Most oil stocks are hot, but shares of Syntroleum (NASDAQ:SYNM) have registered a jaw-dropping 36.9% decline over the past two trading days. What gives? Or, in this case, what gave out?

Fueling the sharp sell-off was word yesterday that the company is abandoning its much-touted but unsuccessful Aje-3 appraisal well off the coast of Nigeria. As recently as August, the company was promoting Aje-3 as the "ideal location for Syntroleum's unique marine-based GTL [gas-to-liquids] technology."

The beauty of GTL technology is that it can produce liquid fuels from natural gas for use in vehicles. (The company is developing a similar process for coal, too.) Since natural gas is worthless without a pipeline to extract it, GTL offers a way to convert that gas to high-value liquids that can then be moved by conventional means. Syntroleum owns a proprietary process for GTL.

Syntroleum has been thought to have the inside track with its technology because it used natural air for its extraction, not the pure oxygen that other processes required. Plus, the company's process is a simple, single-pass design. The combination is expected to offer cost savings over more complex designs.

Today, Syntroleum is using a demonstration plant to produce up to 70 barrels of synthetic products. What the company needed, and lost, was a way to get out of the demonstration mode and get into real production. Since GTL requires a significant capital investment, the company needs to woo a partner that will shoulder the financial burden and get the technology proven in a real-world setting.

The company used yesterday's conference call to remind shareholders that there will be another well drilled on the Aje Nigerian block, which already has yielded two successful wells -- neither of which, however, is a Syntroleum project. Recent financial agreements have put the company on a solid financial footing for the near term. As of this past June 30, the company had a shelf registration of $102 million available to help it fund its needs.

So, with that in mind, is it time to consider investing in Syntroleum?

For now, high natural gas prices in North America have to be benefiting the company's efforts to find partners. But I can't help thinking that the stock will experience continued weakness until the company is able to bring more near-term actions to the table.

Investors looking for others offering GTL technology might consider Sasol (NYSE:SSL). That company has a 50/50 joint venture with ChevronTexaco (NYSE:CVX) that is nearing competition of a 30,000-barrel-per-day plant in Qatar. And perhaps just as notably, Sasol was recently awarded a GTL contract in Nigeria.

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Fool contributor W.D. Crotty owns shares of ChevronTexaco. Click here to see The Motley Fool's disclosure policy.