BILLINGS, Mont. - Westmoreland Coal Co. stock fell to 26 cents a share Tuesday, April 3, after the company with three Montana mines indicated it would consider bankruptcy.

One of the mines supplies coal to a power plant in Minnesota's Sherburne County, and the company operates a mine in Beulah, N.D.

The Colorado company, which feeds the Colstrip power plant from the Rosebud Mine, and whose Absaloka Mine has been a major source of income for the Crow Tribe, revealed in its late-filed annual report that neither mine had coal sales contracted beyond 2019. The company also operates Savage Mine, a small producer in Eastern Montana. The company's problems were not limited to its Montana holdings.

"We may seek protection from our creditors under Chapter 11 of the United States Bankruptcy Code, or an involuntary petition for bankruptcy may be filed against us," Westmoreland stated in its annual report, "Either of which could have a material adverse impact on our business, financial condition, results of operations, and cash flows and could place our shareholders at significant risk of losing all of their investment in our shares."

The company indicated in its filing that bankruptcy would be a last resort. Westmoreland has not responded to phone calls and emails from The Gazette since February. A Tuesday attempt to reach the company's chief financial officer, Gary Kohn, was unsuccessful.

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In a news release, Kohn suggested Westmoreland was trying to stabilize.

"Our aim is to create a capital structure that better aligns with our cash flow and allows for an improved balance sheet," Kohn said in the news release. "During the restructuring process, we have remained focused on safety and on providing our customers with the level of service they have come to expect from Westmoreland."

The news comes two weeks after Montana's Department of Environmental Quality heard Westmoreland make a case for expanding Rosebud Mine. DEQ officials last week told The Gazette that Westmoreland's wherewithal to continue mining was not discussed during the four-day hearing.

Westmoreland faces strong headwinds at Rosebud and Absaloka mines. Rosebud is run by Westmoreland subsidiary Western Energy and feeds the nearby four-unit Colstrip power plant. Units 1 and 2 are scheduled to shut down within five years to settle an air pollution lawsuit.

In its annual report, Westmoreland indicates that it has a contract to deliver coal to Units 1 and 2 only through the end of next year. Westmoreland reports selling 2.3 million tons of coal annually to fuel Units 1 and 2. Likewise, the company's contract to feed Units 3 and 4 also expires in 2019. Units 3 and 4 burn roughly 6.2 million tons of Rosebud Mine coal annually.

However, the power plant's owners indicated last year they are negotiating new contract terms beyond 2019. Westmoreland indicated the same Monday.

Six utilities have unequal shares in Colstrip. The owners include Pennsylvania-based Talen Energy; Washington-based utilities Puget Sound Energy and Avista Corp.; Oregon utilities PacifiCorp and Portland General Electric; and NorthWestern Energy, the largest regulated utility in Montana.

Both Puget and Avista have agreed to be financially ready by 2027 to exit Colstrip Units 3 and 4, though neither has committed to an actual closure date. PacifiCorp is bound by law to stop delivering coal power to its Oregon customers by 2030. Portland General Electric has until 2035 to meet the same Oregon mandate, but will be mostly off coal power by 2030, the same year it is expected to be financially ready for exit.

Absaloka Mine teetered on closure as recently at 2016 when in late summer Westmoreland informed the Crow Tribe the mine would close by October if the tribe didn't agree to a cut in its share of coal proceeds. The Crow Tribe agreed to cut its tribal severance tax by 85 cents a ton through the end of 2016 and then by $1.10 a ton from January 2017 to December 2018.

A 40-cent-per-ton cut to tribal gross proceeds was also granted to keep the mine afloat. Royalty payments to the Crow Tribe were zeroed out.

The tax cuts alone were a $5.35 million loss to the Crow Tribe in 2017, based on a reported 3.573 million tons of coal mined from Absaloka that year, which was listed in the annual report filed by Westmoreland on Monday.

Demand for Absaloka coal declined 2.2 million tons from 2015 through 2017. Sherburne County Station, a large coal-fired power plant in Minnesota, which burns Absaloka coal, is phasing out of coal. Westmoreland has historically had three-year rolling contracts to supply Sherburne, but now has contracts with one Sherburne owner through this year and a contract through 2019 with another owner. One Sherburne coal-fired unit will be retired by 2023; another will be retired in 2026.

Westmoreland's troubles come as no surprise, said data analyst Seth Feaster, who warned in February that the coal company's stock value had fallen 97 percent and that the company appeared headed for bankruptcy.

Feaster, of the Institute for Energy Economics and Financial Analysis, noted two months ago the Westmoreland mines in New Mexico, North Dakota and Texas had lost core customers. Emerging energy policies in Canada threatened Westmoreland properties there. At the time of Feaster's February report, Westmoreland's stock was worth 55 cents a share, more than double its worth Tuesday. The company is more than $1 billion in debt.

"This is really bankruptcy in slow motion here," Feaster said. "I have to be careful using that word because they haven't declared bankruptcy, but they're in a very challenging financial situation. What's going to be interesting to see is what Westmoreland is going to do to get this resolved."

The Institute for Energy Economics and Financial Analysis is a New York-based institute that researches economic and environmental issues related to energy.

Feaster said he doesn't expect Westmoreland mines to close anytime soon, but as the coal industry evolves there will be environmental cleanup and community challenges, for which state and local governments should be preparing now.

There are fewer customers for the coal now than there were just 10 years ago, Feaster said. As a result, coal companies will be fighting for profits from a smaller market. There will be losers among companies not financially healthy enough to compete.

As many as 19 power plants that once burned Montana coal have closed since 2012, according to a report by Montana's Legislative Services Division. Another 18 power plants burning Montana coal have published plans to close or partially close by 2030.

"The coal industry has lost a lot of bargaining power and that's an important part of what's happened here," Feaster said. "So, the utilities are driving harder bargains, waiting longer to renew contracts and making shorter contract offers."