Four Rivers BioEnergy (FRBE) is a development stage energy company focused on developing seed processing facilities and refineries for the production, sale, and distribution of ethanol and bio-diesel products. The company develops, owns, and operates a corn-based dry mill fuel grade ethanol plant, a bio-diesel plant, and other renewable bio-energy facilities. Biofuels, particularly ethanol, have gained popularity in recent years as the US government has searched for ways to help reduce America’s dependence on imported oil. Many ethanol producers and corn farmers receive massive government subsidies to continue production of ethanol.
Companies such as Four Rivers stand to benefit from the rapid increase in demand for ethanol and biodiesel. It is estimated that American biodiesel plants are capable of producing over 2 billion gallons of biodiesel, though they only produced 500 million gallons last year. The federal government has mandated that 1 billion gallons be produced by 2012. Kentucky-based Four Rivers is currently engaged in project-to-use corn oil that could produce up to 130 million gallons of ethanol and 35 million gallons of biodiesel annually.
Four Rivers has an advantage over many other companies operating in the same industry, in that it has close proximity to several shipping centers, making transportation of the commodities necessary to produce ethanol efficient and cost effective. The company doesn’t produce any of its own corn. Four Rivers also must tap capital markets and investor’s wallets to fund its projects, as it has yet to turn a profit since inception in 2007. In July, the company announced it acquired 28 million gallons and an option for another 42.5 million gallons of production from Midwest Renewable Energy.
Shares of Four Rivers closed at $10.80 on Friday and have traded between $10 and $22 over the past 52 weeks. The company has a market value of $73.5 million. Several key insiders own over 56 million shares.
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