Tag Archives: Powder River

Business, Finance, Occupation & Industry

A New Deal Between Coal and Utility Heavyweights

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By Taylor Muckerman and Joel South, The Motley Fool

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After a rough year in 2012, coal companies hope that they could bounce back a bit this year. In the latest deal between utilities and the coal industry, Duke Energy has agreed to purchase between 1.7 million and 1.9 million short tons of coal from Peabody Energy .

Currently, Peabody Energy is the lowest-cost producer of coal in the United States, which should be a critical fact now that natural gas prices are above $4 per MMBtu. It is well-diversified geographically and is the leading player in the cheapest basins in the U.S.

If you are an investor looking for another coal company that could capitalize from rising natural gas prices, turn to CONSOL Energy . This is a company that owns the largest export facility on the East Coast and has turned the majority of its attention toward natural gas production, a move that is likely to provide a nice hedge against any continued domestic coal weakness. 

The domestic market isn’t the only place these coal companies are trying to sell. Exports are becoming a much bigger part of the domestic coal landscape, and Peabody Energy has deals in place to get its cheaper coal from the Powder River and Illinois basins to India, China, and the EU. For investors looking to capitalize on a rebound in the U.S. coal market, The Motley Fool has authored a special new premium report detailing exactly why Peabody Energy is perhaps most worthy of your consideration. Don’t miss out on this invaluable resource — simply click here now to claim your copy today.

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Source: FULL ARTICLE at DailyFinance

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CAPScall of the Week: WPX Energy

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By Sean Williams, The Motley Fool

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For years, satirical late-night TV host Stephen Colbert has been running a series on his show called “Better Know a District,” which highlights one of the 435 U.S. congressional districts and its representative. While I am no Stephen Colbert, I am brutally inquisitive when it comes to the 5,000-plus listed companies on the U.S. stock exchanges.

That’s why I’ve made it a weekly tradition to examine one seldom-followed company within the Motley Fool CAPS database, and make a CAPScall of outperform or underperform on that company.

For this week’s round of “Better Know a Stock,” I’m going to take a closer look at WPX Energy .

What WPX Energy does
WPX Energy is an independent oil and gas exploration and production company, with wells in the Bakken and Marcellus shales, as well as the Piceance, Powder River, and San Juan basins. It also holds a majority interest in Apco Oil & Gas, which operates out of Argentina and Colombia. WPX‘s 2012 end reserves totaled 4.65 trillion cubic feet of natural gas equivalent including its overseas assets, and claimed a mixture of about 75% gas and 25% liquids (oil and natural gas liquids). 

In the fourth quarter, WPX reported 40% growth in oil production, 3% growth in natural gas liquid production, and 2% natural gas production growth during the quarter. However, WPX still lost $1.12 for the year as the company experienced a 22% decline in realized natural gas prices, and it wrote down $225 million in non-cash impairments because of the falling price of natural gas.

Whom it competes against
WPX has a triple threat it has to contend with: its competitors, the spot price for natural gas, and the rising costs of E&P.

As you might imagine, a finite amount of land available for exploration makes finding valuable natural gas and liquid assets quite the premium. According to my Foolish colleague Tyler Crowe, 12% of WPX’s assets are oil-based, of which many lie in the oil-rich Bakken Shale. This formation is known for its high-yielding oil reserves and is led by Continental Resources and EOG Resources . One smart tactic nearly all Bakken producers are using is shipping their oil production by rail to Louisiana terminals instead of selling it at the wellhead or in Cushing, Okla., because Brent prices at shipping terminals in Louisiana are paying out significantly more. In December, the North Dakota Pipeline Authority estimated that 64% of daily production was being shipped this way, which makes for plenty of extra profits for all involved — especially WPX, which saw oil production growth of 98% in the Bakken in the fourth quarter.

