- Earnings call transcript Q3 2022

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Operator

Greetings. And welcome to Alliance Resource Partners Third Quarter 202 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. pleasure and your Chief my Senior Brian now President Vice Financial is to host, introduce Cantrell, It Officer. Thank you.

You may begin.

Brian Cantrell

and its financial perspective on Thank Resource these results, we Doug, welcome, conditions as this discuss Earlier you, our well morning, will Partners now released operating and third and XXXX market as quarter results, and everyone. Alliance outlook.

open questions. Following your our to prepared the remarks, call we will

of subject and risks, with our beginning, and remarks some today release. to a a reflected forward-looking include the and we in variety Before contained press also of statements, uncertainties time-to-time assumptions this our Exchange reminder may from morning’s in are that filings Commission, Securities

or expected. prove those or or we partnership information no by unless may required of update obligation these available more do if from these to uncertainties statements incorrect, so. publicly vary result if or materially us, risks a otherwise, or materialize, new underlying to our actual forward-looking based While or forward-looking as results the In law assumptions providing on currently to whether events one future information, projected these are any has revise remarks, statement, of

release, the also furnished differences has the GAAP and Definitions financial certain Form discussing reconciliations of which been are contained measures website and measures financial posted on our to of the will non-GAAP press most end X-K. we between Finally, ARLP’s financial be non-GAAP comparable on these measures. and SEC directly the at

for our over comments. way, quarter Craft, Chairman, then review our the of of Joe With and Executive and the Chief a required call the results preliminaries I Officer President will with the his begin out turn for to

sales of continued exceptional earlier coal first the the quarter, reported and record this this morning, XXXX performance during As we as announced prices. year revenues into ARLP’s half

the compared oil and gas and XXXX these and all XX.X% sales compared to production coal X.X% as net the also and coal our coal income consolidated ARLP quarter. sales EBITDA, and At to royalty XXXX and addition operations, production coal to increases and records, posted increased to volumes, volumes, quarter. volumes In

mentioned, record during jumping sales revenues to previously led of and record XX.X% Increased volumes price coal increase As $XXX.X per XXXX million, ton sales quarter. $XX.XX realizations XXXX compared the per to sales higher XX% coal to an quarter, price ton. a increased the

completion Basin, longwall in began Tunnel move move Ridge Illinois As noted and labor-related increased bear particular, mine quarter, with notably our the longwall Hamilton respect further resulted we that EBITDA also longwall reflecting This in early per numerous during to included inflationary to extensive on in September. the mid-October. the release, supply A refurbishment. our performed and pressures segment quarter. Appalachia, adjusted move early repair also maintenance mention bringing in longwall in during materials the items, work surface XXXX a ton items, into extending continued cost for the XXX expenses expense and repair In a increases mine September Hamilton few In costs. expense most expenses, shields XXXX of experienced our

encountered prices its $XXX.X XX.X% on rose Mining to coal mining improvements strength on made adjusted XXXX plant. performed million, and record coal the conditions the extensive adverse quarter. to of of our operation drive higher higher an MC addition, these and coal In at margins Despite EBITDA over segment sales expenses, preparation maintenance to increase

leading XXXX revenue realizations gas oil oil segments, jumped to the now ARLP’s XX.X% XX.X% increase XX.X%, royalties for rose to sales Turning quarter, and to compared and volumes gas royalty to and $XX.X royalty price million.

to increasing increased per million. the with X.X% compared XX.X%, the $XX.X segment respectively, Total EBITDA XXXX jumping X.X% segment sequential record royalty and royalty XXXX tons Coal a well revenue also and to royalty the quarter. compared both during to adjusted quarter Our performed climbing royalty ton quarters, sold XXXX XX% as and

EBITDA strength the and for to to the cash rising XX% total quarter, ARLP’s royalty jumped to flow the the segments, the The XXXX total the XXXX increasing Financial operations revenues and million coal XXXX quarter to over XXX% through of cash results significantly our quarter, during X.X% quarter as $XXX.X XXXX consolidated by sequential million, quarter, income income quarter. Net paid cash objective performance a quarter. $XXX.X $XXX.X XXXX over strong million On quarterly compared $XXX.X record the XXXX both unitholders, to our net XX.X% also million and higher of XXXX our more the sequential with unitholders million of increased increasing the also and from the flow improved respectively, XX.X% distribution. generated $XX.X than free quarter, than X.X%. double we in quarter. EBITDA returning keeping revenues during and In the to the ARLP free and

to reduced results compared we $XXX.X expenses income X.X period. months XXXX Our increased leverage million $XXX.X XXX.X% by XXXX in operating and compared and million period. XXXX sales ended and production Coal prices oil ARLP’s continue $X.XX the sheet than the income to to quarter also of million XX% volumes increased more improve XX.X% to for royalty all $XXX.X compared sales volumes for of total balance for also XX.X%, to Increased the EBITDA billion. the respectively, Increased higher the were period. adjusted trailing revenues cash first ARLP’s XXXX our and the and by XXXX and total financial as and net leading nine operating EBITDA the while with XX.X% XXXX during and $XXX.X metrics drove the million, for XXXX XX.X% offset times million. much XX.X%, and of to higher quarter to rose improved $XXX.X taxes, revenues period we volumes coal liquidity sales higher period. gas net as and commodity to respectively,

