GTL: Exploiting Remote Gas Discoveries

Nasdaq: SYNM

Jack Holmes

IPAA Oil & Gas Investment Symposium

April 19, 2004

2

Forward Looking Statements

This presentation includes forward-looking statements as well as historical information. These forward-looking statements may include statements relating to the Syntroleum Process and related technologies, liquefied natural gas development, the GTL Barge and other gas-to-liquids plants based on the Syntroleum Process, anticipated costs to design, construct and operate these plants, anticipated costs to make products from these plants, the timing of commencement and completion of the design and construction of these plants, obtaining required financing for these plants, the economic construction and operation of gas-to-liquids plants, the value and markets for plant products, testing, certification, characteristics and use of plant products, the continued development of the Syntroleum Process (alone or with partners), anticipated capital expenditures, anticipated revenues and any other statements regarding future growth, cash needs, operations, business plans and financial results. When used in this presentation, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “should” and similar expressions are intended to be among the statements that identify forward-looking statements. Although we believe that expectations reflected in these forward-looking statements are reasonable, these kinds of statements involve risks and uncertainties. Actual results may not be consistent with these forward-looking statements. For discussion of these risks and uncertainties we refer you to the risks described under “Risk Factors” in our Annual Report on Form 10-K.

3

Syntroleum Investment Profile

NASDAQ: SYNM (Common) SYNMW

(Warrants)

Shares O/S (Mil): 39.4

Warrants O/S (Mil): 2.6

Market Cap (Mil $): 250

Float (Mil): 24.0

Research: Merrill Lynch

Management & Insiders: 39%

Institutional: (1) 36%

Retail: 25%

Top Institutional Holders:• Oakmont Corporation (2)

• Wellington Management • Southern Fiduciary Group• Strong Capital Management• Sterling Johnston Capital

(1) Excludes Oakmont Corporation(2) Sits on the Board of Directors, owns 18%

Investor Relations Contact:

Ron Stinebaugh, VP Corp Finance

(918) 592-7900 or (281) 873-6392

4

History of GTL Synthetic Fuels

5

Syntroleum Gas To Liquids Process

RefiningDieselNaphthaLPG

Air

Natural Gas

Reformer

CO + 2 H2

Syngas

Fischer-Tropsch

Normal paraffin

Waste Heat = Power, Desalination

6

GTL Product Distributions

Raw Products from the FT Reactor:

Light FT Syncrude Liquid at Room Temp.

Heavy FT Syncrude Solid at Room Temp.

Refined Products from Light and Heavy FT Syncrude after upgrading:

LPG C3 – C4

Naphtha C5 – C9

Middle Distillate Refinery output consisting of jet fuel/kerosene, diesel.

Jet/Kerosene C8 – C15

Diesel C10 – C20

C20C5C1 C60

Light FT Syncrude

Heavy FT Syncrude

Volu

me %

FT REACTOR OUTPUT

C20C5C1 C60

Die

sel

Jet

Fu

el

Nap

hth

aLP

G

Volu

me %

PRODUCT UPGRADING OUTPUT

7

Syntroleum Technology Advantage

• Unique air-based design eliminates costly oxygen plant to make syngas

• Air offers safety advantages and is scalable to small plant sizes

• Over 100 patents - issued and pending

• 20 years of R&D and over $100 million invested

Simplified Syntroleum Process

Shaded areas show eliminated oxygen-based equipment

8

Syntroleum Experience

• Over 3,000 hrs of pilot plant data at plant design conditions

Syntroleum’s 2 Bpd Pilot Plant Tulsa, Oklahoma, USA

Syntroleum $60 million Catoosa GTL Demonstration Plant, 70 Bpd – Tulsa, Oklahoma, USA

• Co-funded by Syntroleum, U.S. DOE and Marathon

• Clean fuels for testing• Train operators for commercial plants• First fuels shipped March 2004

Diesel fuel being shipped in 6,000 gal iso-container

Pilot Scale Demonstration Scale

9

S. America – 250 Tcf

N. America –252 Tcf

Africa– 418 TcfAsia & Australia – 445

Tcf

CIS & Europe – 2156 Tcf

World Gas Overview

Source: BP Statistical Review of World Energy 2003

Middle East – 1980 Tcf

TOTAL = 5,500 Tcf Stranded Gas > 2,500 Tcf

1 Tcf of Natural Gas = 100 Million Barrels of GTL Fuels

10

Plenty of Gas for Both GTL & LNG

Current 136

Firm New Commitments 65 72 3%

Planned 200 220 9%

2010 LNG Plant Capacity(1)

Million Tonnes/y

r

20 Yr. Gas Reserves, Tcf

% of 2,500 Tcf

GTL Plant Capacity (2)

