Range Fuels Raises over $100 Million in Series B Financing
World’s First Commercial Scale Cellulosic Ethanol Plant Underway
Broomfield, Colo. – April 1, 2008 – Range Fuels Inc., today announced that it has completed an oversubscribed Series B round of private financing greater than $100 million. Range Fuels will focus the new funds on completing the construction of the first phase of its commercial cellulosic ethanol plant located near the town of Soperton, Georgia. The first phase of construction for the Soperton Plant is targeted to produce approximately 20 million gallons of ethanol and mixed alcohols per year and is scheduled for completion in 2009.
The Series B round was led by Passport Capital of San Francisco, California. Other investors include BlueMountain, Khosla Ventures, Leaf Clean Energy Company (advised by EEA Fund Management Ltd and Shaw Capital), and PCG Clean Energy & Technology Fund (with participation by California Employee Retirement System (CalPERS)). Advanced Equity Incorporated and Morgan Stanley were the Placement Agents for this round of financing.
"Range Fuels has an enormous market opportunity and is the company closest to commercializing cellulosic ethanol," said Walther Lovato, Portfolio Manager, Passport Capital. "Their technology and feedstock flexibility keeps costs low as they can deploy their plants near feedstock sources and quickly scale their business. Range Fuels projects a cost advantage over both corn ethanol and biochemical processes and offers a significant investment advantage over other technologies."
Range Fuels’ previously announced that it received a $76 million grant from the US Department of Energy and a grant of $6 million from the State of Georgia.
"The US Department of Energy is proud to support energy pioneers like Range Fuels in the production of cellulosic ethanol and strongly believes that these innovative new methods, using non-food based biomass, will play a key role in reducing the country’s dependence on oil," said US Secretary of Energy, Samuel W. Bodman. "We look forward to seeing Range Fuels’ Soperton Plant fully constructed and producing homegrown alternative fuels that will help protect the environment and enhance the nation’s energy security."
Range Fuels uses a thermo-chemical process compared to most competing cellulosic processes which use biochemical technology. These enzymatic approaches are typically burdened by $0.50 per gallon enzyme costs, if that target is achieved, and a total cost of production over $2.00 per gallon. Range Fuels’ projects their costs to be significantly lower than both the enzymatic process and the current corn ethanol production costs that are near $2.00 per gallon. The Range Fuels’ process also uses 75 percent less water than corn ethanol and is classified environmentally as a minor emitter with 60 percent less emissions compared to corn ethanol.
The Range Fuels process also yields significantly more ethanol per ton of biomass than biochemical processes, both reducing the cost of the fuel and the need for biomass and land. This significant cost advantage combined with a multiple year construction head start over competing cellulosic processes positions Range Fuels as the leader in the race to commercialize cellulosic ethanol. The company expects in the long term that gasoline would have to drop below $50 per barrel to be competitive with its ethanol.
Range Fuels began construction of its Soperton, Georgia plant in November 2007 with excavation and site layout. The Soperton Plant is permitted for up to 120 million gallons per year, with its first phase producing approximately 20 million gallons per year of mixed alcohols.
Range Fuels will use woody biomass from Georgia’s vast forests. Range Fuels chose to locate its plant in Georgia due the availability of sustainable, renewable and abundant biomass, in addition to the State’s proven stewardship of its forest resources. The feedstock in Georgia will be sustainably harvested forest trees and waste materials.
Range Fuels has secured a multi-year feedstock contract for the Soperton Plant and also for future plants. The company also secured a multi-year off-take agreement for the purchase of ethanol from its Soperton Plant and additional plants in the future.
Range Fuels Expands Team
In conjunction with the Series B financing, Range Fuels announced the appointment of David Gallaspy to SVP Project Management reporting to Rick Winsor, President and COO. Gallaspy has a broad background in combustion and gasification technology, project management, power generation, paper and pulp, and business development. Gallaspy is an industry veteran who has had leadership responsibility with Eastman Chemical, Mirant, Southern Energy and others. Most recently, Gallaspy was CEO of TX Energy LLC, a joint venture between Eastman Chemical, DE Shaw and Goldman Sachs. Gallaspy holds a B.A. from the Elliott School of International Affairs at George Washington University, a B.S. in Mechanical Engineering from Tennessee Technological University and an M.S. in Mechanical Engineering from University of Alabama, Birmingham.
Winsor also recently joined Range Fuels in January of this year. Winsor brings over 30 years experience to the company and was most recently SVP, President and COO of Horizon Wind Energy. Winsor led Horizon’s efforts by building eight capital intensive renewable energy projects simultaneously. As President and COO for Range Fuels, Winsor will lead the company’s efforts in the design and deployment of the Soperton Plant and others plants to follow.
About Range Fuels
Range Fuels Inc. is focused on green energy and the production of cellulosic ethanol. The company does not use food products like corn, but rather uses waste materials and other non food sources and turns them into valuable products. The company's innovative technology uses wood chips, paper pulp, olive pits, and more, and converts those materials to ethanol. The company's K2 system uses a two step thermo-chemical conversion process. The first step converts the biomass to synthesis gas and the second step converts the gas to ethanol. The company's business model is to design, build, own and operate its plants. The leadership team melds experience from Silicon Valley's fast-paced, high-tech world, and the technologically intense coal, coal gasification, and gas-to-liquids industries. Range Fuels' vision is to introduce the world to a fuel that's renewable, sustainable, and eco-friendly in its production.
Media contact:
Heather Milne
OutCast Communications
(215) 875-8138