to achieved were these results due despite I point exceptional ongoing think delays, out to shipping primarily important it’s disruptions. also that transportation

by coal shipments continue impacted have both below negatively we tons falling quarter. expectations -- has planned ARLP’s Year-to-date, While million coal be X the to been our during delayed. approximately of improved XXXX shipments rail performance recently,

on we close for and this with a rail recognize table, levels the planning may prices As shipping year, costs that XXXX for adjusted strike outages strongest water the movements our its for coal expectations XXXX, the but ARLP potential quarter accordingly. impacting possibility and back coal have and is we XXXX and lock we with some barge into sales volumes, shipments currently low out current shift

expectations. than ARLP’s with base outlook BOE led activity the exceeds we X.X% the closed at expectations additional recently from gas and the as production acreage, drilling to royalty be two continue year volume Oil ARLP’s in Increased completion production for on Turning to midpoint. increase along full to businesses. minerals acreage higher by our anticipated, and royalty us volumes transactions our

royalty expectations expect our anticipate gas We performance the our increase XXXX, as oil volumes will segment next of and previous in and well. year exceed and will oil gas production royalty

For our coal previously guidance. to royalty delays segment, year led lower discussed shipment full the our XXXX I have slightly coal us

the segment, full for acquisition increased modified and will expenditures planned lower a mine to have to capital increased tax mine. to our ranges the We expense oil gas several year also our initial range royalty performance for begin cost XXXX Joe? the market ARLP. work ARLP’s expectations accessing anticipated XXXX area this for his reflect comments in With the and the Joe guidance call the of reflect Ridge adjacent that, reserves reserve over The also for turn for was and to full current year adjacent for was consolidated to for year. and Riverview income Tunnel to range outlook the I items on

Joe Craft

Brian, employee is growth drive to keep To accomplishment plan and this efforts, tool by significant for extremely our want to motivate to solicitation, performance for plan of teams LT ARLP’s aligning increase Since ARLP important the a to place their be in for accomplished is of His proxy picture, be LTIP the incentivizing I has am miner necessary results country’s Alliance. with tens in the financial see ISS number that working strategy in value proposal. first year dedication. coal all family ethic in filed to history. can and units for XX-year refreshing success. of has only of used badly the hard-working -- our we you, Through ARLP dream. Michael’s across amended wondering, talent advisory included of an to security. record more the creating heartfelt of long-term are his miners’ Attracting, properly award plan life. their interest ARLP’s co-miners been celebrate in consent amendment, Americans up by and management has Kentucky our focus employees the employees of his their future, achieve incentive so XXXX, future he scrimmage, for we to unwavering at the son the to cloths. morning, available be representative see ARLP He and on and delivered approve of our with unitholders response and this stakeholders. boy entire Glass of comments to on outstanding any retaining our the to key last work the cannot Blue-White Thank long-term critical plan. inception, Alliance’s In performance showed thanking wanted Lewis, are been the are in recently American Play for and additional requesting organization to proxy photo subsidiary All an of units an our thousands case is under far company you our track execution firms, my with all of this Alliance The who of everyone. long-term Excel, hard Alliance’s time for X,XXX thankful story good plan of so proud operating that work to I our a this now the begin and favor those captured ready all a issued viral his morning than encourages subsidiaries. the of wanted to picture basketball country, who three-year-old that grants both his for still hearts and other around for be proposed at his have man, his recommended has purposes. have yes, unitholders That chasing people for of recognize of the University are vote at all contribution weekend’s when the Mining. Excel and a energy caring It

set arbitrarily unrealistic energy. and baseload our premature power During call, transition is many chain, to shortages regulatory in governmental that to to critical Ukraine, ability producers to in policies to generation fossil shortages, with factors contributed labor critical conflict rising have supply we global meeting the the of the reliable, limiting currently climate of fuel crisis renewables the on transportation energy the access cost low supply deadlines. the Disruptions fuel essential abandonment to the a and increase have power of Constraints unreliable to drive contributed in world meet providing gripping resulted outlined Misguided challenges earnings last all to the world. of capital, of related in commodities favor demand.

