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Pacific Ethanol, Inc. (PEIX) Message Board

elahens 13 posts  |  Last Activity: 20 hours ago Member since: Sep 27, 2006
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  • From a call with IR after CC
    o 2.5mil warrants - thus 2.5mil shares - were issued in last transaction on 7/29
    o Total no' shares now is 24mil
    o 1.6 mil warrants left
    ===============================

    Following NOT from the call!!!!

    So one can summize
    a) plenty of shares floating now; interesting to see next short count report
    b) total number of shares to come to approx 26.5M
    c) management Bonus shares might make this 27M ( my guess).

    If spread is 80-90c per gallon, take out 40-45c for Operations.
    If one assumes 20c- 30c Gross Margins on 45mil gallons/qtr,
    = $9M -12.5M Gross * times 91% ownership
    Take out $4M SGA and $1M (Interest+pref div).
    Divide by 24 mil shares

    Positive earnings but not as big as when DDG/WDG was selling at a premium.

    Growth projects are needed to bump net earnings to $10M per quarter..

  • Reply to

    Suugest Benchmarking Gevo to AMTX

    by elahens 22 hours ago

    Gevo Techonlogy replicable across many existing plants to shave ethanol capacity.

  • Number of shares Gevo 90Mil AMTX 200M
    Products ethanol and Biofuel
    Production ethanol 4.5mil /quarter vs 16M quarter
    Production butanol ??? vs biodiesel(in India)
    By-product DDG vs WDG

    Share Price 51c vs $10!
    Equity value $45M vs 200M!!

  • Like others in the ethanol industry, since ADM is one of the highest capacity and sales,
    a) DDG prices will affect 2Q and forecast
    b) Transporation of goods to China (corn and DDG?)

    Separately, adjustment for corn value in inventory might be a bog hit.

    significant enough for a dip...

  • a) 22M shares as of 6/30 is a weighted figure
    b) $19M in cash gained from warrants is for how many net additional shares?
    c) It was also sated that there is 1.6M warrants left as of 7/29

    So the question is : as of 7/30/14 how many common shares are isssued to estimate
    this 3rd quarter earnings?

  • elahens elahens Jul 27, 2014 2:52 PM Flag

    An alternative Stage III sanction would be to assist Europe to buy oil from different sources and to lower prices. $90/barrel and then $80 might help Russia bend on its expansion zeal an to retreat its troops without loosing face. .

  • Reply to

    Spot Prices West - East now at level

    by elahens Jul 26, 2014 8:32 PM
    elahens elahens Jul 27, 2014 2:36 PM Flag

    Not a misprint... see below.
    The number itself ($2.24) is not the observation here.
    The Delta between East ( a more stable market) and the West, or so call
    WEST pemium is down to zero ( from 20c-40c during the peek of train transport hang-up).

    Here is the 7 -day data track to address that this not a misprint...

    7/18 the print was 2.40-22.43
    Then on 7/21(Monday) drop to 2.21 ---then I thought 'just one day'
    On 7/22 and 7/23 went up to 2.34 ( mid-way between between the two previous points)
    on 7/25 back to 2/24.

    All along 7/22 and on, East barges spots are in the 2.22-2.24 range.

  • East and West spot ethanol prices about level on Friday- $2.24 gallon.
    This is just TEN cents above Argo at $2.14.( premium is down from the 40c and up in 1Q).
    And Argo is FLAT with CBOT August quote.

    With PEIX corn basis at $1.60/bushel, spot premium does not cover basis;
    margin narrows.

  • Reply to

    Lower distribution expectations.

    by riverfront418 Jul 24, 2014 7:56 PM
    elahens elahens Jul 25, 2014 3:38 PM Flag

    Replenishing working capital means the CASH stays at RNF leveland does not move to RTK as dividends (where it pays for management bonus). Growth Projects will expand
    revenues.
    Good assets management.

    By the way less cash is needed as natgas prices comes down ! 3.70's is the new ballgame!

  • elahens elahens Jul 24, 2014 10:28 AM Flag

    One more comment: as I saw yesterday EIA data, more ethanol production driven by exports demand and summer ( seasonal deman), mopre DDG or WDG is available. Drive down prices even further. .

  • elahens elahens Jul 24, 2014 10:26 AM Flag

    Just to revisit the trends:
    1. yes there was extra costsfor natgas in 1Q but end-product prices covered the costs. Also remember that REX 1Q is Feb until April ( not Jan until March). Net is that they already covered Feb March natas cost with April operations. So this issue is behind them.

    2. How do one hedge DG ? Since there is not a future market for by DG as+% a corn by-product. One approach is to sell a proxy product like soymeal futures. By selling a proxy, when DDG goes down, then one would expect soymeal to also track it. If the proxy does not track, then one has to buy-it back at a more expensive cost. Well soymeal was down approx 20%, while DDG went down 50%+ in the last 3 months.
    Net is if there was a lonk-in strategy ( and as of last call there was), then not only income from DDG would be less, but buying back the soymeal futures positions would be relatively 30% costly....
    Hedging is both a tool a sword at times.

    Interesting to see how much better others have navigated this DDG price downturn.

  • Reply to

    Natgas feedstock new price level

    by elahens Jul 7, 2014 11:38 AM
    elahens elahens Jul 21, 2014 10:16 PM Flag

    Just to track: Natgas... it is in the $3.85 range. Down 40c since Jul 7 ( 14 days)

    Sentiment: Buy

  • elahens elahens Jul 21, 2014 3:35 PM Flag

    Diversified yes, but simple process.
    You put corn in and you get 3 products out (ethanol, DDG or WDG and corn oil).

    If you do not want to recognize that all products can be sold on a future curve, or the Futures market is not BIG enough for high volume of ethanol gallons can be pre-sold,
    then be it.

    DDG came down more than 50%. Producers may have to store their DDG to sell later. If this is the case in 3Q, they will incurr cost but not 100% of revenue on DDG produced during the quarter. So some producers will see cost and increased inventory with reduced margins.

    Keep looking at crush spread only. Positive margins is still up.

    But does bottom line needs to reset/re-forecasted, specially very little presell of DG can be executed. Thus the purchase of 'cow feeding' operations by GPRE. Others (like VLO, ANDE, REX..) may have farmer cooperatives to take on what they can consume. However DDG volume being shipped to China was a large percentage of production. The challenge is what it is. Lower price is a by-product of supply/demand.
    As fuel export drives ethanol production, DDG byproduct supply is in surplus mode.

    Buy the total backet, but do not ignore the pieces.

    Sentiment: Buy

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