NRP shares moved up 4% and then dropped back 5% into the red while the dow is up almost 200 points. Big volume for NRP. and ex date is only 8 trading days ahead. Have seen no news. Very strange!
When NRP cut its distribution 36% in January, the units dropped 20%. It has since stumbled lower, up and down, so its about 31% lower than where it was before the cut.
Back in 2012 and early 2013, OXF, a very small coal MLP, eliminated its distribution in 2 steps. After the second cut, the unit price had dropped 62% from where it had traded before the first cut. (Drop of 26% in October 2012, followed by a 30% drop in January 2013, when the final cut was announced.)
Last night, RNO, yet another small coal MLP, announced an 89% cut in its distribution and it's trading down around 60%.
So in the coal space, NRP isn't looking so bad.
I am certain that the 8.5 MM units were sold, and I am certain that the over-allotment (the 1.275 MM units) will be sold as long as the price stays above $ 12.02. NRP did a final prospectus filing that indicated the 8.5 MM sale was successful, with closing expected on Oct 10. If somehow it had blown up, they would have said so.
Plus, Mr. Robertson and his family have done some filings to show that they bought some of the 8.5 MM shares. If the offering had been unsuccessful for some reason, that wouldn't have happened, either.
The share sale took place when there was a run on all energy stocks so we go diluted a bit more than we should have. But it is still nice to be back at $13 head for $20. We lost $23 because management was not on the ball.
RNO cut its distribution from 44.5 cents to 5 cents per Q after hours tonight. The units are trading down something like 40% after hours.
Funny, RNO sold off its oil & gas interests this year for a huge gain, paid down all its debt and waited for a coal recovery which hasn't come, obviously.
I assume the power utilities either rely on NOAA or private forecasters who in turn rely on NOAA. So I have to assume the word is out. This applies to the Eastern Coast of the US. and northern Europe.
BTU has booked a significant percentage of their 2015 and 2016 coal business. Their Chairman reportedly said that BTU does not book longer term business that is not profitable. I hope that this is good news for all coal businesses.
Weekends and holidays always confuse me with the ex dates. :Last year, NRP's record date for ownership was 11/6/13 and the ex date was 11/1/13 because there was a wekkend in between those dates.
This year, the record date (11/5/14) is a Tuesday. In order to own the units on that date, you normally have to buy at least 2 trading days prior. 2 trading days earlier would put you at November 3, a Monday. But like I said, I'm always wrong on this so maybe Halloween Friday (the 31st) is right. When the ex dividend calenday web sites update for today's announcement, we'll know. The important thing is that, as expected, NRP maintained its distribution.
Dow down 63. Good move up for most coal company stocks. NRP traded up early but moved down into the red. Now up a few pennies. Natural gas continues to drop.
BTU reported 3rd qtr results. Did not lose as much as expected. Stock traded up almost 6%. Now headed into the red. Surprised that they continue to increase production when they are losing money. Surprised that they ave already booked a significant part of 2015 and 2016 production.
Goldman Sachs attributes this week's rally in coal stocks to shorts covering. The comment that I cribbed from some web site today: In a research note earlier, Goldman Sachs commented on this week's rally in coal stocks. Stocks mentioned in the report include Alpha Natural, Arch Coal, Cloud Peak Energy, Consol Energy, Peabody Energy, Foresight Energy LP, and SUNCOKE ENERGY, Inc. In the view of analyst Neil Mehta, gains are tied to profit taking on the heavily shorted group.
"After sharp ytd underperformance, the coal sector rallied 18% this week versus the S&P 500 down 2%. We note the sector has still lagged the broader market by 44% this year and 13% in the last month. We attribute this week’s strength to profit taking and technical factors more so than any fundamental changes in the underlying commodities," said Mehta.
"Overall we forecast four beats (ACI, BTU, CLD, and SXC) and three misses (ANR, CNX, and FELP) for 3Q2014. We do not view quarterly results as important as commentary on (1) asset sales, (2) contracting details, (3) resolution around rail issues and (4) production cuts."
Funny, SXC is getting out of the met coal business. It's real business (about 90% of revenue) is converting met coal into coke on a fee basis. And CNX is mostly oil & gas now. But short covering is what GS thinks happened this week.
BTU reports 3rd qtr results on Monday. Zacks thinks that they will beat on revenue but miss on income. Will probably take coal stocks down on Monday. BTU is the largest US coal company. NRP to announce distribution date on Thursday. Should hold $12 stock price till after ex date (ten trading days ahead).
Seventy five thousand NRP shares traded at the close today at$12.04. Don't understand this trade.
OCIR owns 51% of OCI Wyoming; NRP owns the rest. OCIR raised its quarterly distribution 5% from last Q, so presumably the underlying operation did well, or at least decently, during the Q. OCIR has IDRs; I'm not sure where it is in the splits just now, but presumably some of the increased cash flow goes to its GP. NRP simply owns 49% of the operation, with no obligation to share it with any GP, so it should do slightly better than OCIR. So that's a good sign for Q3.
The problem is that there are currently a few public companies that have announced their intention to sell met coal mines in APP, and each has taken a large write down to reflect the reduced value of the property. No one has been able to sell any mines yet, though, which isn't a good sign. It looks like SXC and CLF, for example, have essentially written off 100% of their met coal mines and still haven't found a buyer. SXC looks like the write off was greater than the carrying value of the mine, which means the company thinks it may be on the hook for EPA/workers comp liabilities even after a sale. So I think there's a good chance that at least some of the mines will simply close, and if those mines happen to be on NRP properties, it's not good for NRP.
NRP only gives disclosure about the production from its various properties once a year, and usually only gives detailed future guidance once a year, so all we can do is guess what's going on.
Obviously it would be above ground facilities.If NRP owns the subsurface someone else can not sell it. DUH.
If it is sold to someone who plans to operate it, that is good news for NRP.
I seriously doubt that NRP is highly correlated with the overall market at this point in time.
So are small caps. I think people just don't want to own the perceived riskier investments going into the weekend. But who knows. We're getting inot earnings season soon. Some coal companies should have good or at least decent numbers (ARLP, FELP, CNX, maybe even BTU) and others will be disasters. Let's just see what the met coal names say and how that might affect NRP's guidance for next year. If NRP gives any guidance.