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Stock has been taking a pounding for months now... might have something to do with Murray's health?

I read on Picasso's twitter that he needs lung transplant, this makes the whole taking FELP private scenario a lot less likely.

 

What is Picasso's Twitter handle?

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Isn't Robert's son also an executive of FELP? Thought I read his name last year when I was researching the stock.

 

All three sons work there per this article:

 

https://www.nytimes.com/2016/05/01/business/energy-environment/a-crusader-in-the-coal-mine-taking-on-president-obama.html

 

I don't see how Robert's health would change the overall picture. I would assume Robert has his sons set up to take over.

 

The stock pressure is likely bond holders liquidating the shares they were given.

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Stock has been taking a pounding for months now... might have something to do with Murray's health?

I read on Picasso's twitter that he needs lung transplant, this makes the whole taking FELP private scenario a lot less likely.

 

What is Picasso's Twitter handle?

wachtwoord,

 

@YoloCapMgt .

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Wow I missed the real action. It dropped down to $3.90 but then the big orders came in and the price rallied. 258K vol today vs 42K average.

 

Hypothetically, if all the bondholders needed to sell the shares they were given, it could take 5-6 months at average volumes. And then there's possible pressure if Accipiter needs to liquidate more. FELP is about all Accipiter has left. Quite the blowup.

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Isn't Robert's son also an executive of FELP? Thought I read his name last year when I was researching the stock.

 

All three sons work there per this article:

 

https://www.nytimes.com/2016/05/01/business/energy-environment/a-crusader-in-the-coal-mine-taking-on-president-obama.html

 

I don't see how Robert's health would change the overall picture. I would assume Robert has his sons set up to take over.

 

The stock pressure is likely bond holders liquidating the shares they were given.

 

If the end goal is to privatize FELP, there is no better time than this year provided Murray can arrange financing. Bondholders are selling indiscriminately , Deer run mine is still closed and stock price is reflecting these head winds. Wasn't there a provision where they can take over the company by offering the last 90 day average price?

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  • 3 weeks later...

 

Deer Run Mine update:

 

"Coal Mine Update/Approval: Young stated that he has heard the Coal Mine workers are testing the air quality and equipment at the mine site."

 

http://www.montgomeryco.com/images/docs/cbminutes/2017/6-13-17.pdf

 

Looks like they got in the mine and testing the equipment.

 

Hope we can have some good news soon. The stock has been beaten up badly lately.

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  • 3 weeks later...

Has everyone been reading the calls from SXCP, ARLP, and CNXC? It was mentioned on SXCPs call that one of their two customers (I think/hope its Murray not FELP) had trouble with CSX and that's why thermal export volumes were down at CMT.

 

Lots of talk on API2 prices getting a nice boost lately.. front month is currently $82 and 1 year out is $73. CNXC was able to secure some contracts in 2019 and 2021, which I guess is a good sign. They mentioned domestic coal stocks are about at the level of the 2014 polar vortex.

 

Anyway, here's to hoping:

 

1) There are questions on the call

2) Hillsboro update is positive

3) Clear progress shown on the distribution and delevering front 

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https://www.theet.com/statejournal/murray-energy-sues-csx-over-service-issues/article_f8dc086f-5e8f-5c45-9355-de482500d850.html

 

Murray Energy has taken its dispute with CSX Transportation to court, saying the railroad’s inability to run trains as scheduled has cost it money and lost business opportunities.

 

Murray said Tuesday, Aug. 1, that it had filed two separate suits against CSX.

 

Murray’s complaints against CSX go back to 2015, meaning they occurred before CSX began its Precision Scheduled Railroading program earlier this year. That program has been widely criticized by CSX’s customers and brought an intervention by the federal Surface Transportation Board.

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https://finance.yahoo.com/news/foresight-energy-lp-reports-second-103000376.html

 

Cash from operations $38.5 million. Capital expenditures $21.7 million. Restoring a quarterly cash distribution of $0.0647 per common unit.

 

The quarterly dividend partial-restoration was a nice surprise. Now they need to get their transportation figured out and we'll be in nice shape.

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If I read it correctly, they produced 16% more tons of coal yet revenue is down 8%, compared to the same quarter in 2016. The average selling price of coal must be pretty bad. They said "The reduction in coal sales realizations of $2.01 per ton was principally driven by customer mix relative to the prior year quarter as well as the rolling off of certain legacy sales contracts with more favorable pricing." But I feel it must be more than $2 per ton, because they sold 5.7 million of tons of coal, but revenue is down $19.6MM.  What am I missing?

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If I read it correctly, they produced 16% more tons of coal yet revenue is down 8%, compared to the same quarter in 2016. The average selling price of coal must be pretty bad. They said "The reduction in coal sales realizations of $2.01 per ton was principally driven by customer mix relative to the prior year quarter as well as the rolling off of certain legacy sales contracts with more favorable pricing." But I feel it must be more than $2 per ton, because they sold 5.7 million of tons of coal, but revenue is down $19.6MM.  What am I missing?