Realized natural gas prices can also be a friend or a foe, depending upon how you look at things. Chesapeake Energy , for example, leaned very heavily toward natural gas production as recently as early last year. However, weak natural gas prices necessitated a shift away from nat-gas drilling and production and toward Chesapeake’s more liquid-rich assets. …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

These 3 Energy Stocks Trounced the Market Today

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By Dan Dzombak, The Motley Fool

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Markets and energy prices were on the move today as fear rose over the economy after a weaker-than-expected private-sector jobs report. At 5:00 pm ET on Wednesday, the VIX was up 11.19%, Brent crude was down 3.04% to $107.32, and WTI crude was down 2.71% to $94.53. U.S. natural gas was up 1.61% to $3.90.

Today’s energy-stock leaders
Among U.S. companies with market caps greater than $500 million, today’s energy-stocks leader was Magnum Hunter Resources , up 3.15% to $3.93. Magnum was up more than 10% this morning, after the company announced an asset sale of its Eagle Ford Shale assets to Penn Virginia for $401 million. The assets include 19,000 net acres with 49 producing wells, seven wells drilled, and four currently being drilled. For March, the average daily production was 3,000 barrels of oil equivalent per day. Magnum plans on using the cash from the sale to pay down debt, which as of Sept. 30 stood at $680 million. The company is late in reporting its annual result for the year ended Dec. 31, after it identified material weaknesses in its internal controls. Investors should be wary of investing in a company that’s late in filing.

Second among energy stocks today was Arch Coal up 2.42% to $5.08, while in third was Peabody Energy , up 1.15% to $20.15. Coal stocks been crushed as environmental regulations pushed up the price of running coal plants and cheap natural gas provided an easy and cheaper alternative for power producers. Natural gas has taken significant market share in the U.S. power markets, and coal demand and prices have fallen as a result.

Weaker companies haven’t survived, with Patriot Coal, for one, going into bankruptcy. The company was spun off from Peabody Energy in 2007 and has been weighed down by $1.6 billion in retiree health benefits. As part of the spinoff, Peabody agreed to cover certain health-care costs for former Peabody employees. Patriot is suing Peabody to make sure that Peabody “does not attempt to use Patriot’s bankruptcy to escape Peabody’s own health care obligations to certain retirees.” Peabody argues that if Patriot’s obligations are lessened; then its own obligations are also lessened. Yesterday, Patriot asked the bankruptcy court to cap life insurance benefits and health-care coverage for its retirees. The company has 4,000 employees and 8,100 retirees.

Foolish bottom line
The coal industry in the United States has been in a state of flux since the arrival of a cheaper alternative for energy production: natural gas. Exports are becoming a much bigger part of the domestic coal landscape, and Peabody Energy has deals in place to get its cheaper coal from the Powder River and Illinois basins to India, China, and the EU. For investors looking to capitalize on a rebound in the U.S. coal market, The Motley Fool has authored a special new premium report detailing exactly why Peabody Energy is perhaps …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

2 Miners Dwarf Several States in Coal Production

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By Taylor Muckerman and Joel South, The Motley Fool

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Coal from the Appalachian region has really fallen out of favor in the United States. So much so that Wyoming mines accounted for nine out of the 10 top producing mines in 2012. This should come as no surprise to coal investors since the Powder River Basin is the most economically sensible coal to produce right now as compared to natural gas. CONSOL Energy , which produces coal in Appalachia, is a perfect example of what producers in that region have been forced to do — it has dedicated the bulk of its 2013 capital expenditures to natural gas production.

The two top mines are operated by Peabody Energy and Arch Coal , and together these mines accounted for 20% of total U.S. production. Why is this so important for these coal miners as they struggle to compete with natural gas? Tune in below. 

The coal industry in the United States has been in a state of flux since the arrival of a cheaper alternative for energy production: natural gas. Exports are becoming a much bigger part of the domestic coal landscape, and Peabody Energy has deals in place to get its cheaper coal from the Powder River and Illinois basins to India, China, and the EU. For investors looking to capitalize on a rebound in the U.S. coal market, The Motley Fool has authored a special new premium report detailing exactly why Peabody Energy is perhaps most worthy of your consideration. Don’t miss out on this invaluable resource — simply click here now to claim your copy today.