Million Barrels/d

Planned 1 73 3%

% of 2,500 Tcf

(1) Source: CERA

(2) Source: BP

20 Yr. Gas Reserves, Tcf

11

Markets for Stranded Gas

Methanol Ammonia LNG Middle Distillates

25 Million Bpd

Million BOE/d

1.5 Million BOE/d

0.5 Million BOE/d

Sources: 2001- American Methanol Association, Fertecon Ltd., 2003 - BP Statistical Review of World Energy

2.6

12

Clean Fuels, Easily Sold

Syntroleum GTL Diesel –– Can be sold in existing markets – Compatible with existing infrastructure

(pipelines, storage terminals, retail pumps)– No sulfur or aromatics – Performs better than conventional diesel– Valuable blending stock to meet new guidelines

2006EPA

Diesel

Sulfur (PPM) 350 10 50 0

Aromatics (%) 30 30 N/ A 0

Cetane Number 45 45 49 >74

Property

Current EPA

Diesel

Syntroleum GTL Diesel

Current E.U.

Diesel

13

Integrated GTL Projects Include Full Wellstream

Well Head

Condensate (API >50o) Produced at well head

5 – 20 barrels per Mmscf

Minimal capital cost per daily barrel

5 – 20 million barrels per Tcf

Liquefied Petroleum Gas (LPGs) – Propane, Butane etc Stripped from natural gas stream

2 - 5 gallons per mcf (gpm)

$ 800 to $ 1,200 capital cost per daily barrel

48 – 110 million barrels per Tcf

Methane – CH4 Converted to GTL Fuels

13 to 1 - 10 to 1* conversion ratios

$33,000 to $ 20,000 capital cost per barrel

75 - 100 million barrels per Tcf

Natural Gas

* 10 to 1 conversion indicates that 10 mcf of gas converts to 1 barrel of GTL fuel

• GTL Plants with access to only Methane need to be large and efficient to be economic

• With LPGs and condensates, smaller GTL plants provide great economic returns

14

Range Of Current Capital And Gas Reserves For GTL

0

1

2

3

4

5

- 25 50 75 100 125 150 Uni

t Cap

ital C

ost (

1000

$/B

pd)

GTL Capacity Barrels Per Day (GTLs Only)10

15

20

25

30

35

Tota

l Cap

ital C

ost (

Bil

$) GTL Barge (Only GTLs)

20-year Reserves, Tcf

2 4 6 8 100

GTL Barge (w/ LPGs)

Smaller plants have a higher chance to access full wellhead gas stream

* Based on AMEC engineering cost estimates on Syntroleum plant designs

15

0

2

4

6

8

10

0 5 10 15 20 25

20 Year Reserves (in Tcf)

Capi

tal C

ost (

Billi

on $

)

GTLLiquefaction Only

Liquefaction + Shipping

Liquefaction + Shipping + RegasLNG

GTL Niche Is Easier To Enter – Requires Less Capital And Less Gas

LNG Cost Basis - Liquefaction & Shipping(Qatar to U.S.) - Greenfield - $225/Tonne, Brownfield - $200/Tonne; Regas - $40/Tonne

16

GTL Barge Based on DoD Project Experience

• GTL Barge design utilizes experience from Syntroleum’s Department of Defense Barge project– $3.5 million project cost funded by the U.S. Department of

Defense– Engineering work performed by , Bath Iron Works

(General Dynamics) and American Bureau of Shipping

17

GTL Barge Details

Natural Gas 177 Mmscf/d

Barge produces into a moored FSO or to a loading buoy

Ultra Clean Diesel

8,700 Bpd

Naphtha

7,300 Bpd

LPG

4,400 Bpd

Barge Statistics Barge Size 250’ x 450’ x 11’ draft Barge Weight 35,000 Dwt

Barge Costs Capital $400 Million Operating Cost $72,000/ day

LPG Plant GTL Plant

Diesel 0 8,700

Naptha 4,100 3,100

LPG 4,000 400

Total 8,200 12,200

Total GTL Barge Products = 20,400 Bpd

20 Year Production = 140 Million Barrels

18

Typical Syntroleum GTL Barge Project

Barge Construction

Far East

Diesel

NY Harbor

Naphtha

Europe

LPGS. America

Installed Barge

W. Africa

Barge Dry Haul

19

GTL Barge Targets 1-3 Tcf Gas Fields

Syntroleum GTL Barge’s niche opportunity is smaller fields.

LNG and World scale GTL projects only target larger fields

*Source: IHS Energy Group, 1998

World’s Gas Fields by Size (Outside N. America)*

20

Initial Sample of Gas Fields Show 8 Billion Bbl Opportunity

– Screening criteria

• Uncontracted gas, 1-3 Tcf range, proximity to shore, low delivery cost

– 40 locations in 15 countries

– GTL Barge only GTL process capable of monetizing these fields

*Wet gas that includes LPGs

CountryLong

No. of Attractive

Fields

GasReserves

(Tcf)*

Oil & Condensate

(Mmbbls)

Africa 13 12 457Australasia 13 31 221Latin America 5 7 390Middle East 9 13 317Total 40 63 1,385

1 Tcf = 100 million barrels

63 Tcf = 6.3 billion barrels Plus 1.4 billion barrels of oil and condensate

8 billion barrels of liquids

21

Exploiting Discovered Gas With GTL Competes With Typical E&P

The Syntroleum GTL Barge monetizes stranded gas reserves at finding, development and production costs of $12.52 per barrel of finished fuels.

