More profitable to sell the input energy than to run the plant. Anyone know if fertilizer futures exist?
ARTICLE 1:
Terra Nitrogen Company, L.P. Sells Portion of Its December Natural Gas, Curtails Production
SIOUX CITY, Iowa, Dec. 11 /PRNewswire/ --
Terra Nitrogen Company, L.P. (NYSE symbol: TNH - news; TNCLP) reported today that it has idled for December its Blytheville, Ark. facility and one half of its Verdigris, Okla. facility due to the sudden and unexpected increase in natural gas prices. The costs to maintain these facilities during December will be exceeded by gains resulting from derivative financial instruments executed in prior months to fix the price of a portion of TNCLP's December natural gas requirements and from the sale of natural gas. The idled capacity represents 64%, 50% and 100% of TNCLP's total ammonia, UAN and urea manufacturing capacity, respectively. The facilities will restart when natural gas and nitrogen prices reach levels allowing positive cash flows from the facilities.
Terra Nitrogen Company, L.P. is a leading manufacturer of nitrogen fertilizer products.
Information contained in this news release, other than historical information, may be considered forward looking. Forward-looking information reflects management's current views of future events and financial performance that involve a number of risks and uncertainties. The factors that could cause actual results to differ materially include, but are not limited to, the following: changes in financial markets, general economic conditions within the agricultural industry, competitive factors and price changes (principally nitrogen selling prices and natural gas costs), changes in product mix, changes in the seasonality of demand patterns, changes in weather conditions, changes in governmental regulations and other risks described in the ``Factors That Affect Operating Performance'' section of TNCLP's current annual report.
ARTICLE 2:
Mississippi Chemical Announces Pre-Tax Gain of $16 Million On Sale of Natural Gas Futures Contracts
YAZOO CITY, Miss.--(BUSINESS WIRE)--Dec. 11, 2000--Mississippi Chemical Corporation (NYSE:GRO - news) today announced the sale of all of its natural gas futures contracts in order to take advantage of the opportunity provided by the unprecedented high prices for natural gas.
Most of the Company's futures positions were for the month of January, with a lesser amount in subsequent months. As a result of the transaction, the Company will realize a pre-tax gain of $16 million in its second fiscal quarter ended December 31, 2000.
``We remain committed to the nitrogen business and our customers, but we also have to take advantage of opportunities to optimize cash flow during these challenging times. It is our belief that the current unprecedented natural gas prices are unlikely to be sustained during the intermediate term,'' Charles O. Dunn, President and CEO said. ``As a result, we felt it was in the Company's best interest to sell our futures positions to lock in the substantial gain afforded by the recent increase in natural gas prices. Going forward, we will continue to determine operating levels for our plants based on the relationship between natural gas prices, nitrogen product prices and our customers' requirements, as we have been doing for some time.''
Mississippi Chemical Corporation, through its wholly owned subsidiaries, produces and markets all three primary crop nutrients. Nitrogen, phosphorus and potassium-based products are produced at facilities in Mississippi, Louisiana and New Mexico and through a joint venture in The Republic of Trinidad and Tobago.
Except for the historical statements and discussion contained herein, statements set forth in this news release constitute ``forward-looking statements.'' These forward-looking statements rely on a number of assumptions concerning future events and other uncertainties that are beyond the company's ability to control. Readers are cautioned that actual results may differ materially from the forward-looking statements. The company's Annual Report on Form 10-K for the fiscal year ended June 30, 2000, which is on file with the Securities and Exchange Commission, identifies important factors which could cause actual results to differ materially from those indicated in the forward-looking statements. These factors include, but are not limited to, a variety of items that can materially affect fertilizer demand such as planted acreage, government agricultural policies, projected grain stocks, crop failure, weather, changes in agricultural production methods and status of certain industrial markets and the general economy; seasonal usage of fertilizer; environmental regulations; price competition from both domestic and foreign competitors and possible delays or other problems in obtaining production, anticipated efficiencies and/or lower production costs from or as a result of expanded facilities. Another factor is the Company's dependence on natural gas and the volatility of natural gas prices. |
