PDER - Pardee Resources

[frommi]

Q4 out, haven't thought much about it yet. @160 it's still real cheap if you believe timber is worth +$100m. Will probably buy and forget some after raising a little more cash from some sales.

 

Can you upload the report or provide a link? I am a shareholder since some time now, but i get no reports at IB from PDER. Or am i looking at the wrong place?

[60North Investments]

Q4 out, haven't thought much about it yet. @160 it's still real cheap if you believe timber is worth +$100m. Will probably buy and forget some after raising a little more cash from some sales.

 

Can you upload the report or provide a link? I am a shareholder since some time now, but i get no reports at IB from PDER. Or am i looking at the wrong place?

 

You should email (through the contact us page for example) them about it and they'll add you to the mailing list after you somehow show proof that you own shares. I've attached the Q4 report. 

2015_4th_QuarterReport.pdf

[frommi]

You should email (through the contact us page for example) them about it and they'll add you to the mailing list after you somehow show proof that you own shares. I've attached the Q4 report.

 

Thanks a lot!

[TwoCitiesCapital]

PHILADELPHIA, May 17, 2016 /PRNewswire/ -- Pardee Resources Company (OTC: PDER) (the "Company") reports that its subsidiary, Pardee Agricultural Properties LLC, recently acquired an interest in a partnership that leases a 220 acre farmland tract located in Kern County, at the southern end of California's Central Valley. The tract will be developed and managed for premium table grapes by a local, multi-generational agricultural operating company. The Company has committed $3.7 million for the acquisition and development of this property. "We are excited to build out our agricultural platform with this second acquisition which further diversifies our land business," said Carleton P. Erdman, President and Chief Executive Officer.

 

More grape/farmland acquisitions.

[Spekulatius]

PHILADELPHIA, May 17, 2016 /PRNewswire/ -- Pardee Resources Company (OTC: PDER) (the "Company") reports that its subsidiary, Pardee Agricultural Properties LLC, recently acquired an interest in a partnership that leases a 220 acre farmland tract located in Kern County, at the southern end of California's Central Valley. The tract will be developed and managed for premium table grapes by a local, multi-generational agricultural operating company. The Company has committed $3.7 million for the acquisition and development of this property. "We are excited to build out our agricultural platform with this second acquisition which further diversifies our land business," said Carleton P. Erdman, President and Chief Executive Officer.

 

More grape/farmland acquisitions.

 

Premium grapes don't grow in Kern County....

[writser]

I don't understand anyway why they start to buy expensive grape tracts during the biggest commodity bust of the past few decades. Shouldn't there be better opportunities?

[wachtwoord]

I don't understand anyway why they start to buy expensive grape tracts during the biggest commodity bust of the past few decades. Shouldn't there be better opportunities?

 

Me too, the coal investments turned out great.

 

On the other hand these are just cheap table grapes.

[oddballstocks]

PHILADELPHIA, May 17, 2016 /PRNewswire/ -- Pardee Resources Company (OTC: PDER) (the "Company") reports that its subsidiary, Pardee Agricultural Properties LLC, recently acquired an interest in a partnership that leases a 220 acre farmland tract located in Kern County, at the southern end of California's Central Valley. The tract will be developed and managed for premium table grapes by a local, multi-generational agricultural operating company. The Company has committed $3.7 million for the acquisition and development of this property. "We are excited to build out our agricultural platform with this second acquisition which further diversifies our land business," said Carleton P. Erdman, President and Chief Executive Officer.

 

More grape/farmland acquisitions.

 

Premium grapes don't grow in Kern County....

 

Good'ol bulk grapes.  We'll be drinking Pardee product without knowing it soon enough, blended into thousands of types of wine.

 

I do wonder why they're not buying.  I was out in rural PA yesterday and came across a few hundred acres of coal mineral interests for pennies on the dollar.  Was contemplating with the friend I was out there with whether this would be a value-trap that we'd never get money out of, or buying at the low.