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Source: FULL ARTICLE at DailyFinance

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WPX Energy to Host May 2 Webcast

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By Business Wirevia The Motley Fool

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WPX Energy to Host May 2 Webcast

TULSA, Okla.–(BUSINESS WIRE)– WPX Energy (NYS: WPX) plans to report its first-quarter 2013 financial and production results before the market opens on Thursday, May 2.

Management will discuss the results and provide an update on the company’s operations during a webcast starting at 10 a.m. Eastern on the same day. Participants are encouraged to access the event and the corresponding slides at www.wpxenergy.com.

A limited number of phone lines also will be available at (866) 515-2907. International callers should dial (617) 399-5121. The conference identification code for both phone numbers is 99483783.

A replay of the first-quarter webcast will be available on WPX‘s website for one year following the event. Interviews with WPX‘s management about the company’s strengths, innovations and efficiencies also are available at www.wpxenergy.com.

About WPX Energy, Inc.

WPX Energy is an exploration and production company focused on developing its significant oil and gas reserves, particularly in the liquids-rich Piceance Basin, the Bakken and Three Forks oil shales and the Marcellus Shale. WPX also has domestic operations in the San Juan and Powder River basins, as well as a 69 percent interest in Apco Oil and Gas International. Go to http://www.wpxenergy.com/investors.aspx to join our e-mail list.

This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the company expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the company. Statements regarding future drilling and production are subject to all of the risks and uncertainties normally incident to the exploration for and development and production of oil and gas. These risks include, but are not limited to, the volatility of oil, natural gas and NGL prices; uncertainties inherent in estimating oil, natural gas and NGL reserves; drilling risks; environmental risks; and political or regulatory changes. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. The forward-looking statements in this press release are made as of the …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Vanguard Natural Resources, LLC Signs Announces Closing of Assets in the Permian Basin

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By Business Wirevia The Motley Fool

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Vanguard Natural Resources, LLC Signs Announces Closing of Assets in the Permian Basin

HOUSTON–(BUSINESS WIRE)– Vanguard Natural Resources, LLC (NYS: VNR) (“Vanguard” or “the Company”) today announced that on April 1, 2013 it consummated the previously announced acquisition of natural gas, oil and natural gas liquids assets in the Permian Basin located in southeast New Mexico and West Texas from two subsidiaries of Range Resources Corporation for an adjusted purchase price of $268.8 million, subject to customary final post-closing adjustments. The effective date of the acquisition is January 1, 2013.

The Company expects the following significant benefits from the acquisition:

  • Immediately accretive to distributable cash flow;
  • Company estimated proved reserves of approximately 137 Bcfe (78% proved developed with approximately 43% being natural gas, 25% oil and 32% NGLs);
  • Reserve to production ratio of approximately 20 years;
  • Current net production of approximately 17 MMcfe/d (41% natural gas) from 230 gross wells; and
  • Significantly hedged the expected natural gas and oil production for the next four years

The Company funded this acquisition with borrowings under its existing reserve-based credit facility.

About Vanguard Natural Resources, LLC

Vanguard Natural Resources, LLC is a publicly traded limited liability company focused on the acquisition, production and development of oil and natural gas properties. The Company’s assets consist primarily of producing and non-producing oil and natural gas reserves located in the Permian Basin in West Texas and New Mexico, the Big Horn Basin in Wyoming and Montana, the Arkoma Basin in Arkansas and Oklahoma, the Piceance Basin in Colorado, the Powder River and Wind River Basin in Wyoming, the Williston Basin in North Dakota and Montana, Mississippi and South Texas. More information on Vanguard can be found at www.vnrllc.com.

Forward-Looking Statements

We make statements in this news release that are considered forward-looking statements within the meaning of the Securities Exchange Act of 1934. These forward-looking statements are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Exporting the Future of Coal

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By Taylor Muckerman and Richard Engdahl, The Motley Fool

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Government policies and low natural gas prices have led to significant switchovers among utilities from coal to more cost-effective natural gas. Up to 20% of total coal-fired power generation is scheduled to be taken offline by 2017. This retracement has massively negative implications for the coal industry, which is why companies here have been concentrating so heavily on exports lately. China and India are leading the charge in the East, and Europe is holding its own because of the reverse dynamic there, with natural gas being more highly priced. Coal companies with the ability to export are therefore likely to stand apart from the pack.

