ARLP - Earnings call 4 2023 | Alliance Resource Partners, L.P.

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Operator

Greetings. Welcome to Alliance Resource Partners LP Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded.

It's my pleasure to turn the conference over to Cary P. Marshall, Senior Vice President and Chief Financial Officer. Mr. begin. now may you Marshall,

Cary Marshall

Thank you, everyone. and welcome, operator,

well Earlier quarter and and Alliance and Resource outlook results operating market on its fourth Partners released as those full discuss and for will this our conditions we perspective current morning, results, now as year XXXX. XXXX financial

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

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

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

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

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

fewer at prices. district volumes coal challenging rates, the conditions for by we another with Mining caused a net in units operating Operationally, reduced at record commodity year volatility and challenging continued in geopolitical recoveries, new had and operation. XXXX, sales income. that the royalty volumes of gas full Mettiki contend global longwall our revenues, pressured high global across year and During per primarily MC interest the accomplished We records ton, region, we lower these oil Appalachia price in unrest and development of to delayed terms delivered geologic economy by

Notwithstanding these results obstacles, for through combination operating efficiencies tight outstanding investment on contracted we our order a achieved longer-term our well with our strategic focus of positioning and customers. book,

increase XX% per XXXX. to Full year from $XXX.X million, and revenues nearly and XXXX. billion, income million in $X.XX unit Net an increased in from earnings from were was billion $X.X in XXXX up $X.X $XXX.X $X.XX

oil the and and quarter lower $XXX.X royalty more more than quarter. offset The gas gas Looking prices, revenues quarter primarily transportation $XXX.X and million closely by year-over-year higher the volumes driven oil Appalachia, reduced to lower at record volumes million were coal in in sales coal the XXXX Total was revenues. fourth XXXX and comparisons. decline prices other in compared and which

[indiscernible] Total a XX.X% the the versus quarter. quarter, sales ton of decrease per XXXX was price coal for XXXX

negatively resulting coal gas contracted our impacts lower. pricing. markets, to book. mild international ton from natural in winter a order and demand Softer a sequential On and positive X.X% price of impacted partially domestic was lower prices the by both basis, was per start offset This coal sales

MC XXXX our compared tons X.X% million was by result quarter. to X.X to volumes increased volumes quarter, quarter compared decreased to Hamilton mines the XX.X% and higher the to compared sequential region by volumes, down operation South and respectively. Illinois recoveries, the Basin X.X% sequentially. sequential X.X% to XXXX quarters, to while The reduced move Gibson operation volumes XXXX the sales coal and of of Tunnel at development and lower the The the Mining, production from from increase longwall compared a delayed new and operating sales to compared the caused that our X.X%, units conditions is longwall coal sales XXXX a Mettiki volumes lower primarily quarters. Warrior across at relates of and scheduled at our our it Total As the Appalachia longwall challenging Ridge respectively, coal geologic were million X.X was tons district. XXXX X.X% Coal in reduced mine volumes

to sold quarter export terminal at temporary third-party outage negatively approximately for market XXXX tons sales. impacted and use inventory due X.X million we a were Gulf coal by an Coast Additionally, tons unexpected export

XXXX revenues in offset reflects pricing than essentially per royalty record X.X% total year-over-year volumes gas segment, realized lower sequentially. increases the and In revenues $XX royalty year-over-year, oil The were that more coal unchanged in revenue oil down our and and commodity ton. quarter in million decrease gas

Specifically, per coal up XX.X% compared quarter. royalty the revenue ton was to XXXX

led quarter. Sequentially, and oil commodity BOE down lower prices and gas sales the versus X.X% royalties XXXX up sales to was ton revenue royalty per and prices While coal realized X.X% lower per XX.X% per average prices royalties oil BOE. gas average being were

volumes coal acquisitions additional declined oil BOE The and year-over-year. record X.X% on and tons new interests. basis volumes from royalty drilling and gas completion mineral of increased activities XX.X% our resulted interest a on increased and sold gas a royalty from oil to Oil and record, gas while

impact increase just for per and Turning more to The purchase was higher EBITDA costs. in discussed sold coal volumes Appalachia improvements and X.X% cost respectively. XXXX I ton quarters, $XX.XX, an our adjusted Illinois X.X% and operations offset of the of lower than coal in Basin. sequential expense Segment versus the

our Appalachia operation weeks. an lower and additional production that the and in saw but longwall XXXX late for Hamilton X lasted quarter quarter, ] compared when the experienced Basin returned It Mettiki. Illinois third mine gave fourth December. Last unexpected the the Specifically, to the quarter [ volumes idle outage the we as into to facility expenses at color was at quarter entire to higher

when under again, and which discuss longwall move in in much This is over the favorable compared a production cost March. skipping XXXX expected to more in and geology back volumes in to adverse mining of a moment. conditions ] expect guidance of the the is half XXXX, [ we benefit in will overall reflected I In production region to XXXX, Appalachia resume

and higher quarter to quarter. in as offset the gas net and as for XX.X% coal volumes sales XXXX compared realized and was Our prices and price compared to $XXX.X in ton down million, reflects record was volumes coal by the and lower higher The oil the expenses previously production income per in lower gas XX.X% oil realizations XXXX decrease quarter. lower realized quarter royalties. partially XXXX the the EBITDA sales million, royalty $XXX.X royalties, discussed prices,

our flow to Alliance for balance turning full generated of million. of and year Now cash. uses sheet free $XXX.X the cash XXXX