dramatically secure Coast IEA Director the governments and they the energy stated, energy world and for consumption retirements shortages clear shifting idle coal around costs. the has bring a make the the in become need eyes natural power back me, before for of our facing capacity around to focus impact coal of The Europe countries delay turning react responses power their severe restricted reliable, and As the point. historic rapidly Russian affordable plants escalating and increased recently coal, as promise as coal to coal-fired pushed and to this a definitive generation energy on Executive online. has supply world world gas citizens, is many has -- planned potential excuse

customers over new remain of reality this next are not least U.S., couple to expect domestic utilities well winter. at year. for expected low positioned future. backdrop, extremely stockpiles be the increase at if next is the years, the We longer. the seek through over buying foreseeable to Against activity anticipate inventories from ARLP will We will growth In continue depleted utility coal our as replenish to so and persist levels this

imports provide will as also next Europe million they of as this year Russian XX try that replace tons export to well year. We anticipate received conditions opportunities favorable market in they attractive

over meet ARLP’s overall help we in as order will anticipate million As these a XXXX tons as currently coal level by needs. result, in increase much year’s production X this to

priced confidence million million XXXX. tons Our supported for our currently and is priced by XX.X another and already tons book XXXX and XX.X in contract committed committed are

believe The to committed ARLP’s of cash over We assets mining margins remain our and flow coal several existing to continue longwall mine low in a mine investing of of lower reserves to to our potential are ARLP made to With existing next Tunnel sand generation Ridge benefit yielding our coal decisions and to these earlier commitments, announcements acquire adjacent morning that evidence cost commitment. operations. position we this our strategy volumes our and should Riverview higher additional cost, to the we this our to from years. increased cold access cost the of maximize maintain low adjacent

and ARLP XXXX benefit and sustain next XXXX. commitments last that opportunity quarter Illinois units these and the savings increased its in With believe the planned two production providing announced in has capacity new We share through volumes expand cost the will to Basin production coal beginning year. market we us

on segments, Permian focused total growing additional sight acres in approximately of and in of increases acquisition remain to recent acres volumes. an royalty and oil provides coal our mineral oil gas ARLP’s line and XX,XXX the net and growth royalty the royalty gas also X,XXX position We future

royalty make strategy. progress the Ridge Tunnel Our and to Riverview expected its new ARLP transition is result to as growth segment previously I on a show discussed. ventures also continues of future activity energy coal

Energy manufacturer fund. We team motors are initial increasingly of has developer infinitum technology investment recently our energy startup efficiency IV for has the that evaluation confident to commercial their of last remain of our ARLP excited team several April. and continues ETP to and is investment. We in sector. opportunities convertible market and opportunities in charging in opportunities in in interested with to space our about numerous in this We ARLP the invested investments commitment electric elected front electric, future. the its million of and about initial NGP, management high hold resulted support plans excited evaluate work transition Francis is the of ventures us infrastructure Francis $XX Energy the development ARLP’s in EV growing new to others EV at to remain its management note network and our in our infrastructure

Our our cash per per Board increase to gave unit, and businesses of XX% previously for the flow confidence a the by core XX% increase our to sequential and visibility unitholder sustainability oil bumping quarter our accelerate gas into XX% $X.XX over coal the targeted the generation distribution distribution quarter to XX quarter.

well cash growth will again for is attractive Operator questions. unitholders call returns next prepared ARLP positioned to believe we concludes solid year. forward, our our to and Looking open to the That deliver and comments I the now ask

Operator

you. Instructions] first your comes Please Company. proceed with the Thank Martin from question of line Nathan Benchmark The question. [Operator Our with

Nathan Martin

Thanks the Good Hey. taking Brian. morning, Joe, questions. for

Joe Craft

Good morning, Nate.

Nathan Martin

first, to start want the update. XXXX on with maybe I production

tons guys quarter, mentioned, about maybe you grow year-over-year. I you could million X think production last

possible X we Now a to guiding million are increase. ton

due over given number a possibly just maybe year into sales what base, sales as mentioned First, XXXX for production could guys clarification, carry of this the would to labor I mentioned some from or are a past, you. growth. using Thank you logistics? your you to get love as in Joe, kind limiting second, I labor then update factor that well? been the on And to think, you

Joe Craft

Yeah.

potentially XXXX $XX.X committed That For over what XXX,XXX guidance, to we as for our XXXX. in million base we moved means tons reduced had roll our XXXX. of into we that XXXX about

XX.X% to of we at probably -- quarter. add tons discussions tons committed we that guidance probably in million the added We another another as in the We XXXX our X to up showing to in are end speak. are

we to take completed operation that again, talked as quarterly in Gibson and production, day as continue million to South was our we talked that The that had next unit can staffing about are staff last far adding assuming roughly million about we call, projecting. for a October $XX that mid-month. about we the year, $XX As shift would the that

So are as ramping we speak. that we up

car assumptions some been us XXXX to in us additional just The planned are some talked of that they and allow we we some our another online factoring second we in million operations, we some to have XXXX development support of allow would get production. adding the individuals other XXXX. to additionally about X that And have come our bloaters have May that well. shift, us adding the units, opportunities shuttle production what tons to route to increase to we talked Hamilton full then about. will that unit At be whether will also That’s staff in in Hamilton in allow of that as

we to achieve additional ability far what assuming are that’s So are the where we to as our labor. are secure to we as going where

that to things do that ability We improving that. area. the seen are think have We in

have We opportunities allowed area. sales prices that to has implement have other to tie in some than more -- back competitive opportunities the pricing most we additional the opportunities employment been bonus or with able be that to us

So did to staff ability our we feel last better we our today than operations. quarter about

