regular gasoline retail prices are forecast to average $3.62/ gallon, 4 cents higher than last year. The projected monthly national average regu- lar gasoline retail price falls from the high this year of $3.67/gal in May to $3.54/gal in September. EIA expects regular gaso- line retail prices to average $3.50/gal in 2014 and $3.38/gal in 2015, compared with $3.51/gal in 2013. • EIA estimates that U.S. total crude oil production averaged almost 8.4 million barrels/day in May, the high- est monthly average production since March 1988. U.S. total crude oil pro- duction, which averaged 7.4 million bbl/d in 2013, is expected to average 8.4 million bbl/d in 2014 and 9.3 million bbl/d in 2015. The 2015 forecast repre- sents the highest annual average level of oil production since 1972. EIA Short-Term Energy Outlook Highlights Release Date: June 10, 2014