Laserfiche WebLink
Case 16-42529 Doc 28 Filed 04/13/16 Entered 04/13/16 11:32:40 Main Document <br />Pg3of31 <br />mines produce and sell thermal coal, which is primarily purchased by electricity generators. <br />PEC's Australian operations mine both thermal and metallurgical coal, a majority of which is <br />exported to international customers. As of December 31, 2015, Debtor PEC and its subsidiaries' <br />property holdings include 6.3 billion tons of proven and probable coal reserves and <br />approximately 500,000 acres of surface property through ownership and lease agreements. In <br />the United States alone, as of December 31, 2015, the Debtors held an estimated 5.5 billion tons <br />of proven and probable coal reserves, and the Debtors generated sales of approximately 180 <br />million tons of coal. In addition to its mining operations, the Debtors market and broker coal <br />from other coal producers across the United States, Australia, Europe and Asia. <br />The Debtors operate in a competitive and highly regulated industry that has <br />experienced strong headwinds and precipitously declining demand and pricing in recent years <br />due to the rise of low priced alternative energy sources — including an abundance of natural gas. <br />Combined with these factors, slowing global economic growth drove a wide range of goods <br />prices lower in 2015 and resulted in the largest broad market decline since 1991. Indeed, <br />demand from electric utilities in the United States alone declined approximately 110 million tons <br />in 2015. These market conditions, in connection with lower realized pricing in the United States <br />and Australia, resulted in a 21.0 million ton decline in the Debtors' and their non -debtor <br />subsidiaries' coal sales during 2015. As a result of these challenges, several large United States <br />coal companies have filed for chapter 11 protection in recent years. <br />6. A comprehensive description of the Debtors' businesses and operations, capital <br />structure and the events leading to the commencement of these chapter 1 1 cases can be found in <br />the Declaration of Amy Schwetz, Executive Vice President and Chief Financial Officer of <br />Debtor PEC, in Support of First Day Motions of Debtors and Debtors in Possession <br />-3- <br />