Cloud Peak Energy Enters Amendment to Transportation Agreement with BNSF to Address Depressed International Conditions
Cloud Peak Energy Inc. (NYSE:CLD), one of the largest U.S. coal
producers and the only pure-play Powder River Basin (“PRB”) coal
company, today announced that Cloud Peak Energy Logistics LLC entered
into an amended transportation agreement with BNSF Railway Company to
eliminate both parties’ volume obligations for the period 2016 through
2018 in exchange for a series of payments.
Under the amended agreement, Cloud Peak Energy made an upfront payment
to BNSF and has the right to make payments from 2016 through 2018
replacing the previous take-or-pay commitments during this three-year
period. The aggregate reduction in potential payments if we do not ship
any export tons during this three-year period is substantially
comparable to the reduction under the export terminal throughput
amendment announced in October 2015 by Cloud Peak Energy. Except as
amended, the original transportation agreement remains in place through
the end of 2024.
The parties will continue to meet regularly going forward to discuss
market conditions and any potential shipments and the terms for any
shipments. If export shipments do not occur, it is expected that Spring
Creek Mine production volumes will be reduced accordingly.
“We appreciate our constructive relationship with BNSF and their
willingness to work with us in recognition of current extremely
depressed international prices,” said Colin Marshall, Cloud Peak
Energy’s President and Chief Executive Officer.
About Cloud Peak Energy®
Cloud Peak Energy Inc. (NYSE:CLD) is headquartered in Wyoming and is one
of the largest U.S. coal producers and the only pure-play Powder River
Basin coal company. As one of the safest coal producers in the nation,
Cloud Peak Energy mines low sulfur, subbituminous coal and provides
logistics supply services. The Company owns and operates three surface
coal mines in the PRB, the lowest cost major coal producing region in
the nation. The Antelope and Cordero Rojo mines are located in Wyoming
and the Spring Creek Mine is located in Montana. In 2014, Cloud Peak
Energy shipped approximately 86 million tons from its three mines to
customers located throughout the U.S. and around the world. Cloud Peak
Energy also owns rights to substantial undeveloped coal and
complimentary surface assets in the Northern PRB, further building the
Company’s long-term position to serve Asian export and domestic
customers. With approximately 1,600 total employees, the Company is
widely recognized for its exemplary performance in its safety and
environmental programs. Cloud Peak Energy is a sustainable fuel supplier
for approximately four percent of the nation’s electricity.
Cautionary Note Regarding Forward-Looking Statements
This release contains “forward-looking statements” within the meaning of
the safe harbor provisions of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements are not statements of historical facts and often contain
words such as “may,” “will,” “expect,” “believe,” “anticipate,” “plan,”
“estimate,” “seek,” “could,” “should,” “intend,” “potential,” or words
of similar meaning. Forward-looking statements are based on management's
current expectations and beliefs as well as assumptions and estimates
regarding our company, industry, economic conditions, government
regulations, energy policies and other factors. Forward-looking
statements include the timing and volumes of any future Asian export
shipments, potential Spring Creek Mine production volumes and
reductions, market conditions and growth opportunities for Asian exports
of Powder River Basin coal and other statements regarding the expected
benefits of this transaction and our plans, strategies, prospects and
expectations concerning our business, industry, economic conditions,
operating results, financial condition and other matters that do not
relate strictly to historical facts. These statements are subject to
significant risks, uncertainties, and assumptions that are difficult to
predict and could cause actual results to differ materially and
adversely from those expressed or implied in the forward-looking
statements, including government energy and tax policies and the
political and regulatory environment impacting coal-fired generation and
exports of U.S. thermal coal, economic and industry conditions, demand
by Asian utilities for our coal and competition from other producers of
coal and sources of electricity generation, Newcastle benchmark prices
and prices we receive for delivered export sales, rail and terminal
performance and availability required to deliver our export tons,
demurrage costs, the impact of future take-or-pay commitments and other
factors. For a discussion of some of the additional factors that could
adversely affect our future results or the anticipated benefits of this
transaction, refer to the risk factors described from time to time in
the reports and registration statements we file with the Securities and
Exchange Commission (“SEC”), including those in Item 1A - Risk Factors
in our most recent Form 10-K and any updates thereto in our Forms 10-Q
and current reports on Forms 8-K. There may be other risks and
uncertainties that are not currently known to us or that we currently
believe are not material. We make forward-looking statements based on
currently available information, and we assume no obligation to, and
expressly disclaim any obligation to, update or revise publicly any
forward-looking statements made in this release, whether as a result of
new information, future events or otherwise, except as required by law.
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