<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
SLH Corporation
(Name of Registrant as Specified in its Charter)
----------------------------------------------------------
(Name of Persons(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration No.:
3) Filing Party:
4) Date Filed:
<PAGE>
EXPLANATORY NOTE
The following materials will be used in connection with oral
presentations to be made by management of SLH Corporation (the "Company") at
stockholders' meetings of the Company and Syntroleum Corporation to be held
August 6, 1998 and to institutional stockholders and analysts at meetings
beginning July 24, 1998. The materials relate to the proposal to approve and
adopt the Agreement and Plan of Merger dated as of March 30, 1998 by and between
the Company and Syntroleum Corporation and the transactions contemplated
thereby, which is to be voted upon at the referenced stockholders' meetings and
is described in the Company's Registration Statement on Form S-4 (Registration
No. 333-50253).
<PAGE>
Forward-Looking Statements
This presentation includes, or incorporates by reference, forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
that are intended to be covered by the safe harbors created thereby. These
forward-looking statements include, but are not limited to, statements relating
to the Syntroleum Process and related technologies, gas-to-liquids plants based
on the Syntroleum Process, anticipated capital and operating costs of such
plants, the timing of commencement and completion of construction of such
plants, obtaining required financing for such plants, the continued development
of the Syntroleum Process (alone or with partners) and the economic use of
gas-to- liquids plants. When used in this presentation, the words "anticipate,"
"estimate," "expect," "may," "project," "believe," and similar expressions are
intended to be among the statements that identify forward-looking statements.
Although SLH Corporation and Syntroleum Corporation believe their expectations
are based on reasonable assumptions, such statements involve risks and
uncertainties and no assurance can be given that actual results will be
consistent with these forward-looking statements. In particular, actual results
may differ from these statements for reasons described in "Risk Factors" or
discussed elsewhere in or incorporated by reference into the Joint Proxy
Statement/Prospectus contained in the SLH Corporation Registration Statement on
Form S-4 (File No. 333-50253) declared effective by the Securities and Exchange
Commission on July 2, 1998. Hypothetical examples used in this presentation are
not intended to imply anticipated or actual results.
1
<PAGE>
Gas and Its Markets Merger
[Image of world globe] [Image of handshake]
Syntroleum Process Syntroleum Strategy Introduction
[Image of chemical reaction) (Syntroleum logo] [Image of doorknob and keyhole]
Economics
[Image of paper money]
2
<PAGE>
Syntroleum Corporation
Developer and owner of a proprietary
process to convert natural gas into
synthetic liquid hydrocarbons (GTL) [Image of pilot plant]
Catalyst
Natural Gas + Air "Syngas"
_____________________________________________________________________________
Catalyst
Syngas Hydrocarbons + "By-Products"
[Images of molecules representing chemical reactions]
3
<PAGE>
Syntroleum Corporation
Syntroleum believes that
a significant opportunity
exists for cost effective [World map showing location of natural gas fields]
GTL plants due to large
stranded natural gas
resource base world-wide
Estimated stranded gas = 2,500 Tcf
or 250 billion barrels of oil
4
<PAGE>
Syntroleum Corporation
Syntroleum Believes Its Competitive
Advantages Include
o The low cost solution, and in many cases, the only solution
to monetize stranded gas
o A strong portfolio of intellectual property
o A network business model designed to:
o Create significant market penetration
o Rapidly improve the technology with industry partners
o Exploit high value markets
5
<PAGE>
Syntroleum Corporation
Our business strategy is to:
(1) Broadly license our technology to make fuels
[Logos of Marathon, ARCO, Texaco, Kerr-McGee, YPF and ENRON]
6
<PAGE>
Syntroleum Corporation
(2) Build and own GTL plants which make high value specialty products
[Map of Wyoming identifying Sweetwater County]
[Logos of Syntroleum and Sweetwater, LLC]
7
<PAGE>
Syntroleum Corporation
(3) Provide mobil GTL plants on a contract basis
8
<PAGE>
Syntroleum Corporation
(4) Further reduce costs through research and
development and technology acquisition
[Logos of Texaco, ARCO, Lyondell, Kerr-McGee,
Marathon, Bateman, Brown & Root, AMEC, ABB,
Criterion Catalysts, Catalytica and AGC]
9
<PAGE>
Syntroleum
Merger
[Image of handshake]
Pro formas
[Image of binoculars]
10
<PAGE>
Merger Overview:
Rationale
o SLH's stated objectives are to support Syntroleum, settle pending
IRS claims and liquidate non-Syntroleum assets
o Access to capital for Syntroleum
- $50MM from SLH
- Future public market transactions
o Avoids having two companies trading publicly on Syntroleum assets
o Greater availability of information to business partners and investment
community
11
<PAGE>
Merger Overview:
Timing
[Images of Clocks]
April 16 July 8 August 6
- -------- ------ --------
S-4 Filed Proxy Mailed Shareholder Meetings
May 29 July 27-31 August 7
------ ---------- --------
SEC Comments Information Close Merger
Road Show
12
<PAGE>
Merger Overview:
Mechanics
Exchange Ratio = Implied Syntroleum Stock Price
--------------------------------
SLH Stock Price
Implied Syntroleum = (SLH Price x 10,519,121) - $50,520,000
Stock Price -------------------------------------
5,950,000
[Graph showing exchange ratio at various SLH Stock Prices.
