COES INFORMATION

Kevin KREISLER Q & A

SKUNK UPDATE

The Skunk has just followed up with a question concerning the new reference to "Fergus Falls" (Otter Tail at Fergus Falls, Mn) in paragraph 2 below.

Mr. Kreisler's confirmation:

"They are in our schedule and we have long lead components on order."

Here is the Otter Tail Web Site:

http://www.ottertailethanol.com/index.htm

***************************
The Skunk Emailed Mr. Kreisler concerning a 2Q question on the COES

.
Here is my question and his response:

Question: I noticed the table on page p.28, has 6 COES operational by EOY. The narrative has a goal of 7 COES by EOY.

1 - Lakota is a larger plant (100MMGY) and needs two systems. Each single Method I COES can handle the output of a 50MMGY ETOH plant and produce in excess of 1.5MMGY. Similarly, a 50MMGY ETOH plant will need one Method II COES to produce an additional 1.75MMGY+ ... for 3.25MMGY in total with Method I at a 50MMGY plant, or 6.5MMGY for a 100MMGY plant. These are our guaranteed, proven yields and they form the basis for our yield warranties to our clients. Pilot tests have shown that we are capable of gross yields in excess of 4MMGY from a 50MMGY plant and 8MMGY from a 100MMGY, however, this has yet to be proven in the field.
2 - Marion is the third (the inaugural Central Indiana money shot is attached ... we're going to put the live action video with a gallon/$ counter on YouTube one of these days). Oshkosh's upgrade is about to go live. Medina's upgrade is slated for the end of next month. Riga is still on track for an early October commissioning. Lakota (2 systems) and Red Trail (1 system) will follow later in Q4. Dialing up to nameplate for these four systems will proceed more quickly than the first three because each of these last four systems will be commissioned with their upgrades. We may squeak Albion (probable) and Milton (possible) in by year end. Fulton (2 systems), Adams, Fergus Falls and the BIG expansion will be commissioned throughout Q1. We will need to close on additional financing to meet these latter timelines. Note that these are all Method I COES facilities and that many of the associated clients have signed for both Method I and Method II (Oshkosh, Medina, Marion, Riga, Lakota, and Fulton have all ordered Method II expansions). While our build out plans call for the installation of these additional systems starting in 2009 as previously disclosed, we will provide additional guidance on expected timelines at a later date.

3 - Separately, I appreciated your sentiments after the 10Q was published [The Skunk sent a congratulatory Email to Mr. Kreisler after the 2Q Release] but you should know that our team and our partners are entirely to blame for the progress. From the Marion, Oshkosh and Riga commissioning crews, to the Ottoville and Van Wert design and manufacturing teams, to our production crews at Adrian and Culbertson, to our all of our valuable vendor and client partnerships, they continue to crank out amazing results - results that no other company in our industry has been able to achieve. They're literally doing it right now at some of our sites. Our shareowners should know this and that an incredibly dedicated and talented team is out in the field making this happen.
***************************
Here is a picture of CIE producing Corn Oil mentioned by Mr. Kreisler, paragraph 2 above.
(Third COE at Marion IN also called Central Indiana Ethanol)