Tue, Feb. 3, 10:46 AM
- Arch Coal (ACI +8.9%) opens sharply higher after reporting a smaller than expected Q4 loss as it cut costs to $16.46/ton from $18.10/ton in the prior-year quarter.
- ACI says it is suspending its annual dividend to preserve current levels of liquidity, although Cowen analysts say the suspension will save only ~$2M/year.
- ACI says it had available liquidity of ~$1.2B at year-end 2014.
- Expects costs in the Powder River Basin and Appalachian region, which account for most of its coal production, to fall in 2015, reflecting an improved rail performance, the impact of lower diesel prices and a full year of steady production at its low-cost Leer mine in West Virginia.
- ACI also says it expects capital spending of $145M-$160M in 2015, roughly flat vs. 2014's $147M in capex.
- Forecasts FY 2015 coal sales of 130M-143M tons after selling 134.4M tons in 2014 and 35.2M tons in Q4 (+9% Y/Y).
- Other coal names also are higher: ANR +7.8%, BTU +5.6%, CLD +2.3%, WLB +2.6%, WLT +9.4%, CNX +1.7%, RNO +4.3%.
Tue, Jan. 27, 11:28 AM
- Peabody Energy's (BTU -6.7%) move to slash its quarterly dividend to less than a penny a share is helping push coal company stocks (NYSEARCA:KOL) lower: WLT -1.6%, ACI -1%, CNX -1.8%, CLD -2%, WLB -5.4%, ARLP -1.2%.
- Cowen analysts see the move as "a prudent move amid uncertain coal markets," and Sterne Agee says the dividend cut will save BTU $100M in annual cash payments.
- Citigroup's Brian Hu maintains a Buy rating on BTU, saying that although management expects U.S. thermal coal demand to fall by 50M-60M tons in 2015, "BTU is better insulated due to their heavily contracted position and Y/Y improvement in Southern PRB rail performance.”
Thu, Jan. 8, 2:33 PM
- It’s time for investors to start looking for entry points in quality coal miners such as Consol Energy (CNX +1.5%), Cloud Peak Energy (CLD +4.1%) and Peabody Energy (BTU -0.2%), J.P. Morgan says in the hope that funding problems now confronting the U.S. shale revolution will lead to a more balanced U.S. gas market and better prospects for coal.
- While the seaborne market is lackluster, JPM believes it sees a positive story emerging for the U.S. coal industry due to the changing landscape in U.S. E&P driven by falling oil prices, which should lead to a tighter natural gas market in late 2015 and beyond and spark positive movement in depressed coal names.
Dec. 22, 2014, 10:45 AM
- Natural gas prices fall 9.5% to near two-year lows at $3.133/mmBtu, in the biggest one-day percentage loss since February and the lowest intraday price since January 2013, on mild weather forecasts and inventory that is above year-ago levels.
- Prices are now down more than 15% in three straight losing sessions and are 30% lower than the six-month high closing price of $4.489/mmBtu it hit just a month ago.
- Weather has been unseasonably warm for December, limiting demand for home heating and allowing relatively low stockpiles to catch up to where they were a year ago and encouraging traders to sell based on the belief that supply is relatively healthy.
- Gas producers are among the biggest early decliners: XOM -1.1%, CHK -7.3%, APC -2.6%, SWN -6%, DVN -2.2%, COP -2.3%, BP -1.5%, COG -4%, BHP -1.9%, CVX -1.3%, ECA -5.1%, EQT -4.3%, RDS.A -1.7%, UPL -12%, WPX -6.9%, EOG -1%, OXY -1.1%, RRC -6.1%, APA -2.3%, AR -3.2%, CNX -3%, QEP -4.8%, LINE -4.9%, NBL -1.6%, SM -2.6%, XEC -4.2%, PXD -2.9%, NFX -5.1%.
- ETFs: UNG, DGAZ, UGAZ, BOIL, GAZ, FCG, GASL, KOLD, UNL, NAGS, DCNG
Dec. 17, 2014, 12:26 PM
- FBR Capital chooses Noble Energy (NBL +8.8%), Schlumberger (SLB +4.6%), Synergy Resources (SYRG +6%), Consol Energy (CNX +3.4%) and SunEdison (SUNE +0.7%) as its top energy and natural resources stocks for 2015.