The following table shows numbers identified in the graph.]
SLH Stock Price Exchange Ratio
5 .06977
10 .91884
15 1.20187
20 1.34338
25 1.42829
30 1.48489
35 1.52533
40 1.55565
13
<PAGE>
Post Merger Syntroleum
NASDAQ Symbol: SYNM
o Current Syntroleum Board - Two SLH Directors
- Ken Agee and Mark Agee
- Four additional outside Directors
o Current Syntroleum
Management Kenneth Agee
Chairman/CEO
|
Mark Agee
President/COO
- ----|-----------|------------|----------------|--------------------|
Randall Larry Chuck Peter Eric
Thompson Weick Bayens Snyder Grimshaw
V.P.and CFO V.P. V.P.Engineering V.P. Product Sales V.P.and
Licensing General Counsel
14
<PAGE>
Syntroleum
Merger
[Image of handshake]
Pro formas
[Image of binoculars]
15
<PAGE>
Syntroleum
Process Typical Installations
[Image of chemical reactions] [Image of hypothetical GTL plant
mounted on barge]
16
<PAGE>
Fischer Tropsch Process
Discovered in 1923
- -Proven Chemistry
- -To date, uneconomic applications
Current practice:
Pure Oxygen Based Air Based
Shell X
Exxon X
Sasol X
Syntroleum X
17
<PAGE>
Fischer Tropsch Process
Creates Syntroleum advantages of:
o Lower Cost
o Safer
o Smaller format
o Adaptable
o Portable
18
<PAGE>
Typical F-T Process
[Diagram showing (i) production of synthesis gas using air separation plant
(endothermic), steam reformer (endothermic) and POX (exothermic) with inputs of
air(separated into O2 and N2 by air separation plant), natural gas and steam and
(ii) F-T synthesis using F-T reactor (exothermic), separator, recycle compressor
and hydrocracker to produce syncrude and process water.]
19
<PAGE>
Syntroleum Process
[Diagram showing (i) production of nitrogen-diluted synthesis gas using air
compressor and ATR (exothermic) with inputs of air, natural gas and steam and
(ii) F-T synthesis using F-T reactor (exothermic), separator and hydrocracker to
produce syncrude, tailgas and process water.]
20
<PAGE>
Syntroleum Process
Chain Limiting
High Alpha
Generation I
Generation II
Generation II with power option
Generation III
[Diagram showing (i) production of nitrogen-diluted synthesis gas using air
compressor and ATR (exothermic) with inputs of air, natural gas and steam and
(ii) F-T synthesis using F-T reactor (exothermic), separator and hydrocracker to
produce syncrude, tailgas and process water.]
