FOR IMMEDIATE RELEASE:
December 18, 2007

Contact
Kevin Kuykendall, Managing Director, Energy Group (214) 273-6634
Kacy Ellis, Vice President, Energy Group (214) 273-6639
Brian Maney, Director, Corporate Communications (301) 951-6122

AMERICAN CAPITAL INVESTS IN FORMATION OF SUNFUEL MIDSTREAM

Bethesda, MD – December 18, 2007 – American Capital Strategies Ltd. (Nasdaq: ACAS) announced today that it has invested in the formation of SunFuel Midstream, which will acquire, build, finance and operate midstream biofuel infrastructure assets.

“We are investing in a new company, which will develop critically needed midstream infrastructure for the rapidly growing biofuel industry and will be led by a proven executive with extensive industry experience,” said Darin Winn, American Capital Regional Managing Director.  “In addition to providing one stop financing, American Capital’s Energy Group brings expertise in all facets of the energy industry from production and transmission to distribution and services. With a portfolio that includes investments in ethanol production as well as in oil production, gas production, pipeline services, refined products transportation, oilfield services and equipment manufacturing, the Energy Group possesses invaluable knowledge of the entire sector and its dynamics.”

American Capital has invested directly and through its funds under management approximately $10.5 billion in the last twelve months, approximately $10 billion year to date and over $1.6 billion quarter to date.  Not including funds under management, American Capital has invested approximately $7.9 billion in the last twelve months, approximately $7.3 billion year to date and over $1.3 billion quarter to date. American Capital has assisted in the refinance or syndication of approximately $1.5 billion of senior debt for its portfolio companies in the last twelve months and approximately $860 million from July 2007 to date. For more information about American Capital’s portfolio, click here.

“SunFuel Midstream will address the infrastructure bottlenecks in the biofuel industry, which have developed as production has skyrocketed and were driven by regulatory efforts to reduce carbon emissions and decrease dependence on imported oil,” said Kevin Kuykendall, American Capital Managing Director, Energy Group. “Chief Executive Chris Muehling, as a senior executive in our former portfolio company ASAlliances Biofuels, has successfully overseen virtually all aspects of the biofuel business and established marketing alliances with major petroleum companies and ethanol and biodiesel producers. With his impressive track record, he is ideally suited to build the new company into a significant participant in the development of biofuel infrastructure.”

“SunFuel Midstream will be positioned to fill a variety of critical gaps in the biofuel blending, storage and transportation infrastructure. Its scope of anticipated projects include retrofitting or building terminals with biofuel blending and storage capabilities, constructing unit train receiving terminals and developing gathering terminals near multiple small biofuel producers,” said Kacy Ellis, American Capital Vice President, Energy Group.  “While premised on continued strong growth in the biofuel industry, the new company’s business model is protected from substantial existing volatility in biofuel, corn and natural gas prices.”

SunFuel Midstream, to be based in Dallas, TX, will acquire, build, finance and operate biofuel infrastructure assets such as biofuel storage and blending terminals, rail, barge and truck receiving logistics terminals and rail and truck gathering logistics terminals. The company will derive its revenues by charging throughput and storage fees for use of its infrastructure and by blending biofuel for its own account.

“I am delighted to be working with American Capital in launching this important new entrant in the biofuel industry,” said Chris Muehling, SunFuel Midstream Chief Executive Officer.  “As a member of the executive team at ASAlliances Biofuels, I have seen firsthand the extraordinary value that American Capital brings to its investment partnerships and I look forward to an equally rewarding relationship in our new venture.”

ABOUT AMERICAN CAPITAL ENERGY GROUP

The American Capital Energy Group invests senior debt, subordinated debt and equity across all segments of the energy industry, including production, transportation, processing, distribution, services and equipment manufacturing in oil and gas, power and alternatives, including biofuels, wind, and solar. Companies interested in learning more about American Capital's energy initiative should contact Kevin Kuykendall at (214) 273-6634, or visit the website at www.americancapital.com/energy.

ABOUT AMERICAN CAPITAL

American Capital is the only alternative asset management company in the S&P 500. With $19 billion in capital resources under management, American Capital is the largest U.S. publicly traded private equity fund and one of the largest publicly traded alternative asset managers. American Capital, both directly and through its global asset management business, is an investor in management and employee buyouts, private equity buyouts, and early stage and mature private and public companies. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions, recapitalizations and securitizations. American Capital and its affiliates invest from $5 million to $800 million per company in North America and €5 million to €500 million per company in Europe.

As of November 30, 2007, American Capital shareholders have enjoyed a total return of 511% since the Company's IPO, an annualized return of 19%, assuming reinvestment of dividends.  American Capital has paid a total of $1.9 billion in dividends and paid or declared $26.16 dividends per share since going public in August 1997 at $15 per share.

Companies interested in learning more about American Capital's flexible financing should contact Mark Opel, Senior Vice President, Business Development, at (800) 248-9340, or visit www.AmericanCapital.com or www.EuropeanCapital.com.

Performance data quoted above represents past performance of American Capital. Past performance does not guarantee future results and the investment return and principal value of an investment in American Capital will likely fluctuate. Consequently, an investor's shares, when sold, may be worth more or less than their original cost. Additionally, American Capital's current performance may be lower or higher than the performance data quoted above.

This press release contains forward-looking statements. The statements regarding expected results of American Capital are subject to various factors and uncertainties, including the uncertainties associated with the timing of transaction closings, changes in interest rates, availability of transactions, changes in regional, national or international economic conditions, or changes in the conditions of the industries in which American Capital has made investments.

This announcement is neither an offer to sell nor a solicitation to buy securities.
This announcement appears as a matter of record only.