NEW YORK, NY / ACCESSWIRE / June 19, 2018 / Gevo shares were skyrocketing on Monday after the Environmental Protection Agency increased the volume of isobutanol for on road use. Shares soared as much as over 300% on the news and also sent shares of other biofuel stocks higher in sympathy. Shares of Baytex Energy were going in the opposite direction on Monday, closing down nearly 12% after announcing a deal to merge with Raging River Exploration.
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Baytex Energy Corp.
Gevo, Inc. shares exploded on Monday, closing the day up over 260%. Shares even soared as much as 500% after an Environmental Protection Agency decision increased the volume of a biofuel that the company makes that can be blended with gasoline for on-road use in cars. The EPA has raised the amount of isobutanol for on-road use from 12.5 percent blend level to a 16 percent blend level. Gevo Chief Executive Patrick Gruber stated, "At Gevo GEVO, we have been developing the markets for isobutanol containing gasoline, in particular to meet the demand for the "ethanol free" segment of the gasoline market. A 16% blend option will give our customers and partners an option for an even better product for on-road use."
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Baytex Energy Corp. shares closed down almost 12% on Monday with around 7.6 million shares traded. The stock saw the drop after the Canadian energy company agreed to merge with regional rival Raging River Exploration in an all-stock deal. As part of the deal, Raging River shareholders will get 1.36 shares of Baytex stock for every share of Raging River they own. Baytex CEO Edward LaFehr will be the CEO of the newly merged company. Shareholders didn't seem thrilled as the deal threatens to dilute the company's per share earnings. CEO Lafehr stated, "We believe the combined company will deliver a powerful combination of industry-leading returns, attractive production growth and strong free cash flow generation. The merger creates a company with world class assets and a strong balance sheet while retaining substantial torque to higher crude oil prices. We will be well-positioned to optimize our capital investment program across our high rate of return asset base. The combined company has a dominant 260,000 net acre position in the emerging East Duvernay Shale oil play which has the potential to compete for capital with the best plays in North America."
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