USA Synthetic Fuel Reduces Debt, Attracts Additional Financial Resources for Its Development of Environmentally Responsible, Ultra Clean Btu Converters to Serve Nation's Energy Needs

January 05, 2012 at 07:55 pm IST

MarketScreener.com By

Debt reduced by 76% with new equity issuance Additional financing pursued with new partners New Headquarters established in Washington, D.C.

USA Synthetic Fuel Corporation (OTCQB: USFC), a developer of environmentally friendly hydrocarbon conversion technologies, provided the following update on its financial progress in 2011, as reported in its recent SEC filings.

Over the next four years, USA Synthetic Fuel hopes to make significant expenditures to complete its Lima Energy Project, currently under development and construction, and to bring the Company's projects into full commercial operation. Total estimated project construction costs of $497.0 million Gas 1, $1.02 billion for Gas 2, $627.3 million for the CCGT, and $2.3 billion for the Cleantech Energy Project, are expected to be required to bring each project into commercial operation, with a total production designed for about 100,000 BOE (barrels of oil equivalent) per day of ultra clean low cost synthetic fuel.

In October, 2011, the Company signed an engagement letter with an unrelated third party to act as an advisor and provide investment banking services including arranging a bond financing of $350 million based on the Company's BOE Energy asset, which will be used to advance USASF projects and provide general growth capital for the Company. The Company believes this BOE Energy asset is approximately 1.02 Billion BOE (barrels of oil equivalent) of solid hydrocarbons, consisting of 700 million gross tons or a conservative 402 million net tons of Powder River Basin coal located in Wyoming.

"We plan to focus on accessing equity capital together with the BOE Energy asset bond capital to continue construction on Lima Energy and then shift to Ohio Air Quality Bonds for long term financing," stated Harry H. Graves, Chairman, USA Synthetic Fuel. USASF/Lima Energy has a resolution from the Ohio Air Quality Development Authority for $470 million in bonds for Lima Energy construction. USA Synthetic Fuel has substantially completed the draft documentation for the Ohio Air Quality Bonds, including the Offering Memorandum, Trust Agreement, Mortgage Security Agreement, and Deposit Account Pledge and Control Agreement, but has shifted the timing for the placement of the bonds because of its plan to utilize equity capital and BOE Energy bond capital first, which the Company believes would make the placement of the Air Quality Bonds a more efficient process. The Company's ability to obtain adequate funding for development and construction plans as well as for working capital purposes will depend on a variety of factors and cannot be guaranteed.

At its annual stockholder meeting in Washington, D.C. held on October 28, 2011, Chairman H. H. Graves reported that the Company has reduced debt by $7,030,489 (76%) with the issuance of 1,004,356 shares of common stock at $7 per share.

The Company also reports that it is relocating its headquarters to Washington, D.C., returning the U.S. synthetic fuel initiative back to its roots in the nation's capital. In 1980, the government's synthetic fuel effort was to deliver 2 million barrels per day of synthetic fuel in the U.S. within 5 years. USASF's new headquarters in Washington, D.C. reflects the importance of serving U.S. military customers and interacting with all branches of government in its drive to deliver supplies of low cost clean energy products across America.

About USA Synthetic Fuel Corporation

USA Synthetic Fuel Corporation (OTCQB:USFC) is an environmental energy technology company focused on building ultra clean btu converters designed to enable America's solid hydrocarbon resources to be transformed into low cost synthetic fuel products: pipeline quality synthetic natural gas (SNG), transportation fuel (diesel, jet, gasoline), hydrogen, and power. USA Synthetic Fuel's goal is to deliver top environmental, economic, and social performance. The Company's leading btu converters are in development and/or construction and are designed to produce 100,000 BOE (barrels of oil equivalent) per day of low cost synthetic fuel. The Company has established the long term business objective of manufacturing and delivering 2 million BOE/day of low cost synthetic fuel in the USA by 2030. The Company owns 1.02 Billion BOE in solid hydrocarbon energy.

Forward-Looking Statements

Statements that are not descriptions of historical facts are forward-looking statements. Reference is made in particular to the descriptions of our plans and objectives and other forward-looking terminology such as "may", "expects", "believes", "anticipates", "intends", or similar terms, or variations. Forward-looking statements are based on management's current beliefs, opinions, and expectations. Actual results could differ materially from those currently anticipated due to a number of factors. Additional information on potential factors that could affect our results and other risks and uncertainties are detailed in the company's periodic reports, including our Form 10.