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Food and Fuel Delivered

September 8, 2008

Osage Bio Energy (OBE) announced that it has executed a construction contract to build its Appomattox Bio Energy (ABE) facility in Hopewell, Virginia. AGRA Industries, Inc. of Merrill, Wisconsin, will serve as the General Contractor for the engineering, procurement, and construction of the facility. OBE previously announced an equity commitment by First Reserve Corporation to provide funding for construction.

The ABE facility is designed to produce 65 million gallons per year (MGPY) of ethanol and is projected to use regionally grown barley as the primary raw material. When complete, the facility will be the first large-scale fuel ethanol plant constructed in Virginia. As a motor fuel, ethanol can reduce the life-cycle green house gas emissions typical of gasoline.

Through partnership with KATZEN International, Inc. the facility will utilize technology from one of the leading process design companies in the biofuels industry. Incorporating this technology around the use of barley allows for a number of distinct advantages, including:

1. As a moderate-to-high yield winter crop in the Mid Atlantic region, barley can be grown in double-crop systems with established food crops such as soybeans.

2. Through the use of advanced bio-processing methods, the facility will produce a barley protein meal that will introduce a high quality animal feed product to the market.

3. OBE will capture the energy value of barley hulls through conversion to fuel pellets. These pellets represent an attractive high-value renewable biomass that can either be used for process heat in the ethanol process or marketed as a green energy fuel in domestic or export markets.

OBE has worked with the Eastern Regional Research Center, Agricultural Research Service branch of U.S. Department of Agriculture regarding improved bioprocessing, as well as with Virginia Tech on the development of next generation barley varieties.

The end result: an additional cash crop for farmers, a nutritionally superior animal feed, and fuel for our cars.

The Virginia Department of Environmental Quality has issued the Air Quality permit for the ABE facility. The issuance of the permit supports the scheduled start up of the facility in the second quarter of 2010, which coincides with the barley harvest.

ABE has named Donald Oldham as General Manger for its facility. Oldham brings a wealth of plant operations experience from the grain, food ingredients, and ethanol industries. He was most recently a General Manager for the ASAlliances Biofuels 100 MGPY facility in Linden, Indiana.

Groundbreaking for the ABE facility is scheduled for Friday, October 3, 2008, in Hopewell.

About OBE

Osage Bio Energy is headquartered in Glen Allen, VA, and was founded in January 2007 to develop barley-based ethanol production on the U.S. East Coast. Osage, Inc., a sister company, is the largest independent distributor of motor-fuel grade ethanol in the Southeast, with current throughput approaching 200 million gallons per year. Osage, Inc. will provide the marketing for the ethanol from the ABE facility. OBE’s equity partner, First Reserve Corporation, is the world’s leading private equity firm in the energy industry and is targeting the renewable energy sector, including biofuels; waste to energy; CO2 offset origination; and solar and wind generation. Further information is available at: http://osagebioenergy.com and http://www.firstreserve.com.

About AGRA Industries

AGRA has a proven history in the design and construction of ethanol facilities. The AGRA companies represent a team of experienced specialists dedicated to providing the seed, feed, grain, milling, fertilizer, and ethanol industries with a single source for their facility and in-plant equipment needs. AGRA is committed to meeting customer needs with the goal of ensuring efficiency and profitability. Further information is available at: http://www.agraind.com.




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