While this is not the big coal lease, that one is from Barbra Evans, I think this is the start of a disaster for the common shareholders.
While I was wrong about their being NO revenue for the company, since they were paid $77,000 for wheelage rights to take coal from the Smith lease (about 189 acres) for December 2012, it was the last month that any coal is being taken from the Smith lease. The trustee lost the lease because there are not coal operations on the lease and there is no way to economically mine the coal there (and keep the lease) because of the low prices plus they do not have the equipment to do it. The company that was mining coal on the lease was able to do it because they had mining operations on a nearby property but have since stopped mining there and moved the equipment elsewhere. Without that company, it looks like there will be no more mining on any of AENYQ leases plus the company has to pay for land reclaiming, which I expect will cost at least a few hundred thousand or more.
Unless the coal leases somehow become valuable, I expect the common stock is worthless and that some of the creditors may take a 'haircut' on their claims.
While the company has filed and is in a chpater 11 plan, it looks like to me that everything is going to be sold off, the creditors paid off and the coal leases revert back to the original owners since nothing is being mined. At that point, I expect there will be nothing left over for a distribution to the common stockholders.
The only hope I see for the common stock is that somehow natural gas prices rise and that allows coal prices to rise to the point where the coal can be mined at a profit. Unfortunately, it looks like the stockpile of natural gas is higher this year than it was at the same point last year (last few weeks of Barron's magazine reporting this as I recall) plus right now we are having weather that is warmer than normal in the Northeast. In Worcester, MA it is expect to be in the low 40s today and Saturday in the 50s, none of which is going to cause natural gas prices to go up and allow the coal prices to go up so it can be mined at a profit.
Louis J. Desy Jr.
LouisDesyjr@gmail.com
Disclosure: I do not own any stock in this company and will not be buying any based upon the information released so far.
