Governors' Biofuels Coalition

Aemetis Inc. recently released third quarter financial results, reporting that revenues for its ethanol business grew 6.2 percent when compared to the same quarter of last year. Aemetis CEO Eric McAfee also noted ethanol production increased 4 percent when compared to the third quarter of last year. Ethanol pricing increased by 3.4 percent year-over-year, he said. Operating margins, however, were weak due to excess ethanol supply in the U.S.

During an earnings call, McAfee provided an overview of advanced biofuel projects under development by Aemetis, including the LanzaTech cellulosic upgrade to the company’s Keyes, California, plant and the agreement to acquire Edeniq to convert corn fiber to cellulosic ethanol.

McAfee explained that the cellulosic ethanol project under development by Aemetis is located near the Keyes plant in the town of River Bank on the site of a former army munitions production plant that is now being converted to industrial use. He said the company has signed a 55-year lease with options for a majority of the land and a significant portion of the buildings on the 150-acre site. He also noted the company has signed a 20-year feedstock agreement with a 10-year fixed price that averages approximately $20 per tons of delivered orchard wood and other ag waste feedstock for the plant.

According to McAfee, Aemetis has signed exclusive licenses for key rights to LanzaTech microbial fermentation of gases and the InEnTec gasification technology. He said the three companies built an integrated demonstration unit in Richland, Washington, earlier this year to demonstrate integrated production of ethanol. The unit has completed almost four months of operation. “We are very pleased with the yield and other key production data generated by the integrated demonstration plant,” McAfee said. “The yield of cellulosic ethanol significantly exceeds our original expectations.

McAfee said yield and other data from the operation of the integrated production unit will be provided to the USDA as part of completing the phase two loan guarantee process under the USDA 9003 Biorefinery Assistance Program. “Aemetis is in the final stages of the government approval of a $125 million, 20-year low-interest rate, 80 percent guaranteed loan for the construction of the 12 million gallons of cellulosic ethanol plant in River Bank,” he continued.

According to McAfee, Aemetis expects to close on the guaranteed loan during the first half of next year, with production at the River Bank plant currently scheduled to begin in 2019.

He also spoke about Aemetis’ plans to acquire Edeniq. McAfee said Aemetis signed an agreement in April 2016 to acquire company, which has technology to convert corn kernel fiber into cellulosic ethanol. “We are pleased with the progress of the litigation related to enforcement of the signed definitive agreement,” he said. “We believe that documents disclosed to us in the discovery process support our demand to complete the transaction on the terms set forth in the signed acquisition agreement and substantial damages from the lead Edeniq equity investor that intervened to cause Edeniq to fail to perform under the agreement.”

In addition to the 60 MMgy ethanol plant in Keyes, California, Aemetis also owns and operates a 50 MMgy biodiesel plant and refined glycerin biorefinery in India.

For the third quarter, Aemetis reported that revenues for North America increased to $36 million, up from $33.9 million. Revenues for India fell. Overall, revenues reached $38.9 million, down from $39.4 million during the same period of last year. Operating loss was $3.1 million, compared to an operating income of $357,000 during the third quarter of 2016. Net loss was $7.5 million, compared to a net loss of $4.1 million reported for same three-month period the previous year.

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