Nathan Martin

then again tons it, you like to ton color, that guys million Appreciate additional, as get And on an mentioned, million you on to layered Joe. X call number. that XX.X XXXX, maybe

now chunk So sizable have committed a priced. and we

mentioned maybe to you Thanks. see we a an update quarter ton just pricing and ton think of there, get $XX per that expectation XXXX looks the increase price somewhere year-over-year. those tons? last on like neighborhood I what in Could

Joe Craft

Yeah.

to we that are hit think on target I number.

would ton basis. if be think price we roughly I look sales So the on at average XX% increase $XX year-over-year per

year. are our in estimate to probably, XXXX depend be right XX% where go I would we in plus on next just plans, say, markets good minus will a a So that and still going or forward, X% think looking is, and we the is now where lot we where of

after to opinion being stockpiles both the today those to as -- going winter continue them and more situation. coal natural for on the in that our see in the that year. to of Russian-Ukraine year, be without it’s pricing bullish are deplete case their as we It’s right conflict those now production. being replenish gas using inventories -- will Europe Russian-Ukrainian full But next inventories, anticipation export base they our pretty are We difficult midyear Russian next the we

judgments forming pressure also the that’s in export on will So domestic our the market, the put the to as market. basis of which opportunity

have tons currently we X So unsold. million

that close negotiating million these now. If you we extra right are we assume tons can that

to would or we is to think market of year or as I would this to $X.X export market. the to the market go suggest year do million that and plan shipped then go $X.X the amount next same this export we year, as we either available do export the million domestic

so that And have XXXX a we we have we got where in are or situation got in we this XXXX, were more similar that were demand in supply. for -- than year we significantly

we commit sell that give to just us opportunity will domestic tonnage have do our say and again go to to do? to to to So want ahead prefer customers go market. that export them they or the would soon in they what want that Do they to and

that’s look where to stand trying exactly we like. XXXX and of determine what sort So might

Nathan Martin

And it. thoughts. think those that maybe said exports to was flattish confirm, you I next for just Joe? Got Thanks correct, year be could

Joe Craft

to tons. sell, just am this I what million we X.X if left tons go X the to year, got do now we assuming we million saying, we Well, did

fifth demand market. single robust, who that go of plan got it wants we possible And Gibson. depending based have domestic could in to So it that it’s unit we could increase the with a export minor most, is the go the coal on unit. if is The our could market, some

unit, not bit the the we next get that where these have could equipment have more that little as we our that we just are on it to our way at year, together and the the super are people depend that do production make as we seconds. and anticipating market could. incremental beating XX So plan Again, a a will we ability

Nathan Martin

then Got over. more you. before it. I maybe turn Makes And one sense. Thank it just

what million couple then on more know little maybe pieces. about? moving ton, being any But that we know a trending, there? looks maintenance like? XXXX might you breakdown and guys in I given is per if still spending do where it. $XX of currently inflationary early additional is on additional mentioned pressures a there CapEx, Appreciate labor but just of talked Regarding Maybe I where additional please says think like so $X.XX the could thoughts it info costs was CapEx or you we all specifics that And curious look XXXX, your allocated? CapEx in release, any the get

Brian Cantrell

Yeah. Sure, Nate.

acquired that three for approximately reserves will being year, total we On those the haven’t access in that are Ridge been Tunnel to yet. increase correct, $XXX you Riverview. we spent two beginning million moderation some that to be years, And adjacent the are reserve for have inflationary we we and do have in new to actually of projects, $XX XXXX XXXX. to $XX adjacent over stabilization, certainly while area million In with or pressures between this experiencing the we to seen if pricing, down year will, the deploying about million work you seen come this costs

are as the five and always we right planning in what maintenance update look it an the when We over our middle like coming January. on will actually do, discussed will think we we process, of years capital give we in

next -- basis an premature that we you our be should a increase precision to certainly may at little will more give per year, for it guidance with ton color we call. be on a to on will but see and So providing bit expect next

Nathan Martin

for will of it there. the the guys Appreciate time fourth and that, I Brian. Thank in you quarter. luck leave best

Joe Craft

Nate. Thanks,

Operator

Mark from Noble question of [Operator your Instructions] with proceed Our questions. Capital comes with Please Markets. Reichman next the line

Mark Reichman

my morning for thank you taking and question. Good

Joe Craft

Good morning, Mark.

Mark Reichman

the segment, is kind are that your expectation of royalty on XXXX, elaborate terms the in guidance The just for acquisition? any could oil in of and yeah what expectations you your first what just your in one transactions on the XXXX was if -- -- of the of two gas impact or that

Brian Cantrell

provided… are the you talking in volumes are to you that XXXX, we referring about When increase

Mark Reichman

Yeah.

Brian Cantrell

least. …at

Mark Reichman

Yeah.

Brian Cantrell

Yeah.

Mark Reichman

what this How like? of year a Yeah. look that rate and would acquisition from much is full

Brian Cantrell

prior amount noted producing the these a mix I on hopefully drilling our base in a activity to XXXX we do increase to X,XXX portion about -- as currently you as would noted is acreage also of our you are But there transactions. the wells that on but is -- transactions. acreage, attributable of these anticipate say for release, two

to in mentioned of we my our advisers. the updated from are comments an engineering in middle planning earlier which As Nate, process, our report includes I reserve

So as you volumes bit get complicated, know, account… can you take the have Mark, into a to if

Mark Reichman

Yeah.

