Intrepid Potash, Inc. (“Intrepid”) (NYSE:IPI) announced today preliminary sales and production results for the third quarter 2011 and provided an update regarding three major capital projects.
Preliminary Sales and Production Results
On a preliminary basis, during the third quarter of 2011, Intrepid estimates that it produced between 165,000 and 175,000 tons of potash and sold between 185,000 and 195,000 tons of potash. Production results for the quarter were consistent with expectations, as the scheduled shut-down for annual maintenance work was completed at the East mine and plant near Carlsbad, New Mexico, and the Moab, Utah mine completed its summer evaporation season and commenced harvest in mid-September. The lower relative production realized during the quarter will increase the cash costs per ton of production realized in the quarter and the ensuing periods when the produced inventory is sold.
Intrepid estimates its average net realized sales price for potash sold during the quarter was approximately $485 – $495 per ton, an increase of approximately $23 to $33 per ton, over the second quarter of 2011. Potash sales during the quarter were affected by certain customer requests to delay shipment of committed orders of potash due to interruptions in rail service caused by persistent high water levels in certain customer locations along the Missouri River. Additionally, the severe drought conditions in much of Texas continued to reduce demand in that state. Intrepid was successful in marketing traditional Texas potash volumes into other markets less affected by weather, albeit at higher freight costs.On a preliminary basis, during the third quarter of 2011, Intrepid estimates that it produced approximately 30,000 – 35,000 tons of Trio ® and sold approximately 50,000 – 55,000 tons of Trio ®. Intrepid estimates that its average net realized sales price for Trio ® during the quarter was approximately $245 – $255 per ton. Intrepid reports “average net realized sales price,” which is an operating performance measure. Average net realized sales prices are derived by subtracting freight costs from gross sales revenue and then dividing this result by sales tons.