Why I'm about to buy BTU

[ErrosionOfAccord]

Opened an Ameritrade account today and will be buying a block of BTU, here's why.

The west black line of the rectangle represents nothing but my ineptness with Paint. The north, east and south black lines represent the approximate current pit boundaries. The Google Earth photo is at least a year old. The yellow rectangle represents an area that is currently mined out. The arrows represent the direction of mine progress. Currently the mine is being high graded, in other words, they are shooting for the highest profit margin. The yellow area was mined using shovels in order to prepare the area to be mined with draglines such as the one in the red circle. The current east to west configuration of the pits probably averages about 2.75:1 strip ratio. over the course of the next couple of quarters I expect a dragline to start mining to the west just west of the yellow rectangle where the strip ratio is about 1.25:1. This will do a couple of things; A) it will lower cost significantly B) It will put pressure on other mines in the region. I'm just thinking aloud but in my best guestimation BTU, which is already the largest producer in the PRB is looking to increase their value by decreasing the value of other properties by putting them out of business. I'm hoping like hell to get my block purchased prior to the 25th when the quarterly results come out. All is pending a money transfer to Ameritrade.

In other news Revelation Coal is purchasing the old Alpha (now Contura) mines in the basin. They are about to take a blow to the nuts IMHO because the Belle Aye mine is going to be hurt by this BTU move.

As always DYODD and comments are welcome.

 

[EO 11110]

so you are seeing an increase in supply? how's the demand side look?

 

[ErrosionOfAccord]

Demand side is fine with gas at $2.91 in the shoulder months. Also postulating that some supply will go away when these other mines feel the pinch.

 

[Goldhedge]

BTU's a gas $30/share

 

[ErrosionOfAccord]

Saying you wouldn't do it?

 

[GOLDBRIX]

Well, You are close to historic lows per share. 2015 was the last dividend of o.oo25 cents per share.

Barry done alot of damage to coal users in the United States whether a recovery is close at hand under a TRUMP Administration I feel is too soon to call.

It will be a hellofa Move if you hit.

I'm in SJT a < $8.00 per share with a MONTHLY DIV $0.07 per share. NatGas w/ Season Coming, 11.23% annual DIV. return, Popularity/Demand of NatGas increasing with improving economy.

Right now I'm re-investing the DIVs for more shares of SJT.
JMO
DYODD,
GLTA,

 

[ErrosionOfAccord]

Don't forget BTU emerged from BK last spring.

 

[Mujahideen]

What are you expecting this stock (sjt) to do? Do you see it reaching $10 by next year?

 

[GOLDBRIX]

Don't forget BTU emerged from BK last spring.

"...The majority of the free cash flow will be used to repay the term loans, and some analysts project the company to be net cash positive of $800 million by late 2018".

https://seekingalpha.com/article/4060189-peabody-emerges-bankruptcy

 

[ErrosionOfAccord]

I plan on being out of it by this time next year. My take is that cost per ton will go down for the PRB during the next three quarters and induce increased share prices. Have been watching this progress and probably should have pulled the trigger last quarter. I don't have inside information, just watching the progress and see what's going on.

 

[GOLDBRIX]

What are you expecting this stock (sjt) to do? Do you see it reaching $10 by next year?

Technically SJT is San Juan Basin Royalty Trust, NOT a STOCK.
I see Unit Share pricing increasing through the Winter months, possible increases in Unit Distribution, and especially in a TRUMP led economy improving.

I'm getting paid every month to wait and see.

FYI - I do hold this in a ROTH IRA so there are TAX differences compared to those who hold it outside a ROTH.

GLTA.
DYODD,

 

[southfork]

What are you expecting this stock (sjt) to do? Do you see it reaching $10 by next year?

Looks like it just jumped from 6s, wonder if forward movement can continue

 

[EO 11110]

that sjt - think you are limited on how much you can hold in an ira. that's a shame

i like the mlp's -- if they are okay now, at this oil price...

 

[Professur]

And I can't find heating coal in Quebec for any money.

 

[ErrosionOfAccord]

The pic I posted probably isn’t a tenth of the mine. Type NARM into google earth. Then zoom out.