21
<PAGE>
Syntroleum Typical Installations
Barge [Image of hypothetical GTL plant mounted on barge]
Land [Image of hypothetical land-based GTL plant]
22
<PAGE>
[Image of hypothetical GTL plant mounted on barge
next to off-shore oil drilling rig]
23
<PAGE>
[Image of hypothetical land-based GTL plant]
24
<PAGE>
Syntroleum
Hypothetical GTL Economics [Graph]
Released Oil Economics [Image of lock and key]
Ranges of GTL Economics [Graph]
25
<PAGE>
Hypothetical GTL Economics
($/Gallon) 10,000 barrels per day plant
- ----------------------------------------
Historical
GTL Assumptions
Revenue .45 Historical fuels range $.48-$.73/Gallon
Specialty range $1.19-$3.57/Gallon
Gas cost .12 Gas cost per MMBtu x 10
--- eg: $.50 x 10 = $5.00/Bbl
$5.00/Bbl + 42=$.12/Gallon
Gross Margin .33
Operating cost .09 Range = $.07 - $24/Gallon
depending on plant size and location
DD&A - 10 year S/L .48 Assumes $60,000/daily barrel for Historical;
--- $25,000/daily barrel for Fuels and
$28,000/daily barrel for Specialty Plants
Net operating
Income per barrel (.24)
o Released Oil Economics o Individual
o Comparison
26
<PAGE>
Hypothetical GTL Economics
($/Gallon) 10,000 barrels per day plant
- ---------------------------------------
Fuels
Plant Assumptions
Revenue .45 Historical fuels range $.48-$.73/Gallon
Specialty range $1.19-$3.57/Gallon
Gas cost .12 Gas cost per MMBtu x 10
--- eg: $.50 x 10 = $5.00/Bbl
$5.00/Bbl + 42 = $.12/Gallon
Gross Margin .33
Operating cost .09 Range = $.07 - $24/Gallon
depending on plant size and location
DD&A-10 year S/L .17 Assumes $60,000/daily barrel for Historical;
--- $25,000/daily barrel for Fuels and
$28,000/daily barrel for Specialty Plants
Net operating
Income per barrel .07
o Released Oil Economics o Individual
o Comparison
27
<PAGE>
Hypothetical GTL Economics
($/Gallon) 10,000 barrels per day plant
- ----------------------------------------
Specialty
Plant Assumptions
Revenue 1.54 Historical fuels range $.48-$.73/Gallon
Specialty range $1.19-$3.57/Gallon
Gas cost .12 Gas cost per MMBtu x 10
--- eg: $.50 x 10 = $5.00/Bbl
$5.00/Bbl + 42 = $.12/Gallon
Gross Margin 1.42
Operating cost .11 Range = $.07 - $24/Gallon
depending on plant size and location
DD&A-10 year S/L .19 Assumes $60,000/daily barrel for Historical;
--- $25,000/daily barrel for Fuels and
$28,000/daily barrel for Specialty Plants
Net operating
Income per barrel 1.12
o Released Oil Economics o Individual
o Comparison
28
<PAGE>
Hypothetical GTL Economics
($/Gallon) 10,000 barrels per day plant
- ---------------------------------------
Historical Fuels Speciality
GTL Plant Plant
Revenue .45 .45 1.54
Gas cost .12 .12 .12
--- --- ---
Gross Margin .33 .33 1.42
Operating cost .09 .09 .11
DD&A-10 year S/L .48 .17 .19
--- --- ---
Net operating
Income per barrel (.24) .07 1.12
o Released Oil Economics o Individual
o Comparison
29
<PAGE>
Released Oil Economics 10,000 CF = 1 Bbl
- -------------------------- 1 Tcf = 100 Million Barrels
Conversion Rule of Thumb
o "Associated" natural gas with no market, flaring
or reinjection can shut-in oil production
o Integrated economics can place high value on a GTL solution
o Assumptions: Oil to "syncrude" ratio of 6:1
Conventional crude oil find/dev/op cost $10 x 6 Bbl = $60
Syncrude break even cost: $16/Bbl
Hypothetical
Result: Combined average cost/Bbl = $10.86/Bbl
[Diagram showing (i) gas and oil reservoirs being drilled, (ii) syncrude being
produced using Syntroleum GTL plant and (iii) both crude and syncrude being
transported to storage and then to pipeline.]
30
<PAGE>
Syntroleum
Products
Stranded Gas Examples
World Gas Overview Map
Alternative Markets for Natural Gas
World's Gas Fields by Size
[Image of world map]
31
<PAGE>
World Gas Overview
1996 Identified Reserves 5,011 Tcf
[Image of world map showing location of natural gas fields]
Source: Petroleum Economist and Oil & Gas Journal
32
<PAGE>
World's Gas Fields by Size
(Outside N.A.)
- ------------------------------------------------------------------
50,000 BPD Size 15- 50-500 TCF Syntroleum believes
Plants fit only 2% of that GTL plants
Fields (86 Fields) 71- 5-50 TCF based on The
Syntroleum Process
234- 1 - 5 TCF can potentially access
over 50% of these
269- 0.5 - 1 TCF fields which hold
approximately 95%
276- 0.25 - 0.5 TCF of these reserves.
