W2 Energy, Inc. (WTWO.PK) is pleased to announce that it has completed the purchase of Agri-Green Biodiesel, Inc. of Fernie, British Columbia.
As previously reported, W2 Energy signed a Letter of Intent to purchase a 60% interest in Agri-Green Biodiesel in May 2010. However, favorable terms in the recently completed Definitive Agreement have W2 Energy purchasing 100% of the company in exchange for the assumption Agri-Green's corporate debt. The purchase includes Agri-Green's biodiesel plant processor.
Recently, the U.S. biodiesel industry reached a key milestone by producing more than 1 billion gallons of fuel in 2011, according to year-end numbers released by the EPA in January 2012.
The total volume of nearly 1.1 billion gallons by far exceeds any previous records in production for the industry and easily exceeded the 800 million gallon target required under the EPA's Renewable Fuel Standard (RFS). The previous record for biodiesel production was about 690 million gallons set in 2008.
Biodiesel prices have been ranging from $4.25 to $5.50 a gallon over the last six months. Current prices have been consistently running at approximately $4.50 a gallon. W2 Energy's new biodiesel plant processor is capable of consistently producing 657,894 US gallons of biodiesel per year. At today's current price, the company estimates an approximate revenue base of $2,960,523 from the production and sales of biodiesel. However, future plans are to retrofit the processing plant in order to increase production to 1.2 million gallons by next year.
Mike McLaren, President and CEO of W2 Energy, stated, "Biodiesel is one of the main renewable fuels used worldwide by commercial and government fuel consumers. Because of this, biodiesel production has tripled over the last 12 months." He also stated, "We consider this acquisition of Agri-Green a strategic opportunity for us, because of our ability to produce biodiesel less expensively by using our low-temperature plasma technology. We can use W2 Energy's NT Plasmatron and MultiFuel gas-to-liquid reactor to make its own methanol, electricity and heat from waste sources, thereby reducing the costs of the methanol used in the biodiesel process. This gives us a competitive advantage in the production of biodiesel and should add significantly to our bottom line."
W2 Energy plans to immediately ship the biodiesel plant processor to its 23,000 square foot factory in Guelph, Ontario and have it operating within the next 30 days.