 

[ErrosionOfAccord]

Up 30%

Also bought 3400 shares of cctc on a whim. At .11 per share I’m not horribly concerned the PRB coal is about 27-30% water. Shipping all of that water by rail to power plants is a huge cost and waste issue. If CCTC makes good on this technology they will be a pretty incredible company. Coal drying has been tried here and failed due to explosions and other issues. It’s a buy and hold gamble for me.

 

[GOLDBRIX]

that sjt - think you are limited on how much you can hold in an ira. that's a shame

That is news to me.
There are limits considering what your income is in any Traditional IRA. If you qualify for a Roth (Post-Tax) IRA I do not recall limits.
I aint no where close if there are. DYODD

 

[ErrosionOfAccord]

Up just shy of forty percent. Curious what the quarterly brings on the 7th. So curious I put a $5.62 trailing stop in place. My current plan is to ride it up and create seed money for smaller companies. This is my first foray into equities so I’ll probably manage to piss every dime away.

 

[GOLDBRIX]

A general rule is - When you decide at what price you are willing to pay for an equity you need to start deciding at what price you are SELLING.

 

[edsl48]

If you are into coal consider ARLP or its general partner AHGP They each generate distributions in the 10% area. DYOD

 

[ErrosionOfAccord]

Entered a 10% trailing stop and a $44.10 limit to BTU today. Up 36%

CCTC has been a bust but I'm holding 3100 at a $0.03 loss. Despite their debt I think they can make a big go. Tomorrow I'm going to drive out past the place they are setting up and see if they are getting their act together. There are rumors that the test plant will be operating in the third quarter. They have several Asian countries lined up to license the technology if they make a go of it, along with connections to the University of Wyoming.

 

[ErrosionOfAccord]

Hope you slithered out of that SJT in January Goldbrix.

 

[GOLDBRIX]

Hope you slithered out of that SJT in January Goldbrix.

I've liquidated most and moved that into a REIT with a monthly DIV.

Planning on moving out the rest and put it in with my BPT ( Prudhoe Bay Royalty) holdings. Unit Payment varies QU but the last in April was $1.27 per.
Crude price is up big since last QU Payment so I'm expecting a bigger per unit pay-out in July.

DYODD

 

[ErrosionOfAccord]

BTU getting positive energy on energy so I opened up the top end and narrowed the trailing stop to five percent.

 

[ErrosionOfAccord]

 

[GOLDBRIX]

Take a look at BPT and see what you think. Next Div/UNIT Pay is in July. Jus' Sayin'

DYODD

 

[ErrosionOfAccord]

I’m playing in small potatoes. BPT is tempting but I hate to wrap $2700 into one stock. Started with $3500 and it’s all I care to play. It’s like setting your outside limit before walking into a casino. If I lose the whole nut I’m done.

 

[ErrosionOfAccord]

Unappreciable in reality but this should help to hold the price up today.



Why Genesee & Wyoming’s North American Traffic Rose in April
By Samuel Prince May 17, 2018 | 12:38 PM

GWR’s North American carloads
Genesee & Wyoming (GWR) receives between 60% to 65% of total revenues from its North American operations. The railroad’s North American railcar traffic expanded 4.9% YoY (year-over-year) on a same-railroad basis in April. New railroads added 518 carloads to North American volumes that month.
On a reported basis, GWR’s carloads in the North American region jumped 3.7% YoY in April 2018. From the last three months ending in April, the railroad’s same railroad operations displayed volume gains.

GWR’s coal traffic
Coal (ARCH) and coke carload growth have been a matter of concern for Genesee & Wyoming. After declining YoY for many months, the company’s coal (ARLP) carloads reversed the trend in April 2018. During the month, GWR’s North American coal and coke carloads rose 16.3%. The company hauled slightly more than 19,000 coal and coke carloads this April compared to ~16,400 last April. The share of coal and coke carloads in North American total carloads expanded 1.4% to 14.1% in April from 12.7% in April 2017.



