OilVoice - Maple Energy Provides Ethanol Project Update

Maple Energy Provides Ethanol Project Update

Tuesday, September 23, 2008

Maple Energy plc, an AIM listed integrated energy company with assets in Peru, announces an update on the Company’s planned ethanol project (the “Ethanol Project”), which is located in the Piura Region on the northwest coast of Peru.

Acquisition of Sugar Cane Handling and Extraction Equipment

In September 2008, Maple entered into a contract with Uni-systems, Inc. (“Uni-systems”), an international supplier of advanced process technology and equipment to the sugar, alcohol, and power industries, to supply the sugar cane reception, handling, and preparation equipment; the sugar juice extraction equipment; and the juice treatment equipment for Maple’s ethanol plant (the “Ethanol Plant”). Pursuant to the terms of the contract, Maple will pay approximately US$13 million for the fabrication and supply of this equipment enabling the Ethanol Plant to process up to 5,000 tons of sugar cane per day. The first shipment of major equipment under the contract with Uni-systems is expected to arrive in Peru during the third quarter of 2009.

Acquisition of Steam Generation Equipment

In September 2008, Maple also entered into a contract with Uni-systems and Allsoft Engenharia e Informatica Industrial (also known as Mitre), a Brazilian engineering and fabrication company specialising in boiler and steam generation equipment, to supply the boiler and steam generation equipment for the Ethanol Plant. Pursuant to the terms of the contract, Maple will pay approximately US$12 million for the fabrication and supply of the boiler and steam generation equipment. This equipment will be used to supply steam to the steam turbine that will form part of the electric power generation facilities of the Ethanol Plant as well as supply process steam to the Ethanol Plant. The first shipment of major equipment under the contract is expected to arrive in Peru in the third quarter of 2009.

Increase in Ethanol Project Budget

Following the execution of certain material equipment supply agreements and the substantial completion of bidding processes for various works related to the engineering, procurement, and construction of the Ethanol Plant, the main water conveyance system, and the drip irrigation system, Maple has increased its estimation of the capital expenditures required to complete the Ethanol Project. Anticipated total capital expenditures required to complete the Ethanol Project are now projected to be approximately US$222 million (excluding value-added taxes), reflecting a substantial increase in project costs resulting from: (i) significant increases in material and labour costs of third party providers; (ii) material increases in general construction costs and expenses in Peru; (iii) additional projected general and administrative expenses in connection with the Ethanol Project; (iv) alterations to the design of the main water conveyance system to provide a more reliable system with lower projected operating costs; and (v) increases in the costs of certain agricultural inputs, such as fertilizers and fuel. Maple intends to finance the Ethanol Project primarily through a combination of project debt and project equity financing.

Main Water Conveyance System Works Commenced

In August 2008, Maple obtained an important permit from the Peruvian government allowing Maple to begin construction of the main water conveyance system for the sugar cane plantation. This conveyance system will extract water from the Chira River at two main pumping stations and pump the water through a pipeline system to provide water to the main sugar cane estate. Following receipt of this critical permit, the Company has commenced works relating to the construction of the two pumping stations.