Author Topic: FELP - Foresight Energy  (Read 234479 times)

gadfly

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Re: FELP - Foresight Energy
« Reply #930 on: December 19, 2017, 05:16:56 PM »


PullTheTrigger

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Re: FELP - Foresight Energy
« Reply #931 on: December 22, 2017, 03:34:54 PM »
Bummer

https://www.sec.gov/Archives/edgar/data/1540729/000156459017025298/felp-8k_20171220.htm

Quote
On December 20, 2017, the Board of Directors of Foresight Energy GP LLC, the general partner of Foresight Energy LP (the “Partnership”), approved the submission of a re-entry plan to the Mine Safety and Health Administration (MSHA) for the Deer Run Mine at the Partnership’s Hillsboro Energy complex.  The re-entry submission contains a plan for the permanent sealing of the current longwall district of the Deer Run Mine immediately upon MSHA’s approval.  At this time, the Partnership is uncertain as to when production will resume at its Deer Run Mine.
 
In connection with the proposed re-entry plan, certain longwall equipment and other related assets will be permanently sealed within or may not be recovered from the Deer Run Mine.  As such, the Partnership expects to record an aggregate impairment charge between $42 million and $67 million in the fourth quarter of 2017.  The impairment charge represents the estimated net book value of the certain longwall equipment and other related assets as of December 2017.

valcont

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Re: FELP - Foresight Energy
« Reply #932 on: December 23, 2017, 07:51:25 AM »
Bummer

https://www.sec.gov/Archives/edgar/data/1540729/000156459017025298/felp-8k_20171220.htm

Quote
On December 20, 2017, the Board of Directors of Foresight Energy GP LLC, the general partner of Foresight Energy LP (the “Partnership”), approved the submission of a re-entry plan to the Mine Safety and Health Administration (MSHA) for the Deer Run Mine at the Partnership’s Hillsboro Energy complex.  The re-entry submission contains a plan for the permanent sealing of the current longwall district of the Deer Run Mine immediately upon MSHA’s approval.  At this time, the Partnership is uncertain as to when production will resume at its Deer Run Mine.
 
In connection with the proposed re-entry plan, certain longwall equipment and other related assets will be permanently sealed within or may not be recovered from the Deer Run Mine.  As such, the Partnership expects to record an aggregate impairment charge between $42 million and $67 million in the fourth quarter of 2017.  The impairment charge represents the estimated net book value of the certain longwall equipment and other related assets as of December 2017.

Well here goes the optionality. And the tax efficiency of holding an MLP is gone with the tax reform. The only saving grace is API2 at $94 and a normal winter in the US midwest.

Do you guys have any idea about the insurance terms? Will there be a payout considering the existing mine is sealed.

gadfly

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Re: FELP - Foresight Energy
« Reply #933 on: December 23, 2017, 01:29:13 PM »
Bummer

https://www.sec.gov/Archives/edgar/data/1540729/000156459017025298/felp-8k_20171220.htm

Quote
On December 20, 2017, the Board of Directors of Foresight Energy GP LLC, the general partner of Foresight Energy LP (the “Partnership”), approved the submission of a re-entry plan to the Mine Safety and Health Administration (MSHA) for the Deer Run Mine at the Partnership’s Hillsboro Energy complex.  The re-entry submission contains a plan for the permanent sealing of the current longwall district of the Deer Run Mine immediately upon MSHA’s approval.  At this time, the Partnership is uncertain as to when production will resume at its Deer Run Mine.
 
In connection with the proposed re-entry plan, certain longwall equipment and other related assets will be permanently sealed within or may not be recovered from the Deer Run Mine.  As such, the Partnership expects to record an aggregate impairment charge between $42 million and $67 million in the fourth quarter of 2017.  The impairment charge represents the estimated net book value of the certain longwall equipment and other related assets as of December 2017.

Well here goes the optionality. And the tax efficiency of holding an MLP is gone with the tax reform. The only saving grace is API2 at $94 and a normal winter in the US midwest.

Do you guys have any idea about the insurance terms? Will there be a payout considering the existing mine is sealed.

I was wondering the same thing about insurance. The filing was a little confusing...is it still posssible the mine will come online? I know it's now a low NPV situation because they have to buy new equipment, but is it possible that they get a huge (I think Moore said $150 mm in equipment would be required) settlement and can be mining again soon? Also, I'm pretty sure insurance payments aren't subject to the cash sweep rules so maybe A large insurance payment could flow through to common holders to eat into  MQD balance...

valcont

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Re: FELP - Foresight Energy
« Reply #934 on: December 24, 2017, 07:06:50 AM »
Bummer

https://www.sec.gov/Archives/edgar/data/1540729/000156459017025298/felp-8k_20171220.htm

Quote
On December 20, 2017, the Board of Directors of Foresight Energy GP LLC, the general partner of Foresight Energy LP (the “Partnership”), approved the submission of a re-entry plan to the Mine Safety and Health Administration (MSHA) for the Deer Run Mine at the Partnership’s Hillsboro Energy complex.  The re-entry submission contains a plan for the permanent sealing of the current longwall district of the Deer Run Mine immediately upon MSHA’s approval.  At this time, the Partnership is uncertain as to when production will resume at its Deer Run Mine.
 
In connection with the proposed re-entry plan, certain longwall equipment and other related assets will be permanently sealed within or may not be recovered from the Deer Run Mine.  As such, the Partnership expects to record an aggregate impairment charge between $42 million and $67 million in the fourth quarter of 2017.  The impairment charge represents the estimated net book value of the certain longwall equipment and other related assets as of December 2017.

