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SYNM News Syntroleum Announces Sale of Its Exploration and Production Holdings

TULSA, Okla.--(BUSINESS WIRE)--Syntroleum Corporation (Nasdaq:SYNM) announced today that its subsidiary, Syntroleum International Corporation, has signed a letter agreement with Energy Equity Resources Limited (“EER”) for the sale of Syntroleum’s exploration and production holdings. Syntroleum could realize up to $25 million from this sale, subject to certain conditions.

The transaction will be effected through the sale of 100 percent of the stock of Syntroleum International Holdings, Ltd. and Syntroleum International Holdings Company. Through a subsidiary, Syntroleum International Holdings, Ltd. and Syntroleum International Holdings Company own Syntroleum’s 25 percent cost bearing interest in Oil Mining Lease (“OML”) 113, which includes the Aje field, and its 20 percent interest in the Ajapa field in OML 90. Both fields are located off the coast of Nigeria.

EER has paid Syntroleum a non-refundable $2 million deposit, and will also pay an additional $10 million to Syntroleum by April 1, 2007, or at the time EER completes its raising of additional capital pursuant to any form of private placement or public offering, whichever occurs first. Payments of an additional $13 million could be earned from future farm-outs of the Aje field and initial production from the Aje and Ajapa fields. Closing of this transaction will occur on or before January 31, 2007.

“The monetization of our upstream exploration and development interests through this transaction is beneficial to Syntroleum on several fronts,” said Jack Holmes, president and CEO of Syntroleum. “The elimination of both our capital cost obligations and the commitment of our management resources to upstream activities, coupled with the proceeds realized from the sale will allow us to more closely focus on the commercialization and funding of our portfolio of technologies on a global basis.”

Previously, EER and Syntroleum’s subsidiary, Syntroleum Nigeria, entered into agreements whereby EER obtained a 7.5 percent interest in OML 113, and a 20 percent interest in the Ajapa field.

About Syntroleum (Nasdaq:SYNM)

Syntroleum Corporation owns a proprietary process for converting natural gas or synthesis gas derived from coal and other carbon-based feedstock into synthetic liquid hydrocarbons. The company plans to use its technology to develop and participate in natural gas and coal monetization projects in a number of global locations.

This document includes forward-looking statements as well as historical information. Forward-looking statements include, but are not limited to, statements relating to the amount of oil, natural gas and GTL product reserves, possible production rates, drilling results, oil and gas exploration and development plans and operations, oil and gas well characteristics, cost and productivity, negotiations with industry participants and governmental entities, project financing and timing, receipt and amount of project revenues, and the use and effectiveness of the Syntroleum Process and related technologies and products. When used in this document, the words "anticipate," "believe," "estimate," "expect," "intent," "may," "project," "plan," "should," “could,” and similar expressions are intended to be among the statements that identify forward-looking statements. Although Syntroleum believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements include the failure to receive governmental approvals, the failure to assign a participating interest to Syntroleum and/or to an industry participant, failure of the wells to produce as the previous test wells, the potential that commercial-scale GTL plants will not achieve the same results as those demonstrated on a laboratory or pilot basis or that such plants will experience technological and mechanical problems, the potential that improvements to the Syntroleum Process currently under development may not be successful, the impact on plant economics of operating conditions (including energy prices), construction risks, the ability to implement corporate strategies, competition, intellectual property risks, Syntroleum’s ability to obtain financing and other risks described in the company’s filings with the Securities and Exchange Commission.

® “Syntroleum” is registered as a trademark and service mark in the U.S. Patent and Trademark Office