Mon, Nov. 23, 3:57 PM
- Peabody Energy (BTU +3.6%) has given up much of its early 15% gain but is still higher following Friday's news that it is selling its New Mexico and Colorado coal assets for $358M.
- J.P. Morgan analysts said earlier that the cash from the sale will be "helpful for maintaining liquidity and buying time," and anticipated the market's approval given the large short interest in many of the coal equities.
- JPM estimates the three mines in the sale are worth $450M-$540M, which - combined with the $105M reduction in liabilities - puts the deal at the lower end of the firm's valuation range but the $300M reduction in reclamation exposure is helpful; also, the sustainability of production at the Twentymile mine is seen as questionable.
Mon, Nov. 23, 9:19 AM
Fri, Nov. 20, 12:14 PM
- Peabody Energy (BTU -4.8%) and Cloud Peak Energy (CLD -5.1%) are downgraded to Sell at UBS, which says U.S. coal prices remain "cornered by market and regulatory forces."
- UBS says it sees the U.S. coal space remaining in a prolonged state of oversupply, with limited cost reduction potential left in the U.S. coal production base.
- "Any recovery in gas prices may come too late for the highly levered U.S. coal players, and even those with healthier balance sheets are having damage progressively inflicted as higher price legacy multi-year contracts roll off, cash burn continues, and utilities reduce forward coal purchases," UBS says.
- The firm maintains its Sell rating on Arch Coal (ACI -6.4%) and cuts its stock price target by 67% to $0.50; it also cuts targets for BTU by 82% to $6, CLD by 55% to $2.50, and Consol Energy (CNX -0.7%) by 10% to $9 with a Neutral rating.
Fri, Nov. 13, 10:47 AM
- The New York attorney general's office, which told Peabody Energy (BTU -1.7%) this week to disclose more details about potential financial risks from climate change regulations, is now considering whether the tactic could be applied to companies beyond the energy sector, Reuters reports.
- The AG investigation found that BTU repeatedly denied in public filings it could predict how potential climate change regulations would affect its business, even though its internal studies showed revenue could fall if coal were targeted in a carbon pollution crackdown.
- The BTU settlement could prompt companies to re-examine what they define as material to shareholders, and could pressure a range of companies facing regulatory risks over policy issues from obesity to soaring drug prices, according to corporate governance experts.
- At least one other case similar to BTU is in the works in New York, where the AG office reportedly opened an inquiry into whether Exxon Mobil misled shareholders about climate change risks.
Mon, Nov. 9, 10:17 AM
- Peabody Energy (BTU +4.1%) reaches an agreement with the New York attorney general to more fully disclose to investors the financial risks it faces from regulations related to climate change and other environmental issues.
- BTU’s concessions are in response to a two-year investigation by the AG that found the coal company had not been forthright with investors and regulators about threats to its business that were projected in private; the agreement does not include a monetary settlement.
- The AG's office also is probing Exxon Mobil to determine whether the company lied to investors and the public about the effect of climate change on its profits (I, II).
Thu, Nov. 5, 3:33 PM
- The New York attorney general's office has launched a sweeping investigation of Exxon Mobil (XOM -1.2%) to determine whether the company lied to the public about the risks of climate change or to investors about how those risks might hurt the oil business, NY Times reports.
- AG Eric Schneiderman is said to have issued a subpoena last night to XOM demanding extensive financial records, emails and other documents.
- XOM has denied allegations it has suppressed climate change research, and has said it had funded mainstream climate science since the 1970s.
- The report also says coal producer Peabody Energy (BTU +6.2%) has been under investigation by the AG for two years over whether it properly disclosed financial risks related to climate change but has not resulted in any charges or other legal action.
Tue, Oct. 27, 12:42 PM
Tue, Oct. 27, 12:38 PM
- Coal-focused Consol Energy (CNX -17.3%) and Peabody Energy (BTU -16.3%) are tanking after reporting Q3 earnings.
- CNX reported a $0.28/share loss, much weaker than analysts' expectations for a $0.05 loss, on revenue of $814M, better than the expected $723M; BTU's massive $8.13/share loss actually came in ahead of estimates.
- CNX, which in recent years has moved to shift more to natural gas, says it is beginning to see signs of potential improvement in the nat gas industry but offers no positive words for the coal industry, especially for thermal coal used to make electricity.
- In its earnings conference call, CNX execs declined comment about reports its joint venture in the Utica Shale with Hess could be sold.
- For BTU, Q3 Australian results rose as costs fell 28% Y/Y to $48.11/metric ton, benefiting from the low Australian dollar.
- BTU lowers its U.S. production guidance by 5M metric tons to 175M-185M, down from 180M-190M, with total sales volume, including Australia and trading and brokerage, cut to 222M-237M metric tons from 225M-245M.
Tue, Oct. 13, 12:10 PM
- Peabody Energy (BTU -2.1%) and Arch Coal (ACI -1.4%) are downgraded to Underweight from Neutral at J.P. Morgan, which expects growing shale gas supplies will keep gas prices down again next year, capping the upside for coal prices amid "the sausage machine of re-organization" in the coal industry.
- "The natural gas market remains oversupplied [as] utility coal stockpiles are building and the strong U.S. dollar is hurting coal exports," the firm says, adding that "currencies aren’t helping much by delaying the required supply response."
Wed, Oct. 7, 12:41 PM
- Peabody Energy (BTU -8.9%) and Cloud Peak Energy (CLD -1.6%) give back some of yesterday's gains, as Morgan Stanley says coal prices could remain weak for a few more years and forecasts U.S. utility coal burn to fall by 75 metric tons Y/Y to 774 metric tons in 2015 and remain near that level until 2020.
- The firm downgrades BTU and CLD to Equal Weight from Overweight, saying both companies need an uptick in coal pricing to remain or return to free cash flow positive.
- Also: ACI -12.2%, WLB -1.4%, CNX +4.4%, ARLP +2.6%.
- Earlier: Things can't get much worse for coal after disastrous 2015, analyst says (Oct. 6)
Tue, Oct. 6, 12:44 PM
Thu, Oct. 1, 12:34 PM
- Coal stocks (KOL -0.7%) are broadly lower after Moody's issues a weak forecast for the North American coal industry, saying the outlook "remains negative amid ongoing challenges for both metallurgical and thermal coal, including declining coal consumption and low met coal prices."
- The ratings agency forecasts a ~10% Y/Y decline in the industry's EBITDA for 2016, following the 25% drop it anticipates for 2015.
- BTU -10.7% after allowing for a 1-for-15 reverse split that took effect today; also ACI -5.4%, CNX -6.4%, WLB -5.1%, CLD -3%, ARLP -0.7%.
Thu, Oct. 1, 9:15 AM
Thu, Sep. 24, 3:22 PM
- Peabody Energy (BTU +25.4%) is surging following a Bloomberg report that a group of the company's senior lenders hired New York-based law firm Davis Polk & Wardwell in anticipation of talks to restructure its $6.3B in debt.
- The creditors hold BTU's $1.17B first-lien term loan and are concerned that any proposal by BTU could dilute the value of the assets that secure the debt.
- The news suggests BTU is serious about de-leveraging, and that such a move has the potential to wipe out some of the value of its outstanding debt.
- Arch Coal's (ACI +38.6%) agreement to extend its debt exchange plan for another month, seen as a potential benchmark for a debt swap by BTU, also is helping shares.
- Along for the ride: CLD +4.7%, WLB +5.4%.
Thu, Sep. 24, 12:40 PM
Tue, Sep. 22, 9:21 AM
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