[TwoCitiesCapital]

PHILADELPHIA, May 17, 2016 /PRNewswire/ -- Pardee Resources Company (OTC: PDER) (the "Company") reports that its subsidiary, Pardee Agricultural Properties LLC, recently acquired an interest in a partnership that leases a 220 acre farmland tract located in Kern County, at the southern end of California's Central Valley. The tract will be developed and managed for premium table grapes by a local, multi-generational agricultural operating company. The Company has committed $3.7 million for the acquisition and development of this property. "We are excited to build out our agricultural platform with this second acquisition which further diversifies our land business," said Carleton P. Erdman, President and Chief Executive Officer.

 

More grape/farmland acquisitions.

 

Premium grapes don't grow in Kern County....

 

Good'ol bulk grapes.  We'll be drinking Pardee product without knowing it soon enough, blended into thousands of types of wine.

 

I do wonder why they're not buying.  I was out in rural PA yesterday and came across a few hundred acres of coal mineral interests for pennies on the dollar.  Was contemplating with the friend I was out there with whether this would be a value-trap that we'd never get money out of, or buying at the low.

 

To be fair, this isn't the only transactions they've made. They've been increasing their timber allocations and have also been putting money to work in solar projects so it's not exactly like they're sitting idle and only investing in grapes.

 

TBH, I know nothing about the grape or agricultural business so I'm a little uncomfortable just because they don't seem to be very experienced here either. I'll reserve my judgment until the results are clear.

[awindenberger]

PHILADELPHIA, May 17, 2016 /PRNewswire/ -- Pardee Resources Company (OTC: PDER) (the "Company") reports that its subsidiary, Pardee Agricultural Properties LLC, recently acquired an interest in a partnership that leases a 220 acre farmland tract located in Kern County, at the southern end of California's Central Valley. The tract will be developed and managed for premium table grapes by a local, multi-generational agricultural operating company. The Company has committed $3.7 million for the acquisition and development of this property. "We are excited to build out our agricultural platform with this second acquisition which further diversifies our land business," said Carleton P. Erdman, President and Chief Executive Officer.

 

More grape/farmland acquisitions.

 

Premium grapes don't grow in Kern County....

 

Good'ol bulk grapes.  We'll be drinking Pardee product without knowing it soon enough, blended into thousands of types of wine.

 

I do wonder why they're not buying.  I was out in rural PA yesterday and came across a few hundred acres of coal mineral interests for pennies on the dollar.  Was contemplating with the friend I was out there with whether this would be a value-trap that we'd never get money out of, or buying at the low.

 

Unless you can get it into production over the next few years, its a value trap.

 

Renewable energy (Solar and Wind) gets 5-10% cheaper every year, and is already on par with coal on price alone in good places. The issue is storage, given that both are intermittent. Storage is too expensive today, but is also coming down in price at a 5-10% annual clip.

 

I expect total US electricity usage to grow more quickly over the next decade than it has thanks to electric cars, which will require more coal in the short to medium term, but long term renewables will replace coal and even nat gas.

 

Don't believe me? Here in Iowa we generate over 25% of our electricity from wind. New wind plants are being put in with PPAs in the 2.5-3cent range. Utility solar projects can now be built for less than $1.50/W. Storage really is the main reason it doesn't make sense to replace all fossil fuel electricity generation today.

[oddballstocks]

PHILADELPHIA, May 17, 2016 /PRNewswire/ -- Pardee Resources Company (OTC: PDER) (the "Company") reports that its subsidiary, Pardee Agricultural Properties LLC, recently acquired an interest in a partnership that leases a 220 acre farmland tract located in Kern County, at the southern end of California's Central Valley. The tract will be developed and managed for premium table grapes by a local, multi-generational agricultural operating company. The Company has committed $3.7 million for the acquisition and development of this property. "We are excited to build out our agricultural platform with this second acquisition which further diversifies our land business," said Carleton P. Erdman, President and Chief Executive Officer.

 

More grape/farmland acquisitions.

 

Premium grapes don't grow in Kern County....

 

Good'ol bulk grapes.  We'll be drinking Pardee product without knowing it soon enough, blended into thousands of types of wine.

 

I do wonder why they're not buying.  I was out in rural PA yesterday and came across a few hundred acres of coal mineral interests for pennies on the dollar.  Was contemplating with the friend I was out there with whether this would be a value-trap that we'd never get money out of, or buying at the low.

 

Unless you can get it into production over the next few years, its a value trap.