For more details, check out the following video.

The coal industry in the United States has been in a state of flux since the arrival of a cheaper alternative for energy production: natural gas. Exports are becoming a much bigger part of the domestic coal landscape, and Peabody Energy has deals in place to get its cheaper coal from the Powder River and Illinois basins to India, China, and the EU. For investors looking to capitalize on a rebound in the U.S. coal market, The Motley Fool has authored a special new premium report detailing exactly why Peabody Energy is perhaps most worthy of your consideration. Don’t miss out on this invaluable resource — simply click here now to claim your copy today.

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Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Should You Jump on the Coal Train?

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By Taylor Muckerman and Richard Engdahl, The Motley Fool

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Coal companies have been beaten down ever since natural gas became more competitive. Utilities began switching over at alarming rates, and the coal companies that couldn’t curtail production or buoy their income statements with exports simply didn’t stand a chance. However, now that the price of natural gas has been steadily rising for a little over a month, some relief may be in sight for the low-cost producers in the Powder River and Illinois basins.

For more details, see the following video.

The coal industry in the United States has been in a state of flux since the arrival of a cheaper alternative for energy production: natural gas. Exports are becoming a much bigger part of the domestic coal landscape, and Peabody Energy has deals in place to get its cheaper coal from the Powder River and Illinois basins to India, China, and the EU. For investors looking to capitalize on a rebound in the U.S. coal market, The Motley Fool has written a special new premium report detailing exactly why Peabody Energy is perhaps most worthy of your consideration. Don’t miss out on this invaluable resource — simply click here now to claim your copy today.

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Source: FULL ARTICLE at DailyFinance

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Key Areas to Keep an Eye on at This Coal Leader

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By Taylor Muckerman, The Motley Fool

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Being the largest coal producer in the United States comes with its fair share of expectations. Peabody Energy is hoping that it can live up to those of its investors. Times have been trying for Peabody and its peers, considering that low-priced natural gas is taking over the domestic front as a substitute for thermal coal in electricity generation.

Are you wondering what to focus on?
The tide might be turning, especially for Peabody, which operates in the two cheapest coal producing regions in the United States: the Powder River and Illinois basins. What are some key areas that current and potential investors need to keep an eye on for Peabody to turn the corner?

The coal industry in the United States has been in a state of flux since the arrival of a cheaper alternative for energy production: natural gas. Exports are becoming a much bigger part of the domestic coal landscape, and Peabody Energy has deals in place to get its cheaper coal from the Powder River and Illinois basins to India, China, and the EU. For investors looking to capitalize on a rebound in the U.S. coal market, The Motley Fool has authored a special new premium report detailing exactly why Peabody Energy is perhaps most worthy of your consideration. Don’t miss out on this invaluable resource — simply click here now to claim your copy today.

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Source: FULL ARTICLE at DailyFinance

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Will "King Coal" Benefit From Rising Natural Gas Prices?

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By Taylor Muckerman and Joel South, The Motley Fool

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There’s been nowhere for coal companies to hide ever since the price of natural gas fell off a cliff as 2012 approached. Coal companies have been waiting for an inflection point and are hoping it’s finally arrived, as natural gas prices close in on $4 per million BTU.

At this price, coal in both the Powder River and Illinois basins should now be economically viable for utilities to use. Peabody Energy is a leading producer in both regions, so any continuation in natural gas’ price momentum will add to coal’s resurgent competitiveness. 

Why focus solely on the North American market? That’s a question Peabody asked itself a while back, and it’s clear they couldn’t come up with a reason. Record exports from the U.S. in 2012 helped buoy the company’s financial performance, and if it can combine a growing Asian market with increased U.S. demand, investors could finally start to be rewarded.