Brian Cantrell

drilling, … the not only wells, curve. cetera, decline but et also new

Mark Reichman

Okay.

Brian Cantrell

And again, it’s -- we in will be providing a view specific update in for is terms of what XXXX our January.

Mark Reichman

it’s Well, and in you did lastly acquisitions these you to units you going business, and do Brian, When what see a I you mean, to the have grow money range coal to -- going where of led that, your to about South, think, when businesses. adding these you I invest at from, about able Gibson kind opportunities then that are of been great broader be existing to Hamilton forward? kind are and there think are maybe those three-year about invest gas Riverview see but think you opportunities of to boost you to some and thinking -- see Ridge, an impact until Tunnel you investments? And when of think how XXXX you and those, just mentioned your making on opportunities production of about I there? emanate think stage the kind really oil are won’t those you and

Brian Cantrell

first following gas probably coal and comment on Joe oil will the that. on touch and the will side I

regard have particular. our we activity technical with own our know, group to oil internal and in got you As gas

are opportunities We in counterparties are positions. sell looking involved evaluating their where actively to

of individual their if interest acquire that a We is can ground larger more see which to game, package. also going participate front in mineral landowners really part we aren’t of in a

probably disciplined -- our we and we are of in review So there. have always -- we excess in oil underwriting the in per year been, deals space. very it’s We XX gas as

we appropriate a we can an will, believe pick of that, us So to give at frogs, before pricing things that’s lot get acquire we you ultimately, return. going we if

on of variety sources on side. a may oil from front. comes and want gas it the the to Joe, So coal And touch

Joe Craft

are Yeah. operating Tunnel we capacity. Ridge, full at

we have shorter XXXX, the acquired. before just reserves we we panels access into that Going some got

Ridge at we just increase So would in is, that what the market production, -- flip XXXX. additional capacity Riverview, forward capacity. we we -- Tunnel to At additional no have as don’t matter to have some

can’t it’s units -- And are to -- are we But we we that believe but volume. new need certainty. now as capacity to that based only could the incremental of people complete without trying have earlier, labor We as increase are to I adding to to the mentioned attract We do equipment -- ability can that that. any there. production we with our we to any as we that transition, on do project some increase we there well, just do adding plant right

production there we upside, are ability into increase some in that’s So as currently -- XXXX. evaluating our but it’s not to built our plans we as

Operator

line question of with Please with next Marsh proceed Singular your question. Research. the comes from David [ph] Our

Unidentified Analyst

guys. for Oh! Hey, Thanks question. taking the

into around the guys rest going of you some robust about So have with talk but finished the you most could position, a time. really the with probably, robust CapEx, some what do thoughts go that some you to looks Obviously, quarter it quite like of you that’s liquidity cash? in would had

Joe Craft

objectives has our Our on capital changed allocation had strategies or we call. the last really not since conversation

capital in sure some operations will XXXX. cost you our maintaining Brian to you of as our the we existing to make on some our we related and just tons ability cost improving mentioned, growth our status that going just and can our on by shared with forward our maintain and structure allocations focus trying potentially operations, increase So low to

distributions. our about talked have We

continue So to out cash unitholders. will distribute we our to

possibility. a some as repayment look debt at We will

comes three As years. we guide our in two $XXX million term or that due year note

Brian Cantrell

XXXX.

Joe Craft

Yeah. Yeah.

not they that our for segment, -- to opportunities to So may related that to anticipate down. to or opportunities the staff speak. minerals would generate oil invest building gas whatever segment. are taking got gas have and in the some to continue also whatever area, new in be we and growth generate, oil committing the we flow and will that And we are at group to gas then cash transition in we then of continue we look And provide future look invest investments we with as evaluate would we coal ventures so either that oil

areas we targeting allocation are that’s capital So of the today. that

Brian Cantrell

Yeah.

at Matrix opportunities to products efforts looking allocating in growth develop and their and also are help that be technology our long-term them we continues we to subsidiary have that think as capital will well. We

Unidentified Analyst

you please? some about that, us would repurchases unit LP and you that any at give point be Would can something kind think around considered how framework be of

Joe Craft

think if purchases, that we would long-term are would those incentive very basically which only I It under our units would unit to not potentially be very issued it plan, be did significant. replace any small. be

program be it’s top but of is buyback would a not So priority. a -- considered, units

Unidentified Analyst

Thanks it. it. taking questions. Appreciate for much so Got

Brian Cantrell

bet. You

Operator

Our Markets. next Capital Storms the from proceed Dave comes of with line Please with questions. question Stonegate your

Dave Storms

questions. taking Thanks Good for gentlemen. morning, my

specifically if that place? of Just one the and me, expects strike when chain the a at around happening about would what you could talk an renewed strike for you and seeing be since issue the the pretty supply take about thinking strike situation, like did first how take not a place are possibility for a potential binary strike, look

Joe Craft

strike… I rail And think the on

Dave Storms

Yeah.

