the diesel will be sold in truck stops near by, doesn't have to move. its a drop in the bucket in national distribution network., the economics of the refinery haven't changed much with lower feed costs
i read the intention , as said above, is to buy the delivery contract with a firm price, and supply that coal at a profit from existing ARLP mines or inventory. This is what we hope for as other competing suppliers give up and we take over business that will be profitable to ARLP because of lower cost of supply.
Im with ya all the way. did double down on the PSX, and liking the snapback. more to come.
BTW, am I the only one looking at 9% Y/Y increase in US mogas sales?? its almost like the demand curves i remember from Econ 101. Price goes down, purchases go up. Who knew?
US mogas demand this summer could consume almost half of the alleged crude oil supply surplus.
Can you imagine how much money you could make on the options markets if you were the decision maker in Saudi, and knew that you were about to take some unexpected action that materially impacts supply/demand balance of oil?? i can't but help wonder how much "Insider Trading" happened as a result of the decision to spark a price war, and further to jaw bone the price as low a possible?? And on the back side of the dip, how much more could you make covering shorts and going long, just before you trim production and create a modest shortage. ?? Its better than having a time machine. Sure could make up for a lot of the revenue loss from the price decline.
reviewed the Q4 degree-days data on the company website. The sales are going to be somewhat less than typical as dispute a cold Nov, the Dec warmth brought overall sales potential from cold weather to about 10% less than last year, and also somewhat less than historical norm. So, volume sold should be on the slim side for Q4. On the plus side, i think wholesale C3 prices have fallen more than retail.
I always hate to say i was wrong, but after just reading the conf call from SO, they are placing blame for construction delays on the contractor. This looks like a long term legal confrontation. The amounts at stake could be huge. This job could more than cancel all the other positive jobs in the shop. with the wrong contract, SO could end up owning CBI. The stock we own, is now a #$%$ shoot. its too bad. 98% of this company is on track, but the job we bought with Shaw is possibly going to kill the goose. Of course shooting #$%$s doesn't always end bad. but the legal resolution could be years off. Who can afford to wait. it becomes and arbitrage arrangement rather than a sure fire investment. too bad. I'm going to wait for some good news, but look for a chance to get out with a moderate loss compared to the collapsed price we have now. These guys need to get real at the next earnings call.
yes, maybe. You may be right. But once the CEO of the client comes out and says that the contractor is not doing what was promised, AND the contractor is not doing enough to mitigate the now expected late schedule, then you have the client saying he is going to war with CBI. Not good. Going to war is a poorer outcome than negotiating a compromise. Going to war requires lawyers, time, and withheld payments. It means a delay in returning to expected positive cash flow. It means that years from now we may get a positive resolution, and a full payment for services. Its a #$%$ shoot. Not how i invest my money for the long term. If i want to gamble, i go the Vegas. I like em both, and know the difference. Just wish id been told the "investment i thought i made to double up on the way down, was really a #$%$ shoot.. Expect CBI will announce a charge against Q4 2014, and hold in reserve against expected claim. Maybe as much as 0.5 B$ lets see in a couple of weeks. I hope I'm dead wrong.
Toshiba may be on the hook, no way to know. my guess is that to preserve the business arrangement they will find a way to split the charge, with both taking a hit. As to risk reward, i think its a good chance it will come out either great, or way better than stock price has discounted. but it won't happen this year. my best hope is CBI takes a big charge against 2014 earnings, so wall street can concentrate on 2015/16 earnings, and forget about the Nuke mess. Then if the final costs of the schedule delays land in somebody else's lap, they can bring back the money that was set aside for the settlement. That would be way down the road. This won't likely end till the
SO plants come on line in 4-5 years. The potential LD for this could easily be more than a years profit for the balance of CBI operation. Thats a huge overhang, that will keep away even value buyers.
Well, I'm just guessing, as i haven't read the contract. Although the benefit of the deal as described by the Southern Co CEO sure makes it should like he thinks that he should be compensated for anything but an onetime, on-budget project. But who ( Even Shaw) would sign up for such a thing on a untested new generation Nuke job ??? I can't believe the LDs aren't capped at a level that would have kept the EPC contractor still in business. And somewhere, somehow, CBI should have done the DD to identify the max liability of all the jobs they bought with the buyout, especially the Nuke job. Maybe they were just blind to the details of a Nuke job. Never had anything to do with one.
The charge i want to see, is to identify that the job will have losses compared to the "as-sold" booking, and set up a fund to cover those, and take all the hurt at one time against last year results. That way the nasty details of the loss, as they play out over years, doesn't continue to ruin sentiment on a well run company. stock price is supposed to be about future earnings, not past , onetime screwups.
We will all find out together. The tea leaves that I'm reading are based on the statements of the client. They are signaling that they were presented with a change order and projection of schedule change, that they do not accept responsibility for. They are publicly blaming the contractor/licensor team, and not accepting either the cost overrun, or the loss production time from the completion delay. That is new information , not available at the time of CBI latest projections. SO is suggesting they are protected by a contract for these losses, via liquidated damage provisions for the added costs, delays.
Be assured that my stake in the matter is hugely long CBI, and hoping the tea leaves have been misread.
some news on the SO front. The analysts are starting to doubt that there will be any meaningful recovery to them from the construction delays on the NUKE, and Gasification projects.
let it stay down a little longer. i like the price my dividends are being reinvested at.
upstream oil is bigger for FLR. they reported good earnings today and moderately positive guidance . FLR is trading at 12-14 times 2015 expected earnings. CBI is trading at less than 9. We have a long way to run, and this short covering before the report is a good start.
yes, i did expect that. moved most of my holly funds into HEP. Still holding out hope that higher margin specialty refiner CLMT will keep their high payout. But, can't ask for more in div that company is netting from operations.