475- 0.1 - 0.25 TCF
1,195- [image of cone] 0.01 - 0.1 TCF
1,913- All others
less than .01 TCF
Total:
4,448 Fields Source: Oil & Gas Journal
33
<PAGE>
Stranded Gas Examples *Undeveloped TCF QTY.
(Outside N.A.) Non-Associated >5 58
Larger than >1-5 165
0.5 TCF >0.5-1 175
---
398
[Image of world map showing location of natural gas fields
within the above categories.]
Estimated stranded gas = 2,500 Tcf
or 250 billion barrels
Source: Petroconsultants S.A.
34
<PAGE>
World Gas Overview 1996
Identified Reserves
5,011 Tcf
Region 1996
Identified Reserves
(Tcf)
Central & South America 214
Africa & the Middle East 1,960
Asia 363
West and East Europe 169
North America 299
Russia & former Soviet Union 2,006
Total 5,011
35
<PAGE>
World Gas Overview 1996
Identified Reserves
5,011 Tcf
Gas Flared and Reinjected
1996
Million
BOE/D
Central & South America 0.4
Africa & the Middle East 1.97
Asia 0.25
West and East Europe 0.23
North America 1.2
Russia 0.07
----------------------------------------------------------
Total 4.12
Source: Petroleum Economist and Oil & Gas Journal
36
<PAGE>
Methanol Ammonia LNG
280,000 780,000 1,200,000
BOE/D BOE/D BOE/D
[Images of world map and barrels representing size of the markets]
37
<PAGE>
Crude Oil
70,000,000 B/D
(Middle Distillates)
36,000,000 B/D
[Image of barrel representing the size of the markets]
38
<PAGE>
Syntroleum Process Products
- ------------------------------------------------------------------------------
Light Syncrude Heavy Syncrude
|--------------|-------------| |
| Fuels | |
------------|------ -----|-------- ----------|--------
Middle
Basic Naphtha Distillates Slack Wax
Products Kerosene Diesel
(Jet Fuels)
-------------------- ------------- --------------------
Intermediate Paraffinic Solvents, Liquid Normal Finished Waxes,
Products Ethylene Cracker Paraffins Lubricant Basestocks
Feedstock
............ ..................... ............. .....................
End Use Paints and Stains, Drilling Fluids, Fully Refined Paraffins
Products Ink Oils Synthetic White Oils, HDD Oils,
Lamp Oils, Auto Trans Fluids,
Aluminum Rolling Oils, Gear Oils,
Chlorination Industrial Lubricants,
Feedstocks, Gas Turbine Lubricants,
Reaction Diluents, PCMO Lubricants,
Linear Alkyl Benzene PVC Lubricants,
Feedstock Rubber Compounding
Waxes
[Naphtha and middle distillates are identified as fuels.]
39
<PAGE>
Licensing
Own Technology
Specialty Advancement
Plants
Contract
GTL
40
<PAGE>
Licensing
41
<PAGE>
Goals
[Image of world globe]
Broadly license and support
The Syntroleum Process(R)
for fuels production outside
North America
Licensing
42
<PAGE>
Current Licensees
[Logos of Texaco, ARCO, Marathon,
Kerr McGee, YPF and Enron]
Licensing
43
<PAGE>
Structure
o Grants rights to build fuels plants only
o Prepaid royalty = present value of $.50 x plant capacity
o Catalyst margins of approximately $.25 per barrel of plant capacity
o Licensees have access to all intellectual property in the "pool"
o Licensee must grant all improvements back to the "pool"
o Currently 43 patents or patent applications
o Trade secrets
Licensing
44
<PAGE>
Contract
GTL
45
<PAGE>
Goals
Provide mobile GTL plants for:
o Extended well testing
o Smaller gas or associated gas fields
o Large projects waiting for permanent facilities
Contract GTL
46
<PAGE>
Mobile
[Image of hypothetical GTL plant mounted on barge]
Contract GTL
47
<PAGE>
Own
Specialty
Plants
48
<PAGE>
Goals
o Retained exclusive right to make "specialty" products worldwide
o Specialty products include:
Products Historical Prices
Lubricants $40-$200/Bbl
Drilling fluids $250-$300/Bbl
Waxes $30-$150/Bbl
Normal Paraffins $60-$85/Bbl
o Path to commercialize improvements
o Consistent revenue stream
Own Specialty Plants
49
<PAGE>
Sweetwater Plant (Current Status)
Natural Gas Pipelines:
Questar
Colorado Interstate
[Image of United States
map identifying Sweetwater Kern River
County in Wyoming
and showing major roads NW Pipeline
and pipelines]