- FBR likes NBL's strong combination of shale assets that are still immature in their adoption and application of technology, which is scalable; a strong balance sheet; and a portfolio that offers abundant exploration risk/reward potential.
- SLB is FBR's favorite energy stock among those whose secular earnings power is clearly the most likely to significantly expand over the next five years and/or is underestimated at current market multiples.
- SYRG offers investors exposure to industry-leading production growth and a solid balance sheet, a unique combination for a small-cap equity, the firm says.
Dec. 11, 2014, 11:19 AM
- Consol Energy (CNX +2.3%) is higher after announcing late yesterday that it is preparing to spin off some of its coal operations, creating an MLP for its thermal coal business and approving a $250M stock buyback.
- Sterne Agee says it would add to or introduce positions, citing CNX’s strong relative cash flow generation, overcapitalized balance sheet, and expected continued execution within its unconventional gas assets as allowing for valuation support and expansion.
- FBR Capital believes the thermal coal MLP could potentially provide a material uplift of $3-$9 per share by pulling forward the value of the coal assets and providing growth capex for CNX's E&P business (Briefing.com).
- Citigroup’s Brian Yu, however, does not see how the MLP creates value for CNX; given the lack of growth in CNX’s coal assets, Yu thinks it would be tough to trade at the same valuation as Alliance Resource Partners (NASDAQ:ARLP) or Alliance Holdings (NASDAQ:AHGP).
Dec. 10, 2014, 4:43 PM
- Consol Energy (NYSE:CNX) +3% AH after saying it plans to pursue the formation of an MLP for its thermal coal business to own interests in certain properties and related mining operations located in Pennsylvania, including its Bailey Mine, Enlow Fork Mine, Harvey Mine and the related preparation plant.
- CNX says it would own the general partner of the MLP, any incentive distribution rights and a majority of the limited partner interests of the MLP; it expects to commence an IPO in mid-2015.
- CNX also plans to pursue the formation of a subsidiary entity for the purpose of owning its metallurgical coal properties and related mining operations, with a view to conducting an IPO of up to 20% of the subsidiary's equity in H2 2015.
- Says its board has approved a two-year share repurchase program of up to $250M.
Dec. 2, 2014, 3:35 PM
- Walter Energy (WLT -29.2%) sells off nearly 30% following a note from BB&T Capital predicting the coal company would fall into bankruptcy in 2015.
- BB&T thinks WLT has enough cash to get through 2015 at the current met coal price of $119/metric ton, but believes WLT's board "will reach the conclusion before that point that the met market won't improve enough over the next couple of years to save the company from needing to restructure."
- Most other coal names also are lower: ANR -2.3%, ACI -1.9%, CLD -3.1%, CLF -2.2%, CNX -0.7%, BTU +0.6%.
Dec. 1, 2014, 3:57 PM
- Consol Energy (CNX -3.9%) is downgraded to Neutral from Buy with a $41 price target at Citi after the firm incorporates its new commodity price forecasts, which lowers its EPS estimates for CNX to $0.93 from $0.98 for 2014 and to $0.67 from $0.77 for 2015.
- Citi models free cash flow of -$310M in 2014, -$15M in 2015 and $54M in 2016, with the negative near-term estimates driven by the high levels of capex needed to achieve the company's 30% natural gas volume growth targets for 2015 and 2016.
Nov. 28, 2014, 10:25 AM
- OPEC's Thursday decision to keep oil production unchanged has sparked a commodity stock rout, one that hasn't left coal stocks unscathed.
- Major decliners: BTU -6%. ACI -6.6%. ANR -6.2%. CLD -4.3%. CNX -2.8%. NRP -3.5%. ARLP -3%. CLF -3.6%.
- Thermal coal prices have already fallen sharply this year.
- ETF: KOL
Nov. 14, 2014, 2:39 PM
- Thermal coal and coal stocks are rallying after Glencore (OTCPK:GLCNF, OTCPK:GLNCY) said it would halt production at its Australian mines for three weeks to try to tackle a global supply glut.
