Gevo Provides Luverne Plant Update
January 09 2017 - 9:00AM
Gevo, Inc. (NASDAQ:GEVO), today provided an update on the
operations of its production facility in Luverne, MN, (the “Luverne
Plant”) for the fourth quarter of 2016.
Key highlights for the quarter included:
- Produced approximately 190,000 gallons of isobutanol, the
highest quarterly production level in Gevo’s history, representing
an annualized rate of over 750,000 gallons per year;
- Demonstrated an isobutanol fermentation production capacity of
approximately 1.5 million gallons per year based on the results
measured across the last 6 weeks of production in the quarter;
- Produced a record number of batches in a quarter since
switching the Luverne Plant to the Side-by-Side mode of production
(“SBS”), achieving Gevo’s targeted back-to-back 5-day turnaround
batch times over much of the quarter;
- Surpassed production cost targets, demonstrating variable costs
of production of less than the targeted $3.00-3.50 per gallon1;
and
- Ethanol production continued to operate well in the SBS
configuration of the plant, with 2.8 million gallons of ethanol
produced in the quarter.
For the year, the volume of isobutanol production was
approximately 440,000 gallons, below the previously announced
estimate of approximately 500,000 gallons.
On December 21, 2016, the Luverne Plant was taken offline to
perform unplanned necessary repairs and maintenance on certain
components of the plant’s regenerative thermal oxidizer (“RTO”), a
piece of pollution control equipment. The Luverne Plant
remains offline at this time, as Gevo has decided to make further
upgrades to the RTO while it is down. Given the age of the
equipment (the RTO was installed approximately ten years ago prior
to Gevo purchasing the plant in 2010) such upgrades were expected
to be made in the near future, in any event. Gevo expects the plant
to be back online in the next two weeks.
“I was extremely pleased with the isobutanol production process
in the fourth quarter. Our operators have got the process down to a
standard routine, operating in 5-day batch-to-batch cycles. We have
continued to improve the costs of our isobutanol batches, better
than we expected. We achieved record quarterly production
results for isobutanol since switching the Luverne Plant to SBS. As
compared to the third quarter of 2016 (our previous best quarter),
we increased overall isobutanol production by approximately 25%,
batch size by approximately 15% and number of batches by 10%. These
results will be extremely helpful in guiding the design of our
planned expansion of the Luverne Plant. I congratulate our team in
Luverne for the excellent work they have done,” said Dr. Patrick
Gruber, Gevo’s Chief Executive Officer.
“We did take the plant down in late December, as a result of
some issues with our RTO, which contributed to Gevo’s annual
isobutanol production coming in below our prior guidance. This is
equipment that is used in both the isobutanol and ethanol
production processes. We are currently taking advantage of the RTO
being offline to make further equipment upgrades, to avoid having
to take the plant offline for this in the future. We have
significantly improved our capital structure and balance sheet over
the past few quarters, which has given us the ability to perform
maintenance and upgrades now designed to avoid production
disruptions in the future. While the expense associated with the
work we are doing on the RTO is relatively low, our stronger
balance sheet that we have today makes these types of investment
decisions very straightforward. It is important to note that
our isobutanol-specific equipment is operating well, and as
expected,” added Dr. Gruber.
About Gevo
Gevo is a leading renewable technology, chemical products, and
next generation biofuels company. Gevo has developed proprietary
technology that uses a combination of synthetic biology, metabolic
engineering, chemistry and chemical engineering to focus primarily
on the production of isobutanol, as well as related products from
renewable feedstocks. Gevo’s strategy is to commercialize bio-based
alternatives to petroleum-based products to allow for the
optimization of fermentation facilities’ assets, with the ultimate
goal of maximizing cash flows from the operation of those assets.
Gevo produces isobutanol, ethanol and high-value animal feed at its
fermentation plant in Luverne, Minnesota. Gevo has also developed
technology to produce hydrocarbon products from renewable alcohols.
Gevo currently operates a biorefinery in Silsbee, Texas, in
collaboration with South Hampton Resources Inc., to produce
renewable jet fuel, octane, and ingredients for plastics like
polyester. Gevo has a marquee list of partners including The
Coca-Cola Company, Toray Industries Inc. and Total SA, among
others. Gevo is committed to a sustainable bio-based economy that
meets society’s needs for plentiful food and clean air and
water.
Forward-Looking Statements
Certain statements in this press release may constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements, which include statements relating to the Luverne
Plant’s operations and production, including when production
operations will recommence, are made on the basis of the current
beliefs, expectations and assumptions of the management of Gevo and
are subject to significant risks and uncertainty. Investors are
cautioned not to place undue reliance on any such forward-looking
statements. All such forward-looking statements speak only as of
the date they are made, and Gevo undertakes no obligation to update
or revise these statements, whether as a result of new information,
future events or otherwise. Although Gevo believes that the
expectations reflected in these forward-looking statements are
reasonable, these statements involve many risks and uncertainties
that may cause actual results to differ materially from what may be
expressed or implied in these forward-looking statements. For a
further discussion of risks and uncertainties that could cause
actual results to differ from those expressed in these
forward-looking statements, as well as risks relating to the
business of Gevo in general, see the risk disclosures in the Annual
Report on Form 10-K of Gevo for the year ended December 31, 2015,
and in subsequent reports on Forms 10-Q and 8-K and other filings
made with the U.S. Securities and Exchange Commission by Gevo.
1 Assumes corn price of $3.65 per bushel, nets the value of
the isobutanol distiller's grains and includes an optimized value
for utility costs based on larger scale isobutanol production
levels.
Media Contact
David Rodewald
The David James Agency, LLC
+1 805-494-9508
gevo@davidjamesagency.com
Investor Contact
Shawn M. Severson
EnergyTech Investor, LLC
+1 415-233-7094
gevo@energytechinvestor.com
@ShawnEnergyTech
www.energytechinvestor.com
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