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Diversified Ethanol Has a New Ethanol Plant Planned for Construction

Posted on: Monday, 27 November 2006, 18:00 CST

The new Diversified Ethanol (OCTBB:ONYI) plant is the new A500 model that will produce up to 500,000 gallons (2,000,000 liters) per year.

This plant will cost $1,600,000 (1,200,000 Euros). In addition to the sales price, Diversified Ethanol (O.N.Y.I) offers an optional guaranteed service and maintenance contract for a percentage of the profit of operation, which would increase long term income, where plants are sold to other companies.

The A500 is tentatively scheduled to start construction on January 3, 2007, which is ahead of initial company projections.

This new A500 plant has the potential to produce a minimum of 500,000 gallons of ethanol per year.

An ethanol plant valuation, for sale, is usually 5 times annual revenues. This gives a potential market value of $2,500,000 (1,900,000 Euros) for resale once a plant is completed and fully operational.

Most publicly traded companies trade at 17.6 times their annual earnings, but Ethanol Companies, due to the potential growth of the industry, historically trade at much higher price to earnings multiples.

A dramatic increase in demand for ethanol plants has taken place since the U.S. Government's mandate to double the ethanol content in gasoline, from 20 Billion liters per year to 40 Billion liters per year in the United States.

The A500 plants are designed by Floyd Butterfield, Diversified Ethanol's Chief Designer, who has been awarded honors for his past projects. These plants will include all of his updated features.

Diversified Ethanol's CEO, Taylor Moffitt, said, "We hope to produce the A500 quickly...and keep it for long term earnings or sell it for a quick profit, or both."

This press release does not constitute an offer of any securities for sale. This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ, including, without limitation, the company's limited operating history and history of losses, the inability to successfully obtain further funding, the inability to raise capital on terms acceptable to the company, the inability to compete effectively in the marketplace, the inability to complete the proposed acquisition and such other risks that could cause the actual results to differ materially from those contained in the company's projections or forward-looking statements. All forward-looking statements in this press release are based on information available to the company as of the date hereof, and the company undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this press release.

Source: Business Wire

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