The New York Stock Exchange suspended trading in Cloud Peak Energy on Tuesday due to the Gillette-based coal company’s sustained low stock price.
Cloud Peak Energy was warned in December that the exchange would delist the firm if the stock price — which had been trading under $1 per share for 30 days — didn’t improve within six months. The firm chose not to pay a recent debt payment, which if not paid within 30 days will place the company in default. The choice has been noted as a potential precursor to a bankruptcy filing.
Cloud Peak was trading at just 16 cents per share Tuesday.
A call to the company’s spokesman for comment was not immediately returned.
Cloud Peak operates the Antelope and Cordero Rojo mines in Wyoming and the Spring Creek mine in Montana. It employs about 20 percent of the full-time miners in Wyoming’s Powder River Basin coal sector.
Cloud Peak has been increasingly unstable in the face of higher costs and operational challenges. Its margins — the revenue remaining after production costs have been subtracted — fell dramatically from $2.30 per ton in 2017 to 92 cents per ton in 2018.
Production volumes at each of its mines slid in that time as well. Its highest quality Wyoming mine, Antelope near Wright, decreased production by about 5 million short tons from 2017 to 2018, while the lower quality Cordero Rojo to the north declined by 4 million short tons. Cloud Peak’s margins are likely improved somewhat by export tons out of its Montana mines.
The firm was the only publicly traded coal company operating in Wyoming’s Powder River Basin to avoid bankruptcy in the recent downturn. Cloud Peak had entered the skyrocketing metallurgical coal market before Asian demand assumptions crumbled. Though victim to the same shrinking thermal coal market domestically as companies like Peabody Energy and Arch Coal, Cloud Peak did not face bankruptcy or layoffs in Wyoming and did not benefit from the debt slashing of that process.
Bankruptcy may be in the near term for Cloud Peak. The firm announced that it had hired advisers in November to contemplate options like sale and Chapter 11 restructuring. It’s also taken cost-saving measures like cutting retiree health benefits and laying off some personnel.