 

I saw that too. Could it be related to the big inventory swing? They also posted 9 million less of transportation expenses. Maybe someone with a better grasp can comment, but my laymen answer to myself was they produced the coal, but could not book the revenue yet.

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If I read it correctly, they produced 16% more tons of coal yet revenue is down 8%, compared to the same quarter in 2016. The average selling price of coal must be pretty bad. They said "The reduction in coal sales realizations of $2.01 per ton was principally driven by customer mix relative to the prior year quarter as well as the rolling off of certain legacy sales contracts with more favorable pricing." But I feel it must be more than $2 per ton, because they sold 5.7 million of tons of coal, but revenue is down $19.6MM.  What am I missing?

 

I saw that too. Could it be related to the big inventory swing? They also posted 9 million less of transportation expenses. Maybe someone with a better grasp can comment, but my laymen answer to myself was they produced the coal, but could not book the revenue yet.

 

Right on that one. Go the end of the release and look at tons sold and tons produced. Netbacks are down slightly which is offset by lower cost. It is all in delta between tons sold and tons produced. In short they have 16.5 million in adjusted ebitda that went to investory. Now if they had sold the 5.6 million ton they produced then the cost would have been lower because it is cash cost of tons produced divided by ton sold. 

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If I read it correctly, they produced 16% more tons of coal yet revenue is down 8%, compared to the same quarter in 2016. The average selling price of coal must be pretty bad. They said "The reduction in coal sales realizations of $2.01 per ton was principally driven by customer mix relative to the prior year quarter as well as the rolling off of certain legacy sales contracts with more favorable pricing." But I feel it must be more than $2 per ton, because they sold 5.7 million of tons of coal, but revenue is down $19.6MM.  What am I missing?

 

I saw that too. Could it be related to the big inventory swing? They also posted 9 million less of transportation expenses. Maybe someone with a better grasp can comment, but my laymen answer to myself was they produced the coal, but could not book the revenue yet.

 

Right on that one. Go the end of the release and look at tons sold and tons produced. Netbacks are down slightly which is offset by lower cost. It is all in delta between tons sold and tons produced. In short they have 16.5 million in adjusted ebitda that went to investory. Now if they had sold the 5.6 million ton they produced then the cost would have been lower because it is cash cost of tons produced divided by ton sold.

 

thanks, I should have looked in more details.

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If I read it correctly, they produced 16% more tons of coal yet revenue is down 8%, compared to the same quarter in 2016. The average selling price of coal must be pretty bad. They said "The reduction in coal sales realizations of $2.01 per ton was principally driven by customer mix relative to the prior year quarter as well as the rolling off of certain legacy sales contracts with more favorable pricing." But I feel it must be more than $2 per ton, because they sold 5.7 million of tons of coal, but revenue is down $19.6MM.  What am I missing?

 

I saw that too. Could it be related to the big inventory swing? They also posted 9 million less of transportation expenses. Maybe someone with a better grasp can comment, but my laymen answer to myself was they produced the coal, but could not book the revenue yet.

 

Right on that one. Go the end of the release and look at tons sold and tons produced. Netbacks are down slightly which is offset by lower cost. It is all in delta between tons sold and tons produced. In short they have 16.5 million in adjusted ebitda that went to investory. Now if they had sold the 5.6 million ton they produced then the cost would have been lower because it is cash cost of tons produced divided by ton sold.

 

thanks, I should have looked in more details.

 

At a cash cost of $20 that delta between tons sold and produced should be about $16.5 million. On the call they discussed that the excess supply was for export. So the next quarter or two should get a boost of 16.5 million.

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WTF is wrong with Murray and that dour attitude? Seems like he is trying too hard to bring down the prices so he can buy this cheap. FELP did much better than the other producers especially the cash costs/ton, committed almost 50% for '18 and has built export inventory for the latter half. And this guy wouldn't give any color on Hillsboro, wouldn't talk about buying up warrants from the excess cash and wouldn't discuss MLP conversion.

 

And I am not clear about arrearages either. He said its about $150m. Will that be shared by 66m unit holders or 76m?

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I thought Moore's tone was fair. I was pleased with his open  and candid answers. It's understandable with the ongoing insurance stuff that he needs to be tight lipped about Hillsboro and his MLP structure answer made sense. it  was an interesting cast of characters on the call. Seemed like a few hedgies and our very  own Picasso even got a question in. Does Ares  own some FELP or Murray debt? I can't see any other reason why they'd be on the call...

 

I hope Moore was mistaken when he said current API 2 pricing translates to mine netbacks of  $28-33. I hope he meant net margins because if that is mine netbacks then sulfur discounts and transit costs have gone up considerably, and net margins are terrible on exports.

 

Nice that costs came down. All and all neither good or bad I guess

 

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