The Fool’s Taylor Muckerman has more in the following video.

Exports and low-cost domestic production will determine Peabody’s fate
The coal industry in the United States has been in a state of flux since the drop in natural gas prices. Exports are becoming a much bigger part of the domestic coal landscape, and Peabody Energy has deals in place to get its cheaper coal from the Powder River and Illinois basins to India, China, and the EU. For investors looking to capitalize on a rebound in the U.S. coal market, The Motley Fool has written a special new premium report detailing why Peabody Energy is perhaps most worthy of your consideration. Don’t miss out on this invaluable resource — simply click here now to claim your copy today.

var FoolAnalyticsData = FoolAnalyticsData || []; FoolAnalyticsData.push({ eventType: “TickerReportPitch”, contentByline: “Taylor Muckerman and Joel South“, contentId: “cms.26132”, contentTickers: “NYSE:BTU, NYSE:KMP, NASDAQ:JRCC”, …read more
Source: FULL ARTICLE at DailyFinance

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Vanguard Natural Resources, LLC Announces Monthly Distribution

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By Business Wirevia The Motley Fool

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Vanguard Natural Resources, LLC Announces Monthly Distribution

HOUSTON–(BUSINESS WIRE)– Vanguard Natural Resources, LLC (NYS: VNR) (“Vanguard”) announced today that its board of directors has declared a cash distribution attributable to the month of February 2013 of $0.2025 per unit ($2.43 on an annual basis) payable on April 12, 2013 to unitholders of record on April 1, 2013. New investors can earn an approximate 8.6% yield based on the March 20, 2013 closing price of $28.14 per unit.

About Vanguard Natural Resources, LLC

Vanguard Natural Resources, LLC is a publicly traded limited liability company focused on the acquisition, production and development of oil and natural gas properties. The Company’s assets consist primarily of producing and non-producing oil and natural gas reserves located in the Permian Basin in West Texas and New Mexico, the Big Horn Basin in Wyoming and Montana, the Arkoma Basin in Arkansas and Oklahoma, the Piceance Basin in Colorado, the Powder River and Wind River Basin in Wyoming, the Williston Basin in North Dakota and Montana, Mississippi and South Texas. More information on Vanguard can be found at www.vnrllc.com.

Forward-Looking Statements

We make statements in this news release that are considered forward-looking statements within the meaning of the Securities Exchange Act of 1934. These forward-looking statements are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management’s assumptions about future events may prove to be inaccurate. Management cautions all readers that the forward-looking statements contained in this news release are not guarantees of future performance, and we cannot assure you that such statements will be realized or the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to factors listed in the “Risk Factors” section in our SEC filings and elsewhere in those filings. All forward-looking statements speak only as of the date of this news release. We do not intend to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise.

…read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

3 Reasons to Sell This Coal Giant

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By Taylor Muckerman, The Motley Fool

Several headwinds have cropped up in the coal market here in the United States over the past year or two. Even though Peabody Energy appears to be head and shoulders above its direct coal competitors, these issues have taken their toll on the company’s recent performance. Determining whether these issues will abate or continue is critical when analyzing this company for investment purposes. A few of the reasons are detailed in the following video and include:

  • The continued suppression of natural gas prices.
  • Possible exportation of LNG on a meaningful scale.
  • Overall negative perception of the coal industry because of possible environmentally damaging effects.

Can Peabody overcome these potential gravitational forces?
The coal industry in the United States has been in a state of flux since the arrival of a cheaper alternative for energy production: natural gas. Exports are becoming a much bigger part of the domestic coal landscape, and Peabody Energy has deals in place to get its cheaper coal from the Powder River and Illinois basins to India, China, and the EU. For investors looking to capitalize on a rebound in the U.S. coal market, The Motley Fool has written a special new premium report detailing why Peabody Energy is perhaps most worthy of your consideration. Don’t miss out on this invaluable resource — simply click here now to claim your copy today.