Joe Craft

unions negotiations. continued in different are the … There’s impacted negotiations by dozen that various of There like unions. a sector. the are several there’s rail those

involved We It’s U.S. most and several recent along that them already labor is think of have voted Government railroads proposal. with the down a there’s know I possibility. the the unions.

economy that to We be will major disruption are occur. that the involved a a prevent federal government enough would believing strike rail to our still

placing So low a probability we on it. are

be not they they it like it don’t they operations exactly does operations are, to -- -- mostly are are all exactly what barge about standards there seems expect handicap to that However, that would and guess. get then but don’t traffic I outstanding I I that but disruption majority predict it’s more how that to railroads wish obviously. still our because but the are -- operate would happen, as tons hard issues and what could, believe negotiations still utilities let’s by it the reasonably I with, demand could happen. of they are are it the said just negotiating know rail. how hope large, happen. If like I opposed solvable, move or it’s would what emotional, working I to would as and seem other I to money what just money any that hard of allocate Most to From it’s could about just would working the be understand it’s I that, judge. But would than there conditions to it, that know we then more doesn’t We trying more predict our that. don’t don’t

Dave Storms

Yeah. Perfect. you. Thank

Operator

Our comes next question with Mark proceed with Please of from Zand the your question. line Wexford.

Mark Zand

Hello, Hey, Joe. Brian.

Joe Craft

Mark. Hi,

Mark Zand

update us can on you you would and when on start a your an begin stand renegotiation think you when Brian, revolver be your give bonds? in you where to to -- your of to position retire

Brian Cantrell

Sure.

in currently are banks with a are and We and amend lead launch extend. to our discussions anticipating formal

bonds debt weeks put we first facility in -- purchases, few next would place. sometime start see the could open to would will working facility at so a the happen the be have like we shortly year-end quantum either begin market you I or -- quarter doing to Our current very wrapped in in are To extent down us you trading or and today ability the next think of the bringing year. XX.X% new so. at of go -- And to are everything in outstanding revolving would working and before up after the have we credit

Mark Zand

it. Thanks. was -- price sort And we realization better area that bit for one hoping Got a Illinois bit little the from Good. of Basin. a were maybe then the little

in on us QX sort you sense for think where higher Basin? and sales. to QX QX spot over in QX relative was of of you and sort And You of will QX think. be $X, QX our then up guess I hope layering QX had over give I where was between you Can big some terms priced any jump that Illinois the realization a was would be

Joe Craft

able no If not over were quarter. looking -- see the for words, for Yeah. would coal, But that if it Illinois at $XX, just quarter current ship the to transportation or consolidated have third fourth scheduled, at interruptions able the look Basin. you if we should what the close a if we are the we tons we total, be to about X% in without would we the projected -- interruption by the to there’s other that’s ship increase have

Mark Zand

Good. helpful. very Thanks Joe. Thanks, That’s $XX. very guys. much,

Joe Craft

Thank you, Mark.

Operator

Our next Please line comes question. from the question with proceed of with Lucas Pipes Riley. B. your

Lucas Pipes

great workforce the it a I recognition my side. much was you taking have also of morning, question. the for hear quick pricing your to earlier. Thank question on And Good everyone. Joe, very

tons Where will opportunities the and XXXX both much. for remaining market. you versus the domestic the very netbacks You highest sell today the mentioned market? you you export for into in priced Thank export tons for XXXX domestic and the the market, would put

Joe Craft

Good we the significantly have seen drop quarter. day. last APIX from off Lucas, pretty

is more $XX bounce be something to do anticipate So prices trading But comparable maybe still of we an today the going than above. that average it’s those what to at. would probably, to back saw we APIX domestic, XXXX that currently in

in going XX%. I more, Street there’s talking think almost sizable article quite doing gas happening export a domestic So it market market the by the was morning there just What’s when domestic prices XXXX prices, an to about this Natural in between going market we pressure that natural than up the be what determined the on be I somewhat look way. know was in and down Friday, But do a will don’t now. the Wall it’s and right XXXX. in gas in spread today

gas can natural we volatile, So be as know.

tough burn true, the last quarter economic why is ask are it’s to natural I be on and the choices the mentioned that another commissions making to I continuing the utility coal. to starting this, thing, they when to prove to So as questions utilities gas are to side, is than and natural think, higher domestic gas

that some pressure publications and on that want year the potentially more be they pressure put could as well. price past pricing as to could where -- for what we buy upward So in may is. to There prices the likely see the currently utilities than price trade on have domestic desire in to than done these what think or to some coal the have next to there’s I more a

favorable are XXXX. into going environment pricing in very a we So

Lucas Pipes

again, helpful, Illinois And for would XXXX Very coal Joe. the where XXXX? put pricing for, approximately you Basin

