hammered

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Grapevine, TX-based GreenHunter received port permission to takeover an option for the land from Port Sutton Envirofuels, a localcompany that recently shelved plans to build an ethanol plantthere. GreenHunter acquired the lease option for approximately $1million in cash and restricted common stock valued at $14.25 pershare.

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GreenHunter initially wants to build a biofuels terminal andlater a biodiesel production refinery on the property. The$70-million project would create 250 temporary construction jobsand 50 to 60 full-time jobs once the biofuels plant is up andrunning. Port officials estimate the plant would take 12 to 18months to build. The lessee plans to use vegetable oil as stock forbiofuels during initial operations but later may switch to animalfat.

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Should the company decide in the next nine months to exerciseits option to lease the site, the ground lease would carry aminimum term of 40 years. Additional consideration of approximately$2 million in restricted common stock would be due no later than 18months from closing. The sum would be calculated based on anaverage trading price between $14.25 and $25 per share.

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"Strategically, this asset represents another important step inthe execution of our business plan to vertically integrate ourbiodiesel production and marketing businesses," says Gary C. Evans,GreenHunter chairman, president and CEO. "Due to the prime locationon the Gulf Coast of Florida, we foresee this asset as establishinga foothold in a deep-water port that handles over half of thetransportation fuel used in the state of Florida."

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According to GreenHunter, the site is strategically located at adeep-water berth in Port Sutton, with access to rail, truck, bargeand deep-water ship transport. Evans says the company will be ableto use the property not only for production and distribution of itsown biofuels, but also for handling imported biofuels from othercompanies. He reports Florida consumed more than 1.6 billiongallons of diesel fuel last year.

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GreenHunter Energy owns and operates the nation's largestbiodiesel refinery. The Houston plant has a production capacity of105 million gallons per year. The refinery was shut down last monthdue to a direct hit from Hurricane Ike, but the company expects torestart production in the next several weeks.

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