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Source: FULL ARTICLE at DailyFinance

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3 Reasons to Buy Peabody Energy

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By Taylor Muckerman, The Motley Fool

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The entire coal market has been beaten down over the last year due to punishingly low natural gas prices in the domestic market. While the overall market dynamics might have lead investors to shy away from coal producers, there are certainly several reasons why Peabody Energy could be a positive investment choice:

  1. The rapidly growing export market for coal
  2. Its high-margin Australian operation’s proximity to China and India
  3. Its market-leading position in the best basins in the U.S.

There’s more to know about Peabody Energy than just these three strengths:
The coal industry in the United States has been in a state of flux since the arrival of a cheaper alternative for energy production: natural gas. Exports are becoming a much bigger part of the domestic coal landscape, and Peabody Energy has deals in place to get its cheaper coal from the Powder River and Illinois basins to India, China, and the EU. For investors looking to capitalize on a rebound in the U.S. coal market, The Motley Fool has authored a special new premium report detailing exactly why Peabody Energy is perhaps most worthy of your consideration. Don’t miss out on this invaluable resource — simply click here now to claim your copy today.

var FoolAnalyticsData = FoolAnalyticsData || []; FoolAnalyticsData.push({ eventType: “TickerReportPitch”, contentByline: “Taylor Muckerman”, contentId: “cms.23223”, contentTickers: “NYSE:ACI, NYSE:BTU, NYSE:KMP, NASDAQ:JRCC, NYSE:CLD”, contentTitle: “3 Reasons to Buy Peabody Energy“, hasVideo: “True”, …read more
Source: FULL ARTICLE at DailyFinance

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The Contrarian Energy MLP

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By Tyler Crowe, The Motley Fool

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With natural gas prices falling, we’ve seen several companies try to move their portfolios more toward liquids. Vanguard Natural Resources is going in the opposite direction. What does this company see that the others don’t? Let’s look at this company bucking the industry trend and see what it means for investors.

You say goodbye (to gas), and I say hello
The best way to understand the contrarian approach of Vanguard is to look at Chesapeake Energy . Before the natural gas boom, Chesapeake had gobbled up millions of acres in these emerging shale plays. Then, when natural gas prices sank in 2012, the value of these assets tumbled and the company struggled to service its debt load. So Cheaspeake has gone to great lengths to change its drilling strategy toward a more liquids approach, which is starting to pay off. Chesapeake has increased its liquids produciton by more than 41,000 barrels of oil equivalent in 2012.

Then you have Vanguard. Before 2011, the company was highly leveraged to oil production in mature, proven fields and was producing only 35% natural gas. With so many companies looking to offload their gas assets based on current prices, Vanguard has been a buyer. In 2012, it purchased more than $760 million in assets from both Antero Resources and Bill Barrett in the Arkoma, Piceance, Wind, and Powder River basins. The combination of these two purchases increases Vanguard’s natural gas production to about 65% of total production in 2013.

Why does this make sense? Simply put, the purchase price. These assets were purchased when the market value for natural gas was at its near lows, so the price to produce from them is much lower. Lease operating expenses for Vanguard dropped from $17 per Boe in the fourth quarter 2011 to just over $9 per Boe at the end of 2012. This means the company generates a return at lower natural gas prices. 

Echoes of another MLP?
Since the end of the previous quarter, Vanguard has come to an agreement with Range Resources to purchase $275 million of producing assets in the Permian Basin. This would make for just over a billion in purchases over the past 12 months. According to the company’s most recent conference call, that pace may not slow either. Vanguard’s management hinted that it expects to close on as many deals as in 2012, potentially even more.

Its pace of acquisitions is reminiscent of another exploration and production MLP: Linn Energy . With such a similar appetite for acquisitions, it makes it a little less surprising that Vanguard has stated that it’s considering a move similar to Linn’s spin-off of LinnCo . This move not only allowed Linn to generate a large chunk of capital to fund some of its investments, but it also gave the company a vehicle for institutional investors to invest in the company. As of right now, Vanguard’s management believes that it can fund most of its acquisitions through more conventional methods. In the event that it plans to start going after …read more
Source: FULL ARTICLE at DailyFinance