 

Renewable energy (Solar and Wind) gets 5-10% cheaper every year, and is already on par with coal on price alone in good places. The issue is storage, given that both are intermittent. Storage is too expensive today, but is also coming down in price at a 5-10% annual clip.

 

I expect total US electricity usage to grow more quickly over the next decade than it has thanks to electric cars, which will require more coal in the short to medium term, but long term renewables will replace coal and even nat gas.

 

Don't believe me? Here in Iowa we generate over 25% of our electricity from wind. New wind plants are being put in with PPAs in the 2.5-3cent range. Utility solar projects can now be built for less than $1.50/W. Storage really is the main reason it doesn't make sense to replace all fossil fuel electricity generation today.

 

Right, I guess the question is coal completely done?  Is oil done?  With green everything part of me agrees with that.  Wind makes sense in Iowa where it's flat, windy, and empty but what about areas that are built up, or where there isn't a constant wind?  I know solar is perfect in the west where it's sunny all the time.  I guess the question is will the grid be rewired so that the western solar and midwest wind will power the Northeast?

 

At the bottom of every market looking forward it always looks like nothing will ever come back.  And sometimes that's true.  Some industries crash and die forever.  But other times there's a rebound.  I have no idea where we're at, is green hyped, or has it already replaced coal/natural gas?  I know where I'm at I'm happy to have cheap gas, I have a gas pool heater.  Electric and solar are outrageously expensive and doesn't warm as well.  The question is what cycle are we in?

[wachtwoord]

Renewables are only economically viable due to government subsidies. We've been in a large period of government  spending and government growth. When that trend reverses investment in renewable will collapse (as it's basically burning money without subsidies).

[CorpRaider]

Would rather buy SHLD. 

[Jurgis]

Would rather buy SHLD.

 

??

[CorpRaider]

Sorry meant to (with apparently failed humor) qualify my dislike for the business prospects for coal mines.  A commodity business competing with its higher negative impact on air quality, costs to extract (compared with something that is actually an almost inadvertent by product of drilling for a higher value hydrocarbon) deep in the Saudi of natural gas with air regs directly, thankfully, targeting and even the Chinese are coughing it up.  But you know that's not a variant perception so if you can carry it long enough, who knows.  I'd rather bet on Eddie giving up tilting at the AMZN windmill.

[Jurgis]

Sorry meant to (with apparently failed humor) qualify my dislike for the business prospects.  Higher impact on air quality, cost to extract (compared with something that is actually an almost inadvertent by product of drilling for a higher value hydrocarbon) deep in the Saudi of natural gas with air regs directly targeting and even the Chinese are coughing up the junk.  But you know that's not a variant perception so if you can carry it long enough who knows.  I'd rather bet on Eddie giving up tilting and the AMZN windmill (or even better a better than horrible third business).

 

I see. You mean coal business prospects, I assume. Since PDER is currently (much) more than coal.

 

OK, thanks.

[wachtwoord]

I tend to like what the rest of the market hates. Low hurdles are way easier to jump across. PDER did amazing on thrir coal investments the last couple of years.

 

I think Tesla is one of the worst investments in the market

[KJP]

Sorry meant to (with apparently failed humor) qualify my dislike for the business prospects for coal mines.  A commodity business competing with its higher negative impact on air quality, costs to extract (compared with something that is actually an almost inadvertent by product of drilling for a higher value hydrocarbon) deep in the Saudi of natural gas with air regs directly, thankfully, targeting and even the Chinese are coughing it up.  But you know that's not a variant perception so if you can carry it long enough, who knows.  I'd rather bet on Eddie giving up tilting at the AMZN windmill.

 

You nailed the issue, but it works both ways.  Power plants will be using coal for decades, so the company with the lowest cash cost to extract and ship that coal should still make money on a operating basis.  Whether such a company is actually available in the public markets with a capital structure that makes sense is a different question.  You can look in the FELP thread for an argument that FELP is such a company if it can resolve its current default issues.

[60North Investments]

I tend to like what the rest of the market hates. Low hurdles are way easier to jump across. PDER did amazing on thrir coal investments the last couple of years.

