Bowie Resources works out new debt facility with White Oak Global

Bowie Resources LLC, the operator of the Bowie No. 2 longwall mine in Colorado, announced March 26 that it recently completed a $62m debt financing with White Oak Global Advisors LLC of San Francisco.

The proceeds of the new credit facility were used to retire the senior secured debt provided to Bowie by Mercuria Energy Trading in 2011, as well as to redeem other Mercuria-related positions.

John Siegel, a Bowie principal, said: “White Oak’s investment strategy seemed to be a congruent fit for us given our mission to grow our production footprint in the western bituminous coal region, and elsewhere.  We are excited to welcome White Oak as our new lender and partner and we are convinced that White Oak will be an invaluable associate as we seek to expand the Bowie brand.”

Siegel added: “Our relationship with Mercuria remains strong and we are grateful for all that Mercuria did to help Bowie return to the level of excellence and longwall productivity and dependability that had been its hallmark for the better part of the last decade.  We will continue to work with Mercuria, and others, in an effort to seek new markets, especially export customers.” 

Bowie currently owns a longwall operation in Delta County, Colo., which produces super-compliance, low-sulfur bituminous coal. Bowie’s largest customer, the Tennessee Valley Authority, currently takes three million tons per year under a multi-year contract. Bowie also has an arrangement involving Metropolitan Stevedore Co., in conjunction with Mercuria, for export capacity at the Port of Stockton in Stockton, Calif. Through this agreement, Bowie currently has annual throughput capacity at Stockton of 1 million tons and hopes to increase that capacity significantly by mid-2014. Siegel added: “We also continue to work on additional west coast throughput capacity opportunities.”

Bowie’s affiliate company, Bowie Refined Coal LLC, recently completed the acquisition of ten qualified §45 Refined Coal Facilities from Headwaters Inc. of Salt Lake City, Utah. 

White Oak, an SEC-registered investment advisor established in 2007, is the investment manager to various investment funds and separately managed accounts. White Oak’s primary investment strategies are direct-lending, liquid credit investing, and cash management.

The Bowie No. 2 operation, located in Delta County, Coloo., was developed in the late 1990s by coal operator Larry Addington, who later lost the operation in a bankruptcy sale involving Addington’s Horizon Natural Resources affiliate. The mine late last decade ran into problem geology in the northeast reserve area, slashing production over a multi-year period, with a move in 2011 to the southwest area of the reserve, which has more friendly geology. The aim is to get the mine back up to about 5 million tons per year of production.

U.S. Mine Safety and Health Administration data shows that Bowie No. 2 produced 3.4 million tons in 2012, 2.2 million tons in 2011, 1.3 million tons in 2010 and 1.2 million tons in 2009. Its peak yearly production in the 2000-2012 period was 5.5 million tons in 2007, which was just before the geology problems set in.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.