Pacific Ethanol, Inc. Q2 2008 Earnings Call Transcript

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2008-08-11 10:54:17.0

Tags: Pacific Ethanol Inc.

Question-and-Answer Session

Operator

(Operator instructions) Our first question comes from the line of Joe Gomes with Oppenheimer please proceed.

Joe Gomes – Oppenheimer

Good Morning

Neil Koehler

Good morning, Joe

Joe Gomes – Oppenheimer

Neil I was wondering it you might be able to provide anymore details on the pursued dynamic tasks, more and above. Just that it looks promising?

Neil Koehler

We like to be fairly circumspect in terms of these sorts of projects until we have more definitive results, but I can say that we have run a first phase of testing that what we ran the equipment continuously for a week’s period of time and we saw yield improvements anywhere from 0% to 12%. If you look across the individual fomenters there were some issues in terms of operations that we are addressing to make sure that we can run the equipment more continual manner and we are working that out now and expect over this quarter to have more definitive results and know exactly how we will be implementing this across, our Boardman Facility and the other ethanol plants.

Joe Gomes – Oppenheimer

Okay, great. In the Burley start up, I think Joe in his comment mentioned that you had a difficult start up there. Could you provide some more detail on that and what kind of impact on volume that might have in the quarter?

Neil Koehler

Sure, we’ve been very fortunate, our first two startups to have very flawless and really incredibly quick and efficient startups. The Magic Valley Facility, we had some equipment issues specifically (inaudible) tank at the front end failed at start up, we had to shut up the plant down and have to fix that. We were fixing it on the fly, it had some impact on yield at Magic Valley, probably cost us overall based on our earlier projections about a half a month’s production at Magic Valley, and also there were some ancillary costs involved in additional chemicals used to overcome some of the front end pumps that we had so that we could continue to run and the logistical cost in terms of hauling ethanol from other areas to cover contractual, so commitments of lost gallons which obviously impacted some profitability in growth margin as well as added cost dealing with the starter-up, I guess it is running efficiently now.

Joe Gomes – Oppenheimer

Okay and one last one. Can you kind of give us an idea of your conversing clause, I know some of the other ethanol guys do that interims of, this was all the other factors of production outside of this the corn?

 

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