 

 

Just to bring in some balance, they probably did not-so-amazing on for example on their $60m O&G investments in December 2013. Still, if you value timber above $100m and O&G at least @ book value, then it does look attractive. It's an interesting company to watch and see how it behaves as majority of the value is in timber.

[TwoCitiesCapital]

I tend to like what the rest of the market hates. Low hurdles are way easier to jump across. PDER did amazing on thrir coal investments the last couple of years.

 

 

Just to bring in some balance, they probably did not-so-amazing on for example on their $60m O&G investments in December 2013. Still, if you value timber above $100m and O&G at least @ book value, then it does look attractive. It's an interesting company to watch and see how it behaves as majority of the value is in timber.

 

This is kind of how I look at it. Have been wanting to invest in timber directly with a friend of mine and then oil/gas tanked and coal sputtered and  PDER became a cheap play on the timber with other assets as a call options on future cash flow. Also, as a passive investment, it doesn't require me to do anything other than sit on my butt which is more than I can say for buying timberland directly. It's my guess that I'm getting a better deal than betting on timber directly as well.

 

It's currently a 3% positions for me, but wouldn't mind building it to 5-7% if prices remain around here and (hopefully) lower.

 

 

[writser]

Agreed. I view it as buying as buying land, timber & solar assets around fair value with free upside in the fossil fuel segments. The timber alone is worth over $250 / share. It's one of my larger positions (~5%).

[grym02]

My understanding is that these land purchases are for "premium table grapes" i.e. grapes you eat, and are not associated with wine.

 

Anyone attending the PDER annual meeting tomorrow in Philadelphia? Would be great to get mgmt's take on a few questions:

 

- What kind of grape varietals are being planted? What is the expected yield per acre planted?

- How does management view the expected IRR on these agricultural investments vs. the other options? i.e. is this more like timber or coal/O&G?

- What kind of valuations are they seeing in the coal space for comp transactions? Either on a per ton of reserves or price / annual mined tons?

- What is breakeven cost for a typical PDER's lessee?

- How do minimum volume payments work in coal? How much of revenue is guaranteed per year under existing leases?

- What is anticipated O&G revenue at $2.50 gas? $3? $4? i.e. how much leverage and when it will be achieving 10%+ after-tax IRRs?

 

If anyone is there, would be great for any reports on major takeaways or impressions of mgmt.

 

 

[ScottHall]

I normally would go, but as I'm no longer in the region and an interesting opportunity came up out here, I'm not attending this year for the first time in four years.

[writser]

 

Unless you can get it into production over the next few years, its a value trap.

 

Renewable energy (Solar and Wind) gets 5-10% cheaper every year, and is already on par with coal on price alone in good places. The issue is storage, given that both are intermittent. Storage is too expensive today, but is also coming down in price at a 5-10% annual clip.

 

I expect total US electricity usage to grow more quickly over the next decade than it has thanks to electric cars, which will require more coal in the short to medium term, but long term renewables will replace coal and even nat gas.

 

Don't believe me? Here in Iowa we generate over 25% of our electricity from wind. New wind plants are being put in with PPAs in the 2.5-3cent range. Utility solar projects can now be built for less than $1.50/W. Storage really is the main reason it doesn't make sense to replace all fossil fuel electricity generation today.

 

Even if what you say is true (and I have my doubts about that, read for example Energy Transitions by Vaclav Smil, a Bill Gates favorite), we still need coal to make steel (e.g. to build windmills), to produce cement, to make carbon fiber, aluminium, fertilizers, soap, plastics, you name it. Demand might crater by a factor 10 in the long run but smart investments could still be profitable. Also, coal is not the only option for Pardee, they could also try to expand in the oil / gas / business.

 

My gut tells me I'd rather have them sit on cash or deploy money in sectors they have been operating in for decades rather than move sideways into the premium table grape business during a commodities crisis. That said, the amounts invested so far are small - we'll see how it works out. Would be great if someone attended the AGM and asked a few questions about this.

[awindenberger]

writser,

 

I completely agree with you; coal will still be needed for industrial applications. It simply won't be needed for energy generation anymore.

 

I wasnt suggesting that Pardee itself is a value trap, but rather that the purchase of land by the poster I was responding to for coal rights might be.