This compares to the 2002 average finding, development & production costs of $11.52 per barrel of crude oil*.

The cost to refine this crude oil into fuels is another $5.00 per barrel.

*Source: 2003 John S. Herold, Inc. , Herold Global Upstream Performance Review

(Book basis) $/BOEGas Field Development Cost and Lease Operating Cost (@ $0.70/mcf) 5.85$ Plant Capital Cost 2.88$ Plant Operating Cost 3.79$ Total 12.52$

(Book basis) $/BOEFinding & Development Cost 5.82$ Production Cost 5.70$ Total Cost For Crude Oil 11.52$

Refinery Crack Spread 5.00$ Total Cost For Fuels 16.52$

Typical E&P Development

Development Using GTL

22

0

2

4

6

8

10

12

14

0 2 4 6 8 10 12 14 16 18 20

Finding & Development Costs

Pro

du

ctio

ns

Co

sts $11.52/Bbl Isocost Line

GTL Barge Can Help Improve Costs

1) 90 companies - large and mid size 2) 18 (20%) companies plot off the

chart

*Source: John S. Herold, Inc. Global Upstream Performance Review 2003 Data

1) 90 companies - large and mid size 2) 18 (20%) companies plot off the

chart

GTL Barge

23

GTL Barge Produces Steady, Long Term Cash Flow

Barge Capital Cost = $400 mil Gas Cost =$0.70/MCF

Operating Cost = $72,000/day LPG Content = 2 GPM*

WTI =$25/Bbl (Unescalated) Pre-Tax Annual Cash Flow = $110 million/year

*GPM stands for gallons of Liquefied Petroleum Gas per 1000 cubic feet of gas.

(250)

(200)

(150)

(100)

(50)

-

50

100

150

2004 2007 2010 2013 2016 2019 2022 2025

Millio

n $

24

2 GPM3 GPM5 GPM

15%25%35%45%55%65%

15 20 25 30 35

WTI $/Bbl

IRR

2 GPM

3 GPM5 GPM

100

400

700

1,000

1,300

1,600

15 20 25 30 35

WTI $/Bbl

NPV

-10 M

il $

GTL Barge Economics

Economic Sensitivity to WTI Price vs. LPG Content at $0.70/MCF Gas Cost to Plant

NPV and IRR are on a Pre-Tax and Unlevered Basis

Base Case

Base Case

25

GTL Barge Business Models

• Tolling arrangement – GTL Barge converts gas to liquids for a fee

• Purchased gas – GTL Barge purchases gas from producer for GTL

conversion. Fields that are currently flaring gas are ideal for this

model.

• Integrated Field Development – GTL Barge acquires gas

reserves to develop an integrated field/GTL Barge project, which

includes both gas production and GTL conversion

26

GTL Barge Development Team

• Contribute technology license

• GTL Barge design• Invest equity

TI Capital

GTL Barge

• Acquire natural gas reserves exclusively for Syntroleum

• Cost verification• Engineering & construction• Equity investment

• Product transport and marketing

• Equity investment

Developer and owner of GTL technology

Successful track record worldwide with focus on W. Africa

Sub of ACS, one of the largest European EPC Co

Financing arm of Middle-East crude shipping co.

27

Qatar Leads In GTL Project Activity

Marathon 120,000 Bpd GTL Plant to be located at Ras Laffan and use

gas from the North Dome Field

CompanyProject Status

Capacity1000 Bpd

Sasol* Construction 34+Chevron Announced 66+Chevron Planned 130

Shell HOA/FEED 140

Conoco LOI 160

Marathon** LOI/Feasibility 90-120650

* Project financing by Royal Bank of Scotland

** Uses Syntroleum FT under license

28

Partners: Gazprom, Lukoil

Status:Studies underway

Project Scope:Gazprom: GTL on 12 fields with potential for 30,000 - 230,000 bpd Lukoil: Associated gas processing

Russia – Syntroleum and Partners

29

Syntroleum Well Positioned In Emerging GTL Industry

• GTL is a “game changing” technology • Huge stranded gas reserves with little geologic risk

– U.S. gas shortage focusing attention on these reserves• Enormous fuel market

– Increasing environmental pressure for clean fuels• Improving GTL economics evidenced by Qatar projects

– Shell, SasolChevron, ConocoPhillips, Marathon• Syntroleum’s air blown process provides high barriers to

entry• Management focused on project implementation• Syntroleum is a pure play on emerging GTL industry