Western Gas Resources
50
<PAGE>
Sweetwater Plant (Current Status)
o 32 acres located on Interstate 80
o Access to five natural gas pipelines, one crosses the property
o Access to railroad spur
o Water supply and disposal
o 8,000 BPD
o Targeted start-up in 2001
[Image of hypothetical land-based GTL plant]
51
<PAGE>
Technology
Advancement
52
<PAGE>
Partners
Syntroleum's Current Partners
and Their Contributions
FT Synthesis Heat Process
Partners Syngas Development Integration Design Other
Catalyst Reactor
Texaco o o o
Arco o o o o o
Marathon o
Bateman o o
Criterion o* o ISOM
Brown & Root o o o o
AMEC o
ABB o
Catalytica o o o New Process
AGC o
Lyondell o ISOM
Kerr-McGee o Hydrocracking
*Mfg Only
Technology Advancement
53
<PAGE>
Syntroleum 1998-2000 Milestones
o Plants
- Texaco/Brown & Root/Syntroleum
- Sweetwater
o Development
- Confirmation of recent improvements
o ARCO slurry
o Texaco HMX
o Research
- Horizontal reactor
- Chain limiting catalyst
- Technology acquisitions
o Additional licensees
o Additional engineering companies
54
<PAGE>
Syntroleum Corporation
Syntroleum Believes Its Competitive
Advantages Include
o The low cost solution, and in many cases, the only
solution to monetize stranded gas
o A strong portfolio of intellectual property
o A network business model designed to:
o Create significant market penetration
o Rapidly improve the technology with industry partners
o Exploit high value markets
55
<PAGE>
Syntroleum Corporation
Pro forma Financials - December 31, 1997
Income Statement Balance Sheet
- -------------------------------- ---------------------------------
Assets (000)
------
Revenue (000) Total Current $ 50,139
- ------- Property Plant &
Real Estate Sales $ 16,557 Equipment 1,328
Joint Development 2,793 Other Non-Current 12,296
------- ------
Total Revenue $ 19,350 Total $ 63,763
Expenses Liabilities
- -------- -----------
Cost of Real Estate Deferred Revenue $ 11,000
Sold $ 16,566 Other 2,954
Pilot Plant, R&D 5,981 -------
Catalyst Services 4,800 Total Liabilities $ 13,954
General and Admin. 6,262
------
Total Expenses 33,609 Shareholders' Equity 49,809
Other Net 13,991 ------
------- Total $ 63,703
Net Income $ (268)
56
<PAGE>
Syntroleum Historical Results
(000) 1995 1996 1997
- ----------------------------------------------------------------------------
Operating Revenue $45 $615 $2,007
Expenses 1,200 2,540 7,172
Catalyst Services -- -- 4,800
Net Income (Loss) $(1,145) $(1,937) $(9,611)
Balance Sheet (000) Dec. 31, 1997 Accounting Policy
- ----------------------------------- -------------------------------
Assets License fees are deferred until:
- ------
Current 10,000
Non-Current 2,091 - Process Design Package
------- is delivered (50%)
Total $12,091
Liabilities - Plant passes performance
- ----------- test (50%)
Current and Other 2,333
Deferred Revenue 11,000
Shareholder's Equity (1,242) R&D and Pilot activities
-------- are expensed
Total $12,091
57
<PAGE>
Hypothetical
GTL Economics Conversion Rule of Thumb
[Interative graph showing dollar per barrel product price book breakeven
amounts at various plant costs (on a per barrel of daily plant capacity basis)
using expense amounts for transportation, gas cost and operations & maintenance
that are input into the computer program through which the presentation is
made.]
58
<PAGE>
Hypothetical Conversion Rule of Thumb
GTL Economics
Cost at Various Plant Sizes
[Interactive graph showing dollar per barrel product price book breakeven,
profit margin and unlevered internal rate of return amounts using expense
amounts for transportation, gas cost, operations & maintenance and depreciation
(10 year straightline) that are input into the computer program through which
the presentation is made. The following are the hypothetical plants illustrated
in the graph.]
Plant
$12-14 K/BDC
Max. Train
$14-18 K/BDC
~10,000 Bbl/d
$18-24 K/BDC
~5,000 Bbl/d
$24-30 K/BDC
~2,500 Bbl/d
$30-40 K/BDC
~2,000 Bbl/d
59
