Patriot Coal Bonds Show Potential In Bankruptcy [View article]
Holmes-boy, lookey here what I wrote 8 (that's right, eight) months ago on the valuation of Patriot. http://seekingalpha.co...
an excerpt: Q: Can you walk through the value/ton of reserves approach?
A: Wilbur Ross paid $0.79/ton of reserves in 2004 when he bought Horizon for $786mm. Consol (CNX) paid $1.68/ton for Amvest, PCX itself paid $1.18/ton for Magnum in 2008. Deals at the peak include Massey buying Cumberland in 2010 for $2.31/ton and then Alpha Natural Resources (ANR) buying Massey at $3.06/ton. There are many more but I think the message is clear. Now I have stated I believe PCX to be worth $1.3 billion, so that backs into $0.67/ton of reserve, in line with prices back when the sector was last in its true down cycle and when we experienced a significant bankruptcy in the sector, namely James River Coal (JRCC). With all the looming EPA regulations and MSHA rules, coupled with the production shift from natural gas producers as a result of improved drilling techniques, we are left with a sector that suffers from very high costs and declining demand. So, to value these assets at $2/ton, and with the knowledge that the Magnum part of PCX was acquired for $1.18 in a better environment, we need to take a conservative view.
Q: Can you walk through the value/ton of annual production?
A: PCX sold 31mm tons of coal in 2011. The question is how many tons will they produce in 2012 and in the years further out? Horizon was acquired at $60/ton, Anker at $51/ton, Nicewonder at $74/ton, Amvest at $68/ton, Magnum at $39/ton (those are the assets PCX acquired), Cumberland at $123/ton. I project PCX will sell 21.9mm tons in 2012. At this time, 21.9mm tons seem like a reasonable figure to use going forward for the business. A $1.3 billion valuation backs into $59/ton. $59/ton may appear generous given historical valuations, however that does also factor production dropping by 29% in 2012.
How Much Natural Gas Do We Have Left? [View article]
Mark Anthony quote dated 5/31/12:
"Junc Bond:
All I ever heard these days are BANKRUPTCY BANKRUPTCY BANKRUPTCY BANKRUPTCY BANKRUPTCY BANKRUPTCY.
It's pure fearmongering. It takes many years of adverse market condition in a sector to drive any players to bankrutcy at all. I expect quick turn around in the coal sector. There will be no bankruptcy in any coal names."
Patriot Coal: The Vulture Has Landed [View article]
Latest Wilbur Ross thoughts on the coal industry in case you missed it. Wilbur is considered one of the best distressed players in coal. http://bloom.bg/Mz76BI
Coal Is Dead; Long Live Natural Gas [View article]
Or maybe somebody from XOM is reading this, in which case they'll squash the idea. Why don't we run cars on methanol like race cars do? Likely much cheaper than refining oil since methanol is made from methane (dry gas). lobbyists?...
Coal Is Dead; Long Live Natural Gas [View article]
Trtel,
Any idea of the scale/number of NG wells that have been drilled but not yet completed? I understand there are >1,000 wells in just one region of the Marcellus that are waiting to be completed.
The Darkest Coal Moment Before Dawn [View article]
Mark Anthony,
Simply put, your articles should be banned from Seeking Alpha as your analysis is consistently corrupt. You have also stated numerous times that the fast bankruptcy filing even surprised the bears. However, on several occasions you stated I was "fear mongering" when I stated there was a strong chance they would file in JUNE. Frankly, if anybody listens to any word this fellow has to say you deserve to lose all your money.
Patriot Coal Bonds Show Potential In Bankruptcy [View article]
lookey here what I wrote 8 (that's right, eight) months ago on the valuation of Patriot.
http://seekingalpha.co...
an excerpt:
Q: Can you walk through the value/ton of reserves approach?
A: Wilbur Ross paid $0.79/ton of reserves in 2004 when he bought Horizon for $786mm. Consol (CNX) paid $1.68/ton for Amvest, PCX itself paid $1.18/ton for Magnum in 2008. Deals at the peak include Massey buying Cumberland in 2010 for $2.31/ton and then Alpha Natural Resources (ANR) buying Massey at $3.06/ton. There are many more but I think the message is clear. Now I have stated I believe PCX to be worth $1.3 billion, so that backs into $0.67/ton of reserve, in line with prices back when the sector was last in its true down cycle and when we experienced a significant bankruptcy in the sector, namely James River Coal (JRCC). With all the looming EPA regulations and MSHA rules, coupled with the production shift from natural gas producers as a result of improved drilling techniques, we are left with a sector that suffers from very high costs and declining demand. So, to value these assets at $2/ton, and with the knowledge that the Magnum part of PCX was acquired for $1.18 in a better environment, we need to take a conservative view.
Q: Can you walk through the value/ton of annual production?
A: PCX sold 31mm tons of coal in 2011. The question is how many tons will they produce in 2012 and in the years further out? Horizon was acquired at $60/ton, Anker at $51/ton, Nicewonder at $74/ton, Amvest at $68/ton, Magnum at $39/ton (those are the assets PCX acquired), Cumberland at $123/ton. I project PCX will sell 21.9mm tons in 2012. At this time, 21.9mm tons seem like a reasonable figure to use going forward for the business. A $1.3 billion valuation backs into $59/ton. $59/ton may appear generous given historical valuations, however that does also factor production dropping by 29% in 2012.
How Much Natural Gas Do We Have Left? [View article]
"Junc Bond:
All I ever heard these days are BANKRUPTCY BANKRUPTCY BANKRUPTCY BANKRUPTCY BANKRUPTCY BANKRUPTCY.
It's pure fearmongering. It takes many years of adverse market condition in a sector to drive any players to bankrutcy at all. I expect quick turn around in the coal sector. There will be no bankruptcy in any coal names."
Patriot Coal: The Vulture Has Landed [View article]
http://bloom.bg/Mz76BI
Which Coal Miner Is The Next To Bankruptcy Protection? [View article]
Why James River Coal Will Likely Follow Patriot Coal Into Bankruptcy [View article]
Verso Paper's Merger Proposal With NewPage Has Become Scratch Paper [View article]
Check this:
http://bit.ly/MtXU2p
Which Coal Miner Is The Next To Bankruptcy Protection? [View article]
Can you please correct the poor grammar in the title? PhD in business, really?
L&L Energy Is A Profitable, Undervalued, Coal Company [View article]
http://www.msha.gov
Coal Is Dead; Long Live Natural Gas [View article]
Coal Is Dead; Long Live Natural Gas [View article]
Any idea of the scale/number of NG wells that have been drilled but not yet completed? I understand there are >1,000 wells in just one region of the Marcellus that are waiting to be completed.
Coal Is Dead; Long Live Natural Gas [View article]
http://seekingalpha.co...
Coal Is Dead; Long Live Natural Gas [View article]
Verso Paper's Merger Proposal With NewPage Has Become Scratch Paper [View article]
Grade: 2X A-, article C+
Which Coal Miner Is The Next To Bankruptcy Protection? [View article]
The Darkest Coal Moment Before Dawn [View article]
Simply put, your articles should be banned from Seeking Alpha as your analysis is consistently corrupt. You have also stated numerous times that the fast bankruptcy filing even surprised the bears. However, on several occasions you stated I was "fear mongering" when I stated there was a strong chance they would file in JUNE. Frankly, if anybody listens to any word this fellow has to say you deserve to lose all your money.