Other than coal (UNG) and coke carloads went up 3.3% in April 2018 to a little less than 116,400 from 112,700 in April 2017. Carloads excluding coal (BTU) and coke were 85.9% of total carloads in 2018 compared with 87.3% last year.

https://marketrealist.com/2018/05/why-genesee-wyomings-north-american-traffic-rose-in-april

 

[edsl48]

Revenge of the dinosaurs: Administration seeks technology to revive coal
In a sign of just how serious the Trump administration is about bolstering the declining coal industry, the federal Department of Energy is requesting designs for smaller, theoretically more efficient “modular” coal plants. This comes as natural gas has captured an increasing share of the electricity market, while prices for renewable energy sources like wind and solar continue to drop, making coal an increasingly unattractive option for energy producers.

According to the U.S. Energy Information Administration, 30.1 percent of the nation’s electricity comes from coal-burning plants. As recently as 1997, coal’s share was 52.8 percent. It is unlikely to enjoy such prominence ever again.

Released earlier this week, the request for information from the DOE’s Office of Fossil Energy — the first step in a process that could eventually see projects funded with taxpayer dollars — seeks “input on the development of small-scale, modular coal-based power plants of the future.” These smaller, modern plants would have to feature “operational flexibility, high efficiency, and low emissions.”

No funds are attached to the request for information, which is usually followed by a request for proposals. But the mere announcement of the initiative suggests that Energy Secretary Rick Perry, the former governor of Texas, takes seriously President Trump’s promise to make coal the centerpiece of his energy policy. Environmental Protection Agency Administrator Scott Pruitt has also been a zealous advocate for coal, in a striking departure from his agency’s mission. The three men, like many other high-ranking officials in the administration, have voiced profound skepticism about whether burning fossil fuels contributes to global warming. Science contradicts this view.

The Mount Storm coal-fired power station sits on a man-made lake, created as a cooling pond for the power plant, near Mount Storm, W.V. (Photo: Michael S. Williamson/The Washington Post via Getty Images)
More
Environmentalists and energy experts contacted by Yahoo News for this article roundly criticized the department’s interest in new coal plants as misguided, a waste of time if not yet of money. “The construction of any new coal power plants, modular or otherwise, is insane,” says Michael Hendryx Smith, a public health expert at Indiana University-Bloomington who has written extensively about the hazards of the coal industry. “Climate change is a huge problem, coal reserves are in decline, natural gas and other fuel sources are economically superior. This is more stupidity from the current administration and another effort to support business interests over the well-being of the human race.”

The department’s detailed guidance, titled “Coal-Based Power Plants of the Future,” says that projects should have at least 40 percent efficiency and “must be carbon capture ready,” though they do not actually have to include carbon-capture technology, a process meant to minimize emissions of greenhouse gases. Although carbon sequestration has tantalized with the promise of what Trump has called “beautiful clean coal,” the technology remains unproven.

In keeping with the precepts of “modular” design, which has become popular in commercial and residential construction, the plan calls for “high-quality, low-cost shop fabrication” and “simplified maintenance features,” among other features that would presumably drive down costs while increasing efficiency. On average, American coal plants are only 37.4 percent efficient, meaning that nearly two-thirds of the coal burned is not converted to electricity. The nation’s most efficient coal plant, in Arkansas, boasts an efficiency of 42 percent. The most efficient coal-burning plant in the world, in Denmark, is 5 percentage points more efficient than that.

Solar panels have an efficiency of only about 15 percent, but sunlight, unlike coal, is a free, renewable resource. The cost of solar panels has dropped by 80 percent in the last decade. Earlier this year, Bloomberg estimated that solar will soon be “the lowest-cost option almost everywhere.” California, the nation’s most populous state, has mandated that, starting in 2020, every newly constructed home must be outfitted with solar panels.