Well here goes the optionality. And the tax efficiency of holding an MLP is gone with the tax reform. The only saving grace is API2 at $94 and a normal winter in the US midwest.

Do you guys have any idea about the insurance terms? Will there be a payout considering the existing mine is sealed.

I was wondering the same thing about insurance. The filing was a little confusing...is it still posssible the mine will come online? I know it's now a low NPV situation because they have to buy new equipment, but is it possible that they get a huge (I think Moore said $150 mm in equipment would be required) settlement and can be mining again soon? Also, I'm pretty sure insurance payments aren't subject to the cash sweep rules so maybe A large insurance payment could flow through to common holders to eat into  MQD balance...


Don't think they can reopen the same mine once its sealed. But they can always set up another mine nearby. I doubt they will, considering the coal price and their financial situation. They did apply  for the mine expansion back in 2012.

http://www.stltoday.com/business/local/residents-ask-regulators-to-reject-mine-expansion-sought-by-foresight/article_534c94d4-5a1b-5d1c-b2b9-5d2bf7166c76.html

Insurance settlement will be interesting. This is what they said during the last qtr. call. Maybe the decision to seal was taken to recover the damages.

"We're expending significant resources in these efforts, and we continue to pursue recovery of expenses and damages related to the Hillsboro combustion event under our property insurance policy. During the quarter, we did receive an additional $1.5 million of insurance proceeds related to this event."

heth247

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Re: FELP - Foresight Energy
« Reply #935 on: December 24, 2017, 09:41:55 AM »
Don't think they can reopen the same mine once its sealed. But they can always set up another mine nearby. I doubt they will, considering the coal price and their financial situation. They did apply  for the mine expansion back in 2012.

http://www.stltoday.com/business/local/residents-ask-regulators-to-reject-mine-expansion-sought-by-foresight/article_534c94d4-5a1b-5d1c-b2b9-5d2bf7166c76.html

Insurance settlement will be interesting. This is what they said during the last qtr. call. Maybe the decision to seal was taken to recover the damages.

"We're expending significant resources in these efforts, and we continue to pursue recovery of expenses and damages related to the Hillsboro combustion event under our property insurance policy. During the quarter, we did receive an additional $1.5 million of insurance proceeds related to this event."

I thought they are talking about sealing the current longwall district of the mine, not the entire mine itself, right?  I am not a mine expert, but how difficult is it open another longwall district in the same mine?  Hillsboro is their best asset, I think they will try everything to restart it. It will add 8M tons per year, that's the fastest way to lower the EBITDA leverage ratio so that they can distribute and for Murray to get paid. Thoughts?
 

valcont

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Re: FELP - Foresight Energy
« Reply #936 on: December 25, 2017, 07:50:31 AM »

I thought they are talking about sealing the current longwall district of the mine, not the entire mine itself, right?  I am not a mine expert, but how difficult is it open another longwall district in the same mine?  Hillsboro is their best asset, I think they will try everything to restart it. It will add 8M tons per year, that's the fastest way to lower the EBITDA leverage ratio so that they can distribute and for Murray to get paid. Thoughts?
 

Not sure what the correct terminology is. But a hole is blown up and it'll be sealed. They have 2 more to go as per this.

"Hillsboro Energy’s mining complex, located in Montgomery County, in central Illinois, is designed to support up to 3 separate longwall mines producing up to 24 million tons per year. We currently operate one longwall mine called Deer Run Mine. Because its average coal seam is over 7 feet thick, Deer Run has been one of our most productive mines since we began operating the longwall in August of 2012."

http://www.foresight.com/operations/

Question is if the insurance recovery would only cover the depreciated equipment or the whole site?

heth247

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Re: FELP - Foresight Energy
« Reply #937 on: December 27, 2017, 12:35:05 PM »
Not sure what the correct terminology is. But a hole is blown up and it'll be sealed. They have 2 more to go as per this.

"Hillsboro Energy’s mining complex, located in Montgomery County, in central Illinois, is designed to support up to 3 separate longwall mines producing up to 24 million tons per year. We currently operate one longwall mine called Deer Run Mine. Because its average coal seam is over 7 feet thick, Deer Run has been one of our most productive mines since we began operating the longwall in August of 2012."

http://www.foresight.com/operations/

Question is if the insurance recovery would only cover the depreciated equipment or the whole site?

Hope they can clarify it during the next conference call. The 8K really communicates poorly.

Happy new year, everyone! Hope FELP will resurrect in 2018!

valcont

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Re: FELP - Foresight Energy
« Reply #938 on: December 30, 2017, 08:46:00 AM »
13% up on no news. Who is window dressing their portfolio on the last day?

gadfly

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Re: FELP - Foresight Energy
« Reply #939 on: January 06, 2018, 05:53:12 PM »
I was perusing the PJM website and downloaded fuel mix data from Oct 6 through Jan 6 for 2016 and 2017; I've attached a graph of the data.

If you assume a 10.4mm Btu per MWh heat rate for the average PJM coal plant, and 11,800 Btu per average pound of coal (probably too low), over the period in 2017, PJM plants burned 29.08 mm short tons of coal. In 2016, over the same range, the burn was 29.78 mm tons. I was surprised to see oil burn up significantly this year. I'm not sure why that's the case as oil is very expensive for power generation (I think something like $10 MMBtu). The amount of oil used in winter 2017-2018 is worth roughly 700,000 short tons of coal.

I was expecting to see higher numbers for winter 2017-2018 than 2016-2017, but I guess it's not all that bad if you consider the export tons leaving the market.
« Last Edit: January 07, 2018, 07:00:48 AM by gadfly »