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   Non-TechUAN - The variable distribution MLP that could go a long way


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From: Elroy5/2/2023 11:22:07 AM
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UAN Q1 2023 call key item notes:

Combined plants achieved record production in Q1 2023.

He reiterated that most of Q2 ammonia pre-sold in Q4 last year before ammonia prices dropped. So I think Q2 ammonia realized price per ton should be well above current market prices.

There wasn't a lot of meaningful near term information other than that.

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From: Elroy5/2/2023 8:09:54 PM
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CVI is CVR parent company. Here are some fertilizer comments from the CVI conference call.

seekingalpha.com

Over the next two years, we plan to invest some additional capital in the fertilizer plants, intended to further improve their reliability, lower their carbon footprint and prepare for potential capacity expansions in one or both facilities. We are also continuing to evaluate the potential transaction to spin off our GP and LP interests in CVR Partners, and I look forward to providing you additional details at the appropriate time.

If we do the spin-off, I think we’ll have to look at the dividend again because that’s just the effect of doing the spin-off. No idea what this means.....

---

on the monetization of the tax credits at UAN, how do those work in general? And how do you -- how do they impact future cash flows at UAN in terms of what you’re giving up? And then, following the $19 million payment in 1Q, how should we think about the potential for future payments and timing there?

Dane Neumann

Yes. I’ll take this one. So really, what we had in place previously was an existing CO2 sales contract with a counterparty. And we ended up contributing that sales contract to a JV with the same counterparty. And as a result, it allows the tax equity investor to claim those credits that we’re receiving for the sequestration activity. So what occurred is the contract was deemed a value of $46 million. We put that as deferred revenue on our balance sheet and recognized an equity method investment of $46 million. The cash receipt of $19 million, it was $18 million net of fees, was really just the first payment in the string of payments we expect to receive associated with the JV. And that payment drew down some of the equity method investment.

On a go-forward basis, we will recognize that deferred revenue off our balance sheet into other income for our Fertilizer segment, call it $1 million, $1.5 million each quarter. And there will be periodic payments each quarter as well as opportunity for milestone payments annually.

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To: Elroy who wrote (779)5/2/2023 8:41:11 PM
From: Elroy
   of 811
 
CF conference call notes about ammonia and UAN fertilizer.

So product is tight. We don't believe there's going to be enough urea. We believe that they will have to be migrating for second and third applications to ammonia and UAN, and we're preparing for that with positioning product throughout the system. And pricing has extended from the normal spread of NOLA, let's say, $30 to the Midwest, it's between $50 and $100 today and will probably go up towards the higher end as we get to peak applications.

the retail sector, I think, has reflected -- prices were falling. I understand that if they bought $500 UAN and the market is now $300, how do they price that to the farmer. And the farmer is reading some of the same materials in -- whether that's the publications or online. And so there's a standoff. What is an appropriate price at the retail level, what should the farmer be paying. And so in effect, they said, I'm going to stop buying because the farmers stopped buying.

Current prevailing prices in the spot market today tend to be a bit below where our average prices were in Q1 as reported.

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From: Elroy5/18/2023 3:23:36 PM
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Well, I've given up and either sold or written deep in the money covered calls on all my UAN units.

While it's probably going to be a good distribution payer for a while, the possibility that fertilizer prices just continue to decline, resulting in unit price decline equal to or greater than the distributions, is what has me concerned. I don't undestand why fertilizer prices plunged from November 2022 to today, in the face of the highest demand planting season approaching (it's ongoing now). If planting crops can't keep fertilizer prices high, then I don't know what will.

I may be dumping at too close to a low, but the low demand Q3 is just around the corner, and if fertilizer prices decline before planting season, I don't want to wait and see what the do in the slow Q3 season.

I hope I'm wrong!

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To: Elroy who wrote (781)5/20/2023 1:44:03 AM
From: Area51
1 Recommendation   of 811
 
The corn chart has been tanking badly the last several days/weeks. But we had that nasty decline last summer to 5.60 also (this decline to $5.50 ish so far). I'm hoping this decline resolves similarly or at least corn stabilizes above $5. $5 corn may support $300 UAN, $600 NH3 in the heartland where CVR sells which is good for $20 a year distributions? If it heads below $5 then I'll either panic or do some controlled selling to manage my loses (depending on my mood and the rate of decline at that point).

macrotrends.net

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From: Elroy5/24/2023 11:44:30 AM
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DTN Retail Fertilizer Trends
Most Fertilizer Prices Lower Again Third Week of May 2023


https://www.dtnpf.com/agriculture/web/ag/crops/article/2023/05/24/fertilizer-prices-lower-third-week

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From: Elroy6/7/2023 11:51:36 PM
1 Recommendation   of 811
 
The CME UAN NOLA futures quotes aren't pretty......

cmegroup.com

I think Q3 monthly quotes may decline over the next few weeks as the markets does price discovery for "summer fill" prices. I don't think UAN stock price does well until fertilizer future prices find a bottom.

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From: Elroy6/13/2023 4:53:32 PM
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CVR Energy Provides Update to Potential Spin-Off of its Fertilizer Business, Remains Focused on Renewables Opportunities

finance.yahoo.com

“Following thoughtful and careful analysis, the Board concluded that the complexity of a transaction that could accomplish both goals may not deliver the appropriate value under current conditions. We will continue to explore ways to capitalize on the unique assets of each of CVR Energy and CVR Partners, particularly within the Coffeyville complex, including their proximity to the farm belt, excess hydrogen capacity and existing CO2 sequestration capabilities.

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From: Elroy6/14/2023 11:34:44 PM
   of 811
 
DTN Retail Fertilizer Trends
Anhydrous Leads Retail Fertilizer Prices Lower, Drops to $787 Per Ton


https://www.dtnpf.com/agriculture/web/ag/crops/article/2023/06/14/anhydrous-leads-retail-fertilizer

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From: Elroy6/21/2023 5:07:47 PM
   of 811
 
DTN Retail Fertilizer Trends
Anhydrous, UAN32 Lead Fertilizer Prices Lower


https://www.dtnpf.com/agriculture/web/ag/crops/article/2023/06/21/anhydrous-uan32-lead-fertilizer


Anhydrous was 13% lower compared to the prior month, and the nitrogen fertilizer had an average price of $781 per ton. UAN32 was 8% less expensive than last month with an average price of $476/ton.

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