Rentech Produces Synthetic Fuels That Exceed Quality Expectations at ...

Tag : petroleum coke
Rentech, Inc. (AMEX: RTK) today announced the successful completionof the first full production run at the Company's ProductDemonstration Unit (PDU) in Commerce City, Colorado.

Thousands of gallons of ultra-clean synthetic fuels and specialtychemicals were produced during the nearly 800-hour continuousproduction run at the facility. A variety of synthetic fuels wereproduced, including military jet fuel, commercial Jet A and Jet A-1and ultra-low sulfur diesel, all of which met or exceededapplicable specifications. The Company has shipped these fuels aswell as specialty chemicals for testing to potential customers,including the U.S. Air Force.

The commissioning phase of the PDU is now complete and the facilityhas demonstrated steady-state production at full design capacity.During the next few months, the Company will analyze the operatingand engineering data generated from this production run. TheCompany will be conducting a thorough analysis of the substantialamount of data gathered during this run. Modifications to thefacility's design and operational parameters to further improve theproductivity of the facility may be made based on these results inpreparation for the next production run. The Company continues itsnegotiations with potential licensees, customers and partners.

Rentech's PDU is the only operating synthetic transportation fuelsfacility in the United States. The facility is designed to produceapproximately 420 gallons per day of synthetic jet and diesel fuelsand specialty chemicals and demonstrates the successful design,construction and operation of a fully-integrated synthetic fuelsfacility utilizing the Rentech Process.

Dr. Harold Wright, Senior Vice President and Chief TechnologyOfficer of Rentech, stated, "The results of our first fullproduction run at the PDU have exceeded our expectations. Inparticular, catalyst productivity and product yields have exceededour operating targets. We will be analyzing the data we gatheredfrom this run to upgrade and improve the facility's operatingefficiency while continuing to provide products to potentialcustomer groups for testing."

Rentech is sponsoring several tests of synthetic fuels in variousengine types. The University of West Virginia conducted emissionstesting of synthetic fuels with a 4,000 horsepower Norfolk Southernlocomotive engine, a 1,000 horsepower Caterpillar engine providedby Walker Equipment and a 96 horsepower underground engine providedby the Mine Safety and Health Administration. Initial results ofthese tests have confirmed that synthetic fuels are cleaner burningthan traditional ultra-low sulfur diesel fuels, with lowerparticulate matter and no visible emissions from the use of thesesynthetic fuels in the engines. Ongoing testing of synthetic fuelsin a fleet of on-road vehicles is continuing for further datacollection on fuel efficiency and emissions.

Additionally, Rentech confirmed its previously issued EBITDAguidance for its wholly-owned nitrogen fertilizer facility, RentechEnergy Midwest Corporation (REMC). The Company continues to projectfiscal year 2008 EBITDA of $50 million or greater and is highlyconfident that fiscal year 2009 EBITDA at REMC will be well inexcess of $50 million.

D. Hunt Ramsbottom, President and CEO of Rentech, stated, "Oursuccess in producing high-quality synthetic fuels and chemicals involumes that potential customers can test is a giant leap forwardin our progress toward demonstrating the commercial application ofthe Rentech Process. During these difficult macro-economic times,we are fortunate that our fertilizer operation continues to performwell and generates cash that can support our commercializationefforts."

About Rentech, Inc.

Rentech, Inc. (www.rentechinc.com), incorporated in 1981, providesclean energy solutions. The Rentech Process is a patented andproprietary technology that converts synthesis gas from waste,biomass and fossil resources into hydrocarbons that can beprocessed and upgraded into ultra-clean synthetic fuels, specialtywaxes and chemicals. These energy resources include natural gas,biomass, municipal solid waste, petroleum coke and coal. RentechEnergy Midwest Corporation manufactures and sells fertilizerproducts including ammonia, urea ammonia nitrate, urea granule andurea solution to the corn-belt region.

Disclosure Regarding Non-GAAP Financial Measures

EBITDA is a presentation of "earnings before interest, taxes,depreciation and amortization." Management believes that Non-GAAPEBITDA is a useful measure of financial performance that can helpinvestors more meaningfully evaluate our liquidity position by theelimination of non-cash related items such as depreciation andamortization. We believe that our investor base regularly usesEBITDA as a measure of the liquidity of our business. Ourmanagement uses EBITDA from the Company's fertilizer productionfacility, Rentech Energy Midwest Corporation (REMC), as asupplement to cash flow from operations as a way to assess the cashgenerated from our principal operating asset available for workingcapital and funding our commercialization efforts. However, werecommend that investors carefully review the GAAP financialinformation included as part of our Quarterly Reports on Form 10-Q,our Annual Reports on Form 10-K, and our quarterly earningsreleases, and compare GAAP financial information with the non-GAAPfinancial results disclosed in our quarterly earnings releases andinvestor calls. The principal adjustment to derive projected EBITDAfrom segment operating income for REMC determined under GAAP isdepreciation and amortization which is presently estimated to be$11.0 million and $11.3 for fiscal years 2008 and 2009,respectively.

Safe Harbor

This press release contains forward-looking statements as definedin the Private Securities Litigation Reform Act of 1995 aboutmatters such as projected EBITDA guidance at REMC. These statementsare based on management's current expectations and actual resultsmay differ materially as a result of various risks anduncertainties. Factors that could cause actual results to differfrom those reflected in the forward-looking statements are setforth in the Company's press releases and periodic public filingswith the Securities and Exchange Commission, which are availablevia Rentech's web site at www.rentechinc.com. The forward-lookingstatements in this press release are made as of the date of thisrelease, and Rentech does not undertake to revise or update theseforward-looking statements, except to the extent that it isrequired to do so under applicable law.