Workers install solar panels on the roof of a home in San Francisco on May 9. (Photo: Justin Sullivan/Getty Images)
More
Given both public perceptions and economic pressures, research on new coal plants may be tantamount to the Pentagon seeking a design for a superior musket.
“The Department [of Energy] has a long history of trying to find new coal-burning technologies to try to deal with the fact that coal isn’t competitive in today’s marketplace,” says Elgie Holstein, an energy expert at the Environmental Defense Fund who previously worked in the Obama administration. Holstein adds that there is “no shortfall, there is no need, there is no demand for coal-fired plants.” (The Department of Energy declined multiple requests from Yahoo News to answer questions about the modular coal plant initiative.)
Yet there does remain President Trump’s need to maintain political support in Appalachia and the Upper Midwest, where resource extraction and energy production were once economic mainstays. During the presidential campaign, Trump’s rival, Democratic candidate Hillary Clinton, said her administration would “put a lot of coal miners and coal companies out of business.” Though her point was about the need to shift to a greener economy, Trump and many of his supporters seized on the comment. West Virginia, the heart of coal country, gave Trump one of his biggest margins on Election Day. He also won Ohio and Pennsylvania. Clinton subsequently said she regretted no comment she made during the campaign as much as the one about coal miners.

This West Virginia coal preparation plant belongs to Alpha Natural Resources, which has emerged from bankruptcy and is pursuing a merger. (Photo: Luke Sharrett/Bloomberg via Getty Images)
More
Not that Trump has found it easy to fulfill his promise. In the early months of his presidency, Trump and supporters like the EPA’s Pruitt claimed that the administration had created some 50,000 coal-related jobs. This claim was false: As of mid-2017, only about 1,200 coal jobs had been created. In 2017, 27 coal plantswere in the process of being closed. That’s only six fewer than the total mothballed during President Barack Obama’s second term in the White House, according to Bloomberg New Energy Finance.
That trend continues despite Trump’s efforts. In the first 90 days of 2018, three coal plants shut down in Texas, leading to an estimated 850 job losses. The state now has the capacity to get more energy from wind than coal, a remarkable turnaround for a state so identified with fossil fuel extraction.
That has led the administration to artificially bolster the coal industry — a process that Republicans called “picking winners and losers” when the Obama administration encouraged solar-power development. A day after the Department of Energy announced it was welcoming research on modular coal plants, Perry announced that he was considering using the Defense Production Act to keep coal and nuclear plants from shuttering, on the theory that the continuing operation of coal plants is a matter of national security. The American Security Project has, on the other hand, called global warming — to which coal-burning contributes — an “accelerant of instability” in international relations.
Environmentalists greeted the push for new coal plants with dismay, even if the move wasn’t exactly unexpected. “The fact that the Trump administration is trying this new small-scale coal push isn’t surprising,” Sierra Club legislative director Melinda Pierce told Yahoo News, “since the Trump administration has always had a difficulty with facts, standards and basic economics.
“Making smaller coal plants doesn’t make coal cheaper or cleaner, it just forces the public to subsidize a dangerous fuel source of the past.”

Pro-coal signs can be seen all over West Virginia. (Photo: Michael S. Williamson/The Washington Post via Getty Images)

 

[GOLDBRIX]

FROM ARTICLE: Science contradicts this view.

From a PROG and IPCC point of view. YMMV

 

[ErrosionOfAccord]

Stopped out today. The longer I work for this outfit, the less my confidence. Top down management with no appretiation for talent or experience and a desire to inspire those with psychophantic leanings may lead this company astray again. I’ll not elaborate but corporate killed the golden goose, and no, I’m not referring to myself.

Looking forward to playing with all of this dry powder.

 

[Mr Paradise]

It’s how I feel about CPB currently. Oh well, recession talk will come again and the center aisles will once again get some love.

 

[edsl48]

Coal Just Won't Die, and Neither Will This High-Yield Coal Stock

Reuben Gregg Brewer, The Motley Fool
,
Motley Fool•September 29, 2018


Although coal is among the most unloved energy sources in the world today, we are still using a huge amount of it to support the electric grid. In fact, coal remains the largest source of electricity in 18 U.S. states, according to the U.S. Energy Information Administration (EIA). The death of coal has been just a little exaggerated, and that's great news for the over-10%-yielding Alliance Resource Partners, L.P. (NASDAQ: ARLP). Here's some of the good news in the coal space.
Not dead yet
There's no question that natural gas and renewable power (such as solar and wind) have been taking share away from coal, with natural gas passing coal as the largest fuel source for U.S. electricity generation in 2016. However, coal's share of the grid is still huge, at around 30%. And while the EIA's base case projects that figure will drop to around 21% by 2050, that's a long way off, and the path lower is expected to be relatively slow.