Joe Craft

We you this being again, -- I I just feel mean, tell so in at price we negotiations. expectation to our is and volatile, are are that. you comfortable able a time. in not give what position well, to it’s the of It’s don’t middle

average in when I do that, sales earlier, we or at there I the I X% achieve mine are you. the so that’s that or look for mine giving price, and XX% a that mark you could mentioned constructive another for particular we total numbers, If upside particular as definitely believe think that. we a helping you specific is without able am a coal that, year-over-year achievable number if regard be to to

Lucas Pipes

And Thank you River then helpful. Thank expect out? me, play there? continued in conditions, very disruption do how the That’s one much. you. from embedded of in Mississippi guidance to terms that last What’s your you

Joe Craft

at have load inventory we our current our -- that’s this actually down additional the for year. volume commitment so ready in to have we shipments So export docks,

hard of more to it timing do additional shipments issue. market. possible it of a export a be to as the believe is we volume it but timing the in that, It’s So opposed would will predict, that issue affect

financial be participate not we have or necessarily may timing impact a the at over be I six-month So There disruption, time horizon. but levels a to five-month will that the able discussed earlier.

Lucas Pipes

conditions if difficult, can tons And rail more the to or move is... on river you remain

Joe Craft

-- I think yeah. those

there’s market, conditions, are I will opposed these have lower Mississippi river that, to affect progress think shipping are market. we in more not it’s the because talked we export the it not River the on that that issues domestic of locks opportunity market, -- to export shipments. plenty believe on market but we our the as affect domestic in really the going And domestic good about, we

Lucas Pipes

Very of helpful. Joe continue luck. Brian, and best

Brian Cantrell

Lucas. Thanks,

Operator

next Our line [ph], Vish question Private your with of the proceed comes Please Iyer from question. a Investor.

Unidentified Analyst

Joe morning, Hey. and Good Hey. Brian.

deploy all team, more again, the fierce individual in perception coal Question the the and oil with foremost, an wouldn’t it’s and particular, oil, thanks capital looking and into and than be our and other investor. new execution First that has a the shaping gas focus, regards wouldn’t for are EV perceived part the management, as Thank actually employees, to the everybody well at for of maybe all future, happy of to geopolitics excellence time team we done. that how the distraction a work ventures, money investing with be are stuff really the ventures coal, Very when fantastic and at with gas? us as doing things entire and you. up everything a rather new with trying

Joe Craft

it consider don’t We a Yeah. distraction.

We or at or investments have investments. a dedicated team got looking investing those

either not distracting oil incremental from So or opportunities coal anyone pursuing it’s gas our operations. be and what would to

a So is we people lot opportunities in. just there’s think the that government incentivizing of that to invest

we of as the of our policy light could will think it’s on to elections election and and shed the energy So sort go. mood -- some country future midterm prudent the where

among accord, reassessment utilities change some seeing their governments commitment are Paris their we objectives. move towards to that think I a and climate world, around the as

a move from button for governments pause to but said, our have a in are fuels. going from pause that so away but to movement change that, been there there’s the have the objective away been most has does continue still that, well, not So we not fossil now, push to right to cases,

in areas. But be provide So opportunities that is to attractive in very some look additional we the government that me, the portfolio the place in putting could just situation think read prudent incentives for in those assets just will diversification our prudent. given we need to be and opportunities I that investments political in excuse us it’s long-term can invest investments, to for

We something are consider that the any be don’t last XX have risk we not years. different take what going than to to done for we

will making XX us the sustain focused on to do very known we investments have are performance we allow that of been So of cash flow, years to last good our the type over history. long-term that

Unidentified Analyst

to that and focus there to ARLP you. Thank Again, these that initiatives Mississippi the ARLP’s rail with of ongoing follow-up on some outside one of more excellence regards Thank excellence Okay. stuff are you. within question is of ongoing Are in with see that stuff. given strike some any execution control particular up? the the we are roadblocks the coming and barges

Joe Craft

a respect exercise. our daily for transportation I think business, is with it we manage to how our coal

constant contact, our you way customers, current not but to are That’s your notwithstanding. We run only with just with the business, environment transportation need the the in providers. also

it. are we absolutely focused on So

rails teams have are We change. not going and dedicated and barges to sure experiencing that and made very that are challenges customers any and we trucks to to clear make that’s

and day. it we on important how got it are we have single So recognize is every people that

Unidentified Analyst

again, as Thank Joe. small Brian. Once you, investor, thank a Okay. you,

happy to Thank ARLP. you. We with very very, associated be are

Joe Craft

Vish. you, Thank

Brian Cantrell

you. Thank

Operator

question with next the Calavritinos proceed Arthur Please Capital. ANC your of question. from with comes line Our

Arthur Calavritinos

quarter, Good. It’s good guys Thank and very do great guys. good you much the well. to see

but do me area you Waha Let me for your to been and affect gas ask affected on reading a guys I Are you all, my terminal business. where the the net is lot of been something, have some or? guys that, gas -- or on forgive at ignorance negative have prices. hub that oil does close reading at just I about And it question, you it you

Joe Craft

Yeah.

that we -- that isolated the incident to was some issues having So the pipeline at an it time. was maintenance related believe that’s in the Permian. It

systemic incident. issue. So there buildup We a that to we We be don’t needed gas sold a -- of it’s think was an price. it’s isolated a believe at it think discounted

Arthur Calavritinos

Okay.

