tag:blogger.com,1999:blog-4815867514277794362.post1102370872100200754..comments2024-03-08T06:18:28.125+11:00Comments on Bronte Capital: Alliance Resources vs Patriot CoalJohn Hemptonhttp://www.blogger.com/profile/03766274392122783128noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-4815867514277794362.post-23829096965326079562013-03-21T23:49:01.032+11:002013-03-21T23:49:01.032+11:00From the 4Q11 CC: "ARLP also has a number of ...From the 4Q11 CC: "ARLP also has a number of significant maintenance projects scheduled for 2012 including transitions into new reserve areas at Dotiki, MC Mining and Mountain View, and completion of a new coal preparation plant currently under construction at our Dotiki mining complex..."<br /><br />...So one of the big reasons maintenance capex was supposed to be up in 2012 was mine development costs, but capitalized mine development costs declined declined $41.2 million to $32.6mn?? Doesn't seem right.<br /><br />Also, quickly looking at the 09 vs. 12 10K, it seems that while their machines appear to be increasingly brittle, managements assumptions about their useful lives seem to be getting increasingly more optimistic. Not that anyone looks below EBITDA anymore, anyways...Timnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-71532419733482632692013-03-21T12:52:03.532+11:002013-03-21T12:52:03.532+11:00Couple things from this and earlier posts:
1. Re: ...Couple things from this and earlier posts:<br />1. Re: coal quality and worker productivity - I think it relates to growth in ILB vs. CAPP region. ILB has lower quality coal, but its in demand. ILB also has more longwalls, which are more employee intensive. <br />2. The increase in maintenance capex per ton relative to opex per ton stretches the bounds of credibility.<br />3. I always thought distributable cash flow (DCF) was the metric MLP investors watched, but ARLP touted its EBITDA in the headline of its 4Q results, so it clearly is a key account worth 'gaming.'<br />4. The DCF they report in their press releases uses an "estimated" maintenance capex number that was $90 million below the number in the 10K. Actual DCF available to LPs was a lot closer to the amount they distributed than it initially appears. Not good for investors lookign for distribution growth. <br />5. Keep up the great work!Timnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-48093129916135964942013-03-21T08:54:04.839+11:002013-03-21T08:54:04.839+11:00I think you should give up your fruitless attacks ...I think you should give up your fruitless attacks on MLPs and concentrate on something you understand.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-78645147614918817612013-03-20T23:49:27.260+11:002013-03-20T23:49:27.260+11:00Enjoying your analysis, but I would be careful wit...Enjoying your analysis, but I would be careful with using the words "better" to describe CAPP coal.<br /><br />A few unique issues with the US coal market: <br /><br />(1) met coal has had a few (very) bad years with a lot of it being sold as "crossover" coal into the much lower priced thermal market; <br /><br />(2) new regulations have forced pretty much every operating coal plant to install scrubbers -- there has been a real shift back to "dirtier" coal with better heat rates and away from the cleaner PRB coal which is a large part of why the Illinois River Basin coal (where Alliance has operations) has been seeing improved demand recently... better fully loaded costs than CAPP (high extraction/transportation) or PRB (high transportation)Peternoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-81603108882730998002013-03-20T23:44:33.324+11:002013-03-20T23:44:33.324+11:00BTU spun off PCX a couple of years ago wtih lots o...BTU spun off PCX a couple of years ago wtih lots of retirement obligations, hence the reason for the large number in PCX-s case. Recently actually PCX sued BTU regarding this. From a recent article: "The miners protested against what they call a “scheme by executives of Peabody, Arch Coal and Patriot Coal to create Patriot as a subsidiary that was designed to fail, in order to avoid payment of health care obligations to retired miners and surviving spouses.”". So its not suprising to see such big differences in those numbers. To be honest I am not convinced so far about going short ARLP. <br /><br /><br />Keepernoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-66636325894950782692013-03-20T21:26:59.617+11:002013-03-20T21:26:59.617+11:00Peabody Energy hived off all it's unionized mi...Peabody Energy hived off all it's unionized mines into a new entity called Patriot Coal. It was basically a maneuver to rid Peabody of most of its worker's obligations, however irksome it must have been to give up good mines in the process. So what's a good Patriot to do with all these obligations? Well, declare bankruptcy and hope the judge allows them to reduce or even eliminate the obligations. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-67855605142006456652013-03-20T19:06:18.666+11:002013-03-20T19:06:18.666+11:00Kid LNG - are you alleging a WorldCom style capita...Kid LNG - are you alleging a WorldCom style capitalization fraud? <br /><br />Couldn't possibly be the case.<br /><br />Send me an email though.<br /><br />JohnJohn Hemptonhttps://www.blogger.com/profile/03766274392122783128noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-31736323911444538362013-03-20T17:29:36.423+11:002013-03-20T17:29:36.423+11:00A miner obsession indeed!
Coal me simple but is th...A miner obsession indeed!<br />Coal me simple but is this story really more complicated than potential 1) allocating expense to capital expenses and therefore reporting solid EBITDA (2) paying for dividends out of debt issuance (3) weird inter-company transactions?Anonymoushttps://www.blogger.com/profile/00803994667194850890noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-718597505156373862013-03-20T16:02:44.010+11:002013-03-20T16:02:44.010+11:00Dear John,
Have a look at HNRG. I have no positi...Dear John,<br /><br />Have a look at HNRG. I have no position in it, but it is the only semi-significant coal company with little debt in the US.David Merkelhttps://www.blogger.com/profile/05073877918072914309noreply@blogger.com