- Current report filing (8-K)
May 01 2009 - 5:11PM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of
earliest event reported):
April 28,
2009
CLEAN
ENERGY FUELS CORP.
(Exact Name of Registrant
as Specified in Charter)
Delaware
(State or Other
Jurisdiction of
Incorporation)
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001-33480
(Commission File Number)
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33-0968580
(IRS Employer Identification
No.)
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3020
Old Ranch Parkway, Suite 400 Seal Beach, California
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90740
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(Address of Principal Executive Offices)
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Zip Code
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(562)
493-2804
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions (see General Instruction A.2.
below):
o
Written communications pursuant to
Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o
Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
8.01. Other Information.
On April 28,
2009, we purchased certain natural gas futures contracts, which we refer to as
the futures contracts, to attempt to hedge our exposure to cash flow
variability related to the fixed-price component of two liquefied natural gas
(LNG) supply contracts for which we have submitted fixed-price bids. We have not been awarded the contracts;
however, based on information released by the potential customers, we believe
we have submitted the lowest price in the competitive bidding process. We have also received a staff recommendation
supporting our bid for the larger of the two contracts. If we are awarded the supply contracts,
performance is anticipated to begin on July 1, 2009 and September 6,
2009, respectively. While we have not
received notification that we have been awarded the contracts, due to the fact
that the contract prices are fixed, as well as the fact that we believe natural
gas prices may rise between now and the time we might be awarded the contracts,
the derivative committee of our board of directors concluded it was advisable
to purchase the futures contracts in advance of any contract award. The futures contracts have the effect of
enabling us to purchase natural gas at fixed prices each month from July 2009
through August 2012, which is the expected fixed-price term of the
potential supply contracts. One of the
supply contracts calls for the sale of approximately 12,000,000 LNG gallons
annually for all three years of the contract, and the other supply contract
calls for the sale of approximately 700,000 LNG gallons in the first year,
500,000 LNG gallons in the second year and 300,000 LNG gallons in the third
year of the contract. The futures
contracts cover the purchase of an average of approximately 80,000 MMBtus of
natural gas per month to hedge against the fixed price LNG delivery
obligations. To purchase the futures
contracts, we were required to make an initial margin deposit of
$1,236,000. We may be required to make additional deposits if we incur
losses related to the futures contracts.
The purchase of
the futures contracts was in accordance with the revised natural gas hedging
policy adopted by our board of directors in May, 2008, a complete copy of which
was filed as Exhibit 99.1 to our Form 8-K filed with the SEC on June 20,
2008, and is incorporated herein by reference.
Until such time as
we are awarded and enter into the supply contracts, we do not anticipate trying
to qualify the futures contracts for hedge accounting as cash flow hedges under
SFAS No. 133. As a result, we will
be required to record directly in our statement of operations any changes in
the fair market value of these contracts that may occur from April 28,
2009 through the earlier to occur of (1) our entry into the fixed-price
supply contracts and success in qualifying the futures contracts for hedge
accounting under SFAS No. 133, or (2) the sale of the futures
contracts. Until such time as the
futures contract qualify for hedge accounting as cash flow hedges under SFAS No. 133,
an increase or decrease of 10% in the weighted average price of the futures
contracts would result in a gain or loss, respectively, of approximately $1.8
million in the fair market value of the futures contracts.
If we are awarded
and enter into the supply contracts, (1) we will attempt to qualify the
futures contracts for hedge accounting as cash flow hedges under SFAS No. 133,
but there can be no assurances we will be successful in doing so, and (2) we
anticipate that we will hold the futures contracts for the duration of the relevant
contract term consistent with the revised natural gas hedging policy adopted by
our board of directors in May 2008. If we are not awarded or fail to
enter into either supply contract, we intend to sell the futures contracts
related to such supply contract in an orderly fashion.
We purchased the
futures contracts from Sempra Energy Trading Corp. pursuant to the terms of the
ISDA Master Agreement dated March 23, 2006 between us and Sempra,
including the ISDA Credit Support Index to the Schedule to the ISDA Master
Agreement dated March 23, 2006, which documents are attached as
Exhibits 10.13 and 10.14, respectively, to the Form S-1 Registration
Statement (File No. 333-137124) we filed with the SEC on September 6,
2006. These documents are incorporated herein by reference.
2
Special
Note Regarding Forward-Looking Statements
Certain statements
in this current report on Form 8-K constitute forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. The forward-looking statements include,
but are not limited to, statements about: (i) whether the futures
contracts will qualify for hedge accounting as cash flow hedges under SFAS No. 133
and the related impact on our financial statements; (ii) whether we will
be awarded the natural gas supply contracts for which we have submitted
fixed-price bids; (iii) whether we have submitted the lowest priced bid in
the competitive bidding process; (iv) the anticipated commencement dates
of the supply contracts; (v) the expected fixed-price term of the supply
contracts; (vi) the potential requirement to make additional deposits on
the futures contracts if we incur losses related to the futures contracts; (vii) the
projected gain or loss in the fair market value of the futures contracts, based
on a hypothetical 10% change in the weighted average price of the futures
contracts; (viii) that, if we are awarded the supply contracts, we
anticipate that we will hold the futures contracts for the duration of the
relevant contract term; (ix) and that, if we are not awarded or fail to
enter into either supply contract, we intend to sell the futures contracts
related to such supply contract in an orderly fashion. Forward-looking statements are based upon
current assumptions, expectations and beliefs concerning future developments
and their potential effect on our business. These forward-looking statements
are not guarantees of future performance and involve risks, uncertainties and
assumptions that are difficult to predict. Actual outcomes and results may
differ materially from what is expressed or forecast in these forward-looking
statements. Factors that might cause or contribute to such differences include,
but are not limited to, those discussed in Risk Factors in Part I, Item
1A of our Form 10-K for the year ended December 31, 2008. These
forward-looking statements speak only as of the date they were made and except
as otherwise required by law we undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise. Words such as expects, intends, plans, projects,
believes, estimates, and similar expressions are used to identify these
forward looking statements, but their absence does not mean that a statement is
not forward-looking.
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SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly authorized.
Date:
May 1, 2009
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Clean Energy Fuels Corp.
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By:
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/s/
Richard R. Wheeler
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Name:
Richard R. Wheeler
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Title:
Chief Financial Officer
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