Joe Craft

obviously, basin. yeah, are we -- But that in

some for not it but event it a be would of our volumes, So us. should significant affect

Arthur Calavritinos

I Okay. European And then coal, in uncommitted terms are at of tons had you the it. the and on some, you -- guess, looking said guys

of it like guys when -- need and terms nobody’s what’s -- of… are question thinking surprised I I it it price not am is take just tons. can to Is in yet I at a bid going or a will on it those Our either feeling of say, And I on get looking it. either the sort guy

Joe Craft

this their -- I Russia in that have were so before took accelerate they Europe, the Russia August contracts they the embargo shipments with got had and under to embargoes. for winter the Yes. in to are, specifically Yeah, you they Yeah. mean, year. Currently, -- able prepared stockpiles effect Russian they

not there’s a need tonnage, a So the be after that will but there real need today for winter.

a it’s issue. So timing

the But sell we replenish hasn’t over in as buyers too that once stock month. swing coming the anxious prices see not into mentioned, at and prices those back prices And last I then why those much to APIX, and rise. anticipate their activity to at that’s been there because so we to get these you they don’t, start market the the will are

So much… there’s just not

Arthur Calavritinos

Okay.

Joe Craft

don’t buyers don’t right because and sell sellers any at want have to the activity right … now, place now. put prices to it

So that’s what’s…

Arthur Calavritinos

Okay.

Joe Craft

… going XX in seconds. these on

Arthur Calavritinos

bet guys able the of think General the the getting see sequentially at, the just EV. you to EV almost we in are is start guys And Okay. you am do what on bigger. ranch very bet the we more. where questions. that like seeing you say, it I EV -- contributing electrons? what I a this see I able to you look to are demand at Are market or point is couple Motors, I just say, guys, early, on bigger know is -- just Thank just the the And it then on the and the much but you for wondering whole see bigger for When is demand and the for bets sequentially? point, bet and mean, getting going I electricity what’s this -- or is are you auto it’s taking on bigger

Joe Craft

Yeah.

IRPs So that believe that posting. the demand is we utilities being personally in reflected don’t are the the

and there’s is. -- and They Some specific that to they of some at to of EVs, yes, still that that XXXX looking load of they XXXX. that some the can cetera. that factories, are taking When two that things and et market Most are production it that when to being their look numbers different discussion away, with think transition in we XXXX that lot a are factors these of actually probably by wind will way solar the start they about as growing, the that these EVs you manage converting might be think say XXXX, about moving. vehicles basically that years talk of you are XXX% looking sold plants we at XXXX, far it’s then the start going at to -- seeing as as such

immediately, have them. You be going have to the have quite those a people road to are aren’t engine. EVs their combustion lot they are can cars bit of you that continue on of are cars replace because combustion still still to the engines, to going A to sell -- to be going going

again, environmental see a the than really out that security elections lot how depend, about years going their will your that and to define help that national back a to we going now is and to how nations couple anticipate we thinking until energy to start question. and this from So the are policies their policy more of turn not so answer

Arthur Calavritinos

Okay.

Joe Craft

think are is there’s underestimated, for where to is you going, I sort that power. another And be demand a of that going which large thing

think today. thing that’s faster to that’s batteries underestimated have the going to that, think lot consume another I you people a more, this being to of faster more want technology the that’s current do in on is, cars the those expectations charged of road and when power then more used and and be than

they going in gravitate do. do for think sector that wanting demand to EVs electricity them fact, I auto to customers be to as there’s the are If demand. So the the going to is more

for in there am minds that is increase electricity if a demand think it nation. the I be policymakers well across So I properly understated is that of interpreting most the stated your point, will probably

Arthur Calavritinos

Yeah. Yeah. Yeah. Yeah. Agreed. Thank you.

better you train saw a Nissan, it thing I my was a lobbying that You on is that should I your a thing than muscle just then think turn there thing at And anyway, comment. I with did. last of lost stamp. into to one I into basketball the was turn have thought. player the, I say going put with government the other it stamp, The guys,

So really thing normal comments for modern the hard but I warming the well almost like and rocklish era, with like type that the was led of preamble. a it how said, you

thank So It much. very you was great.

Joe Craft

Arthur. Thanks, you. Thank

Arthur Calavritinos

guys. Thanks,

Operator

call back I’d There questions. are remarks. further closing like Brian for to the over Cantrell to no hand

Brian Cantrell

this morning time your support Alliance. continued also interest your and well appreciate and we everyone, And Doug. as it, in Appreciate

for financial day. join everyone full ARLP. call again fourth is will XXXX quarter currently discuss operating at that the and late our concludes to of support participation your everyone next for year to continued expected hope This call our and to we Thanks occur results and us Our time. and in January

Operator

this gentlemen, for teleconference. and Ladies does you conclude Thank participation. your today’s

a disconnect lines time at and You your wonderful day. may have this

Alliance Resource Partners (ARLP) 31 Oct 222022 Q3 Earnings call transcript