A coal miner in a mine
More
Image source: Getty Images.
For example, the EIA currently expects nearly 100 gigawatts of coal capacity to be shut between 2017 and 2050. But it also projects that the remaining coal plants will run at a higher capacity, with average capacity across the industry rising from 56% in 2017 to 70% in 2030. That will help to support demand. Foreign exports will remain a key source of demand, as well, with emerging markets still building coal plants because of the low cost of the fuel.
To be fair, this is the base case. If natural gas prices fall and stay low, the EIA's projections for coal will be lower. Coal's share of the U.S. power grid in the worst-case scenario falls to around 15% based on additional plant retirements and lower utilization rates. The bigger picture here, though, is that coal will still be a notable fuel source in 2050 even in the worst-case scenario. And if natural gas prices rise, then coal's future could be brighter than the base case.
What about right now?
With the demise of coal a long way off and, perhaps, slower than many would like, contrarian investors might want to find ways to invest in the space. A good option is high-yielding Alliance Resource Partners, which has an over 10% yield backed by a growing distribution. The partnership's distribution provides a tangible return of cash, allowing investors to, essentially, milk coal like a proverbial cash cow as it dies a slow death.
Business has been strong for Alliance this year. In the first quarter, the partnership sold 2% less coal, year over year, compared to 2017, but its core Illinois Basin segment increased tons sold by 5%. In the second quarter, year-over-year tons sold increased by a massive 24%, aided by cold weather and the shift of delayed first-quarter deliveries, with upticks in both its Illinois Basin and Appalachian segments. Foreign sales are also growing, with foreign coal contracts signed for both 2018 and 2019. Overall, Alliance expects to sell all of its 2018 coal production under committed contracts, with about 60% of its production already under contract for 2019.

ARLP Dividend Per Share (Quarterly) data by YCharts.

These positive trends have translated to very strong financial results, highlighted by the partnership's decision to raise the distribution 1% in the first quarter and another 1% in the second quarter. That said, despite top-line growth of 13% in the first half, per-unit net income figures were notably lower. But that's not as bad as it sounds.

Alliance issued units to acquire its general partner during the first half, simplifying its structure but diluting its per-unit figures. This process started last year, when Alliance bought the general partner's incentive distribution rights, which reduces capital costs over the long term. By merging the two companies this year, Alliance has increased its size, liquidity, and transparency. With this transaction behind it, Alliance is looking to use excess cash to diversify into natural gas and pipeline compression services. These investments are relatively small today, but they show that management is aware it needs to start building non-coal revenue.

ARLP Average Diluted Shares Outstanding (Quarterly) Chart
More

ARLP Average Diluted Shares Outstanding (Quarterly) data by YCharts.

Moreover, despite the higher unit count pushing net income per unit down 7% year over year through the first half, distributions still only accounted for around 57% of first-half net income per unit. That's plenty of safety for the distribution and should allow for further, modest, distribution hikes. The balance sheet remains strong, too, with long-term debt only accounting for roughly 25% of the capital structure. Alliance is operating in a slowly dying industry, but it is still executing very well.

Different from the crowd
At this point, coal isn't a long-term growth business, despite the strong results Alliance has put up this year. But that doesn't mean it can't be a profitable investment. Alliance has done a great job navigating a difficult coal market, it's preparing itself for the future via new investments and a simplified business structure, and most importantly, it's rewarding investors with a huge, well-supported, 10% distribution. This is a cash cow that income investors willing take a contrarian view should examine very closely. Coal's days may be numbered, but the longer the eventual demise takes, the more money Alliance will throw off to unitholders.

 

[edsl48]

The Real Cash Cow in Mining Isn’t Metals. It’s Bad Old Coal
Thomas Biesheuvel
,
Bloomberg•October 9, 2018

(Bloomberg) -- For all the bullish talk about metals of the future, miners are making some of their biggest profits from heavy-industry stalwart coal.