- Deutsche Bank says the move is an important signal from the world’s largest producer of seaborne thermal coal: “Taking 5M tonnes out of the 1.1B [a year] seaborne market is a relatively small starting point, but may mark the start of more to come."
- But other analysts say it is no sure thing that Glencore’s move would be copied by others or lead to permanent mine closures; unlike some rivals, Glencore has less exposure to "take or pay” contacts which oblige miners to pay charges of up to $25/metric ton to use rail and port.
- ACI +10.7%, ANR +10.1%, WLT +5.2%, BTU +4.3%, CLF +3.2%, CLD +2%, CNX +1.9%.
- ETF: KOL
Nov. 6, 2014, 3:35 PM
- “The fundamental case for coal is strengthening but requires several years of patience," and coal miners (NYSEARCA:KOL) still pose too much short-term risk for investors, J.P. Morgan analyst John Bridges says.
- The coal sector is "very much a weather trade" which is sensitive to this winter’s temperatures, Bridges says, "consequently, without another particularly cold winter or a direct cyclonic hit on Australia’s coking coal mines, coal prices and thus the coal equities are likely to remain volatile through the 2014-15 winter."
- In the sector, Bridges recommends Consol Energy (CNX +0.6%), Alliance Resource Partners (ARLP -0.4%) and Foresight Energy (FELP +1.7%), as only high-yielding coal MLPs are resonating with investors.
- Most big coal names are adding to yesterday's gains, as the IEA predicts world coal demand to grow 2.3% in 2015, mostly undaunted by stricter clean air regulations and competition from cheap natural gas: ANR +5.1%, ACI +4.7%, BTU +0.5%, WLT -1.1%, CLD +0.9%.
Nov. 5, 2014, 12:24 PM
- Coal stocks (NYSEARCA:KOL) are rallying in the hope that the new balance of power in D.C. can at least halt what the companies view as an attack on their livelihood.
- Strategas' Daniel Clifton thinks there’s a good chance the new Congress will “slow down EPA rules on coal” which have limited its use by utilities, and any approval for the Keystone XL pipeline would mean more rail transport for coal, a problem Peabody Energy (BTU +4.4%) has said was limiting its coal sales.
- ANR +5.8%, CNX +3%, WLT +6.3%, CLD +4.5%, ACI -0.2%.
Oct. 28, 2014, 12:27 PM
- The anticipated short squeeze is on after Cliffs Natural Resources (CLF +16.9%) beat Q3 earnings expectations,
- Stifel analysts think CLF is making progres but worry about its Bloom Lake project; CLF was able to show better than expected cost controls across all reported segments in Q3, but a concern is the rail take-or-pay contract which would require even bigger cash payouts in 2015 if Phase 1 at Bloom Lake is shutdown.
- Other coal producers are posting sharp gains today: ANR +4.9%, BTU +3.2%, WLT +8.3%, ACI +8.4%, CNX +4.1%, CLD +5.3%, WLB +4.8%.
Oct. 28, 2014, 11:48 AM
- Consol Energy (CNX +2.5%) is on the rise after the company's earnings conference call, which included comments on opportunities for alternate structures for its assets, including the potential for an MLP.
- CNX sees the possibility for a thermal coal MLP over the longer term, while on the met coal side, the company is looking at "various structures" that capitalize on the potential rebound in the market, its low cost position and its strong management team.
- Earlier: Consol narrows loss with record gas production.
Oct. 28, 2014, 8:23 AM
- Consol Energy (NYSE:CNX) +2.2% premarket despite missing estimates for Q3 earnings and revenues, but record natural gas production in the Marcellus and Utica shales helped narrow its losses.
- A 41% increase in gas production to 64.9B cfe during Q3 lifted total revenue to $884M, up 10% Y/Y; because well results are exceeding expectations, CNX raises its 2014 E&P production guidance range to 235B-240B cfe from earlier guidance of 225B-235B cfe.
- CNX's coal division produced 7.8M tons, exceeding guidance of 7.3M-7.7M tons; Q3 ended with 19.8M tons of thermal coal contracted for 2015, up from 15.6M tons reported at the end of Q2.
- CNX's average margin per ton of low-volume coal sold was cut in half to $9.21 from a year earlier, and the average margin per ton of thermal coal fell nearly 30% to $12.47.
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