Movers and SHAKERS
Gevo, Inc. (GEVO)
LOI to Partner with Chevron is a Major Validation for GEVO
Gevo Inc is a renewable chemicals and biofuels company engaged in the development and commercialization of alternatives to petroleum-based products based on isobutanol produced from renewable feedstocks. Its operating segments are the Gevo segment and the Gevo Development/Agri-Energy segment. By its segments, it is involved in research and development activities related to the future production of isobutanol, including the development of its biocatalysts, the production and sale of biojet fuel, its Retrofit process and the next generation of chemicals and biofuels that will be based on its isobutanol technology. Gevo Development/Agri-Energy is the key revenue generating segment which involves the operation of the Luverne Facility and production of ethanol, isobutanol and related products.
Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.
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Letter of intent (LOI) with Chevron (CVX) is a game changer. Not only does the addition of a major integrated oil company as a partner and investor validate the renewable fuels concept, visibility improves on the funding and off take fronts. LOI is subject to finalizing terms of the co-investment agreement and the fuel supply agreement by May 31, 2022. CVX also receives 15 million warrants with a minimum strike price of $8.50/share.
Co-investment agreement improves funding. CVX expects to co-invest in renewable fuel plants with total capacity of up to 150 MGPY. With current project cost estimates of $980 million for a 46 MPGY plant and a debt/equity mix of 65/35, the co-investment could approach $1.0 billion, or 49% interest in three plants at $345 million/plant. In addition, the warrants could generate an additional $127.5 ...
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.