Base metals from copper to zinc have tumbled this year, caught up as a proxy for trade fears and emerging market jitters. Meanwhile, coal has ground steadily upwards, supported by strong demand from top commodities user China, and is trading near the highest in more than six years.

That’s translating into big paydays for producers. Glencore Plc is in touching distance of seeing its coal mining profits eclipse copper earnings this year for the first time since it sold shares in London in 2011. Anglo American Plc’s coal earnings almost trebled in the last four years, despite lower production. The fuel is forecast to contribute a whopping 43 percent of Anglo’s profits this year despite it operating some of the best platinum, diamond and copper mines in the world.

“This is the sweet spot for the coal miners,” said Ben Davis, an analyst at Liberum Capital Markets. “Chinese coal demand is through the roof and that’s because domestically they’re not producing enough. China is importing more coal than it ever has done before.”

It wasn’t supposed to be this way. Almost everyone in metals is universally bullish on copper, from the CEOs of the biggest mining companies to investors and analysts, all expecting increased demand from the electrification of cities and cars and constrained supply. Coal, on the other hand, has been widely shunned by both investors and many producers.

One explanation is that coal is susceptible to strong price swings. Unlike most other commodities, the vast majority of the fuel is produced in the country it’s burned, near power stations. The global seaborne market of about 1 billion tons is less than a fifth of total production, meaning small swings in demand can have a disproportionate impact on price.

Seaborne coal demand increased more than 9 percent in the first half, while supply rose by less than 8 percent, according to Glencore. Chinese coal power generation increased by 7.8 percent, the world’s biggest coal producer said.

While a disconnect between bulk materials and base metals isn’t uncommon -- commodities like coal and iron ore tend to be more closely aligned to supply and demand fundamentals than investor sentiment -- the pattern is holding for longer than usual.

“We have seen such disconnects before, however they have tended to last only a few weeks,” BMO Capital Markets said. “The current example has lasted several months, and every time it looks as though the macro headwinds have blown themselves out, they return once more.”

To contact the reporter on this story: Thomas Biesheuvel in London at tbiesheuvel@bloomberg.net

To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Liezel Hill, Alex Devine

 

[ErrosionOfAccord]

BTU will probably post a fair quarter this month and a good quarter in Jan. I wouldn't buy it now because of the $3500 outlay. I still have the original $3500 from my opening account and some profits. With the downswing in gold over the summer I got a black eye but the account is working it's way back up. BTU gained me $1000 when I sold. When a sucker like me can make money in the markets, it's probably time to get out. As always, DYODD.

CCTC has been making a move this month. I'm not sure what is going on with it because the news is little and far in between. I suspect they are either shipping product for test burns or right on the verge of shipping product. If they do make a go of this technology I think it could be a grand slam. Currently $0.1165 per share.

 

[ErrosionOfAccord]

Can’t figure out why but CCTC is really starting to catch a bid

 

[Goldhedge]

If you traded BTU you did pretty well.

 

[ErrosionOfAccord]

Made a thousand with one block

 

[Scorpio]

here you go EA

 

[ErrosionOfAccord]

I have 3100 shares through Ameritrade. They moved the project from Oklahoma to Gillette and partnered with the University of Wyoming and Kewitt. The mines out here sell the coal for $8-15 dollars a ton but due to rail cost by the time the product reaches its destination the price has doubled to $30. Mine mouth coal is 30% water by weight. CCTC’s process removes the water while keeping the coal tars intact. The tars abate dust issues. The process also makes the a stable pruduct. Raw coal will spontaneously combust due largely to water content. The process makes coal lighter thereby reducing shipping cost and provides a stable product worthy of sea transport.

On the biz end, CCTC has no intention of owning plants. They intend to license the technology and have been acquiring patents in coal shipping countries such as Australia. I like this business model as it lets the big players with deep pockets spend the infrastructure monies while CCTC gets a portion of every ton produced.

The question still stands. Why are they catching a bid now? What is going on that is being kept out of the news? Who just decided to start buying up shares? I can’t find any news or pump n dump articles to explain what is going on.