THE FINAL BUSINESS PROPOSALWith Team Golf and Team Hotel

HISTORY OF SYNGAS PRICE

Team Golf initial guess for syngas price was $50/ton (February 2011)

Team Hotel has not begun economics

MEET 2 Team Golf MEET 2 Team Hotel

HISTORY OF SYNGAS PRICE

Team Golf moved the price of syngas to $150/ton (February 2011) for an IRR of 40.5%

Capital cost was $418 million

Team Hotel had syngas price set at $200/ton (February 2011) for an IRR of 3.58%

Capital cost was $320 million

MEET 3 Team Golf MEET 3 Team Hotel

HISTORY OF SYNGAS PRICE

Team Golf used expanded timeline for start-up with a syngas price of $300/ton

Capital cost was $418 million

Syngas price raised to $300/ton (April 2011) to give an IRR of 29.17%

Capital cost was $238 million

MEET 4- Team Golf MEET 4- Team Hotel

The joint economic venture IRR was 34.2%

MEET 4- Joint Econ

HISTORY OF SYNGAS PRICE

The price was iterated to $457.80 to give both teams an IRR of 29.8%

Capital cost was $418 million

Syngas priced raised to $457.80/ton (April 2011) to match IRRs at 29.72%

Capital cost now $320 million

MEET 5- Team Golf MEET 5- Team Hotel

The joint economic venture IRR was 24.2%

MEET 5- Joint Econ

COMPARISON OF IRR’S

HOW ARE JOINT VENTURES USUALLY FORMED?

Agreements are drawn up in contracts to stabilize prices among the two companies

IN INDUSTRY…

The discussion that took place between Team Golf and Team Hotel is unrealistic.

The price of syngas would have never been matched to meet a desired IRR.

A company would have given a price and only budged slightly from that; the amount they could afford to pay would have never been stated.

There are no stand alone gasifier plants. Team Hotel would likely use LNG that is water

reformed to provide feedstock

THE FINAL DECISION

Team Golf and Team Hotel will not be moving forward with a joint venture

The final price of syngas is: $457.80/ton This price gives both teams an IRR of 29.8% A joint venture gives an IRR of 24.1%