First Reserve Corporation News
First Reserve Corporation Makes $300 Million Equity Investment in Osage Bio Energy
Osage Bio Energy is a sister company of Osage, Inc., which was founded in 1986 and is the largest independent distributor of ethanol in the Southeast, with current throughput of approximately 100 million gallons per year. Osage Bio Energy's new ethanol production facilities will be uniquely placed to provide ethanol for the eastern seaboard through Osage, Inc., which currently distributes ethanol from Midwest producers.
The facilities will have a differential cost advantage over traditional Midwestern corn-based facilities by using regionally grown barley. Barley is a winter crop that will be grown for the production of ethanol and does not compete for land for food production. It is environmentally superior to corn, reduces the transportation requirements of moving Midwestern corn and enhances the yield of regionally grown summer crops. In addition the by-product of barley, a protein meal, is a superior supplement for local livestock. Furthermore, OBE's site selection model provides significant energy balance advantages through a combination of partnering with existing steam producers, utilizing the company's own waste products for energy and procuring local biomass.
"Osage Bio Energy offers First Reserve the opportunity to build on its existing knowledge and background in the alternative energy sector," said
"We are extremely excited about our partnership with First Reserve. Their commitment confirms the validity of Osage Bio Energy's unique business model and provides us the financial resources, as well as industry expertise, to make our plans a reality," said
Strategic Advantages: — Strategic Geographic Location: The proposed facilities will have a geographical advantage to produce ethanol for both the Southeast and Mid-Atlantic, which are currently only served by Midwest producers. — Momentum in Ethanol Policy: Ethanol plays a critical role in current US energy policy as it addresses various agricultural, environmental and energy goals concurrently. Recent changes to the renewable fuel standards require the production of 9 billion gallons of biofuels in 2008 and 36 billion gallons by 2022, but only 15 billion gallons from corn. — Competitively Priced Feedstock: High corn prices have reduced the margins for most ethanol plants. A facility that does not rely on corn, but rather a winter crop planted while land is under-utilized is attractive particularly in light of the alternative feedstock inputs for ethanol. — Exclusive Use of KATZEN Technology in Southeast: Osage Bio Energy has negotiated an exclusive agreement with KATZEN International, Inc., one of the leading process design and technology company in the biofuels industry. The arrangement allows for exclusive use of KATZEN technology capable of producing ethanol from barley within a 200-mile radius of each plant site.
About First Reserve
First Reserve is the world's leading private equity firm in the energy industry. Throughout its 25-year history of investing solely in the global energy industry, First Reserve has developed a strong franchise, utilizing its broad base of specialized industry knowledge as an advantage. First Reserve believes that strategic diversification across a wide range of energy industry sectors has been a major contributor to the long-term, superior investment record achieved by the First Reserve Funds across economic cycles. Further information is available at www.firstreserve.com.
First Reserve has an active investment program in the renewable energy sector and has invested in a number of companies covering biofuels; waste to energy; CO2 offset origination; and solar and wind generation. With over
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