X completed interest X,XXX royalty mineral million During acres acquisitions the of net totaling in the Permian, XXXX for Basins. we $XX.X Williston Anadarko quarter, and

$X.XX an as XXXX a Additionally, equating quarterly distribution $X.XX of rate quarter, compared level XXXX per to unit, quarter. to distribution we paid per of sequentially annualized This unchanged the and unit. during the is

our of XX at liquidity and we total year-end, net in of reduced which $XX.X debt trailing million X.XXx, cash [ EBITDA. was X.XXx resulting adjusted debt $XX.X outstanding million, to sheet. Total $XXX.X ] total by months million Lastly, the and respectively, balance included on ratios leverage

to to well contracted conditions XXXX the morning's in move. flex detailed with solid guidance book this market up initial our order warrant and tons to shaping is additional opportunity a should release. a be year Turning export the ARLP for

have you realized outlook ton As additional by color will notice, by per detailing to estimated and some provided we both cost our pricing region.

the order our realized is both on contracted year book and position. of open a combination based XXXX export Our for for additional contracting, and price full our expectations expected domestic

to We we a pricing. Gulf XXXX, anticipate overall XX levels an longer and XXXX Mexico realized We utilized levels, average river pressured in the of XX.X third-party the logistic to similar that of of at in XX% XXXX including to expect committed be over volumes extended the no million terminal these sales with second to half volumes at and issues in ARLP's outage the impact results. range export attractive XXXX the priced system of tons low water million coal

million including X.X is to tonnage XX.X XXXX domestically for committed million export Specifically, the XX.X our million markets. tons, and

expected ton compared Coal per between sales the $XX.XX to in in to Appalachia, are compared $XX Illinois ton in per ton Basin per $XX.XX to And the to $XX.XX ton per XXXX. $XX.XX prices of range and XXXX. in range in $XX.XX sold

And year range expect cost in segment per per in to EBITDA to compared as compared per in full ton side, $XX.XX $XX.XX the $XX.XX of Illinois XXXX ton XXXX. a we to $XX.XX the ton $XX.XX XXXX. as Appalachia, adjusted in $XX.XX in On expense to be ton to per Basin

Hamilton at with During in year and and Hamilton, at scheduled the X moves Mettiki X at X full XXXX, moves we X Ridge March. Tunnel at Mettiki, have longwall of X at the scheduled

of X.X for million the and $X.X to gas we barrels to Segment to gas In expect adjusted of barrels of segment, approximately million expected XXX,XXX our sales X.X be oil royalties is oil gas of Mcf revenues XX% and and liquid. to natural oil, year. XXX,XXX expense royalty EBITDA million million of $X

long-term ton million levels total expenditures produced. expenditures and XXXX reliable, we more capital we In elevated View, operations million come. expenditures. and Warrior, to in XXXX, to of we Tunnel with quarters, to in capital remain in of make messaging years many strategic XXXX, they are mines Ridge are $XXX as in Starting anticipating $XXX Consistent Hamilton to to capital River $X.XX our investments to our $X.XX recent for years normalized per ensure low-cost anticipate return XXXX

upon in standards. remain amount underwriting we be dependent of our that oil business, the which to minerals gas investing opportunities available will Additionally, the meet committed and

continuing maintaining improve liquidity. Next, to we on and our sheet, remain strong focused balance flexibility

unencumbered and throughout operating retire senior options execution combination all available We outstanding which currently number various utilizing at balance us, equipment including to our assets, financings cash increases value are periodically a facilities, and using on of of $XXX million existing the and the today. stages expect high-quality of the XXXX to royalty financing of flows of our notes to attractive our collateral a of

best highest we unit business. evaluate distributions use opportunities This of Thereafter, and and returning excess base accretive our that extend flow. beyond repurchases capital in growth continue the or includes of to the unitholders form cash will to cash return our

will Joe outlook that, on Joe? market his for the turn to I With ARLP. call and for the over comments

Joseph Craft

morning, and good Cary, everyone. you, Thank

dedication. for for hard ton per want sold, We're and I and begin and congratulating for income. an resilience, and summarizing the revenue, job their delivering contributed organization gas guidance record comments to excellent success continued work XXXX. the pricing another total as outlining realized my our results that our our entire oil well year to thanking in royalty volumes XXXX net Alliance and factors did the explaining upcoming year, Cary by as

to year to strong revenue. as the deliver look equally our to be solid last we expected book anchor as is be XXXX, year As another coal sales and of

valued highly relative on by are our quality coal contracts. pricing to we spot for our the customers, premium of domestic have evidenced customers reliability with by commitments received the and dependability Our the multiyear market recent

XXXX entering several negative be areas coal levels of our XXXX. XXXX similar are have and we with beyond production this committed than consistent at our the volumes sales priced We're We past over year. moved we to relative faced believing expecting XX% to geologic that more

about we think the serve, we critical affordable themes several coal key for outlook fuel need markets and the As for generation. the baseload the industry for underscoring electric reliable, emerge

The to expectations market energy for first nationwide demand. relates increasing

artificial with doubled year, support past as and data should citing industrial ongoing well X-year of that as and notice rising nearly U.S. grid have associated sectors, the we in in load centers forecast all growth investment manufacturing energy planners Over intelligence. needs take

over energy These the patterns. accelerated. but by reach speed gigawatts operational The needing with electric years, cannot changes AI coming sector the demand of to enthusiasm XX power data from fundamental will the and have increased for of U.S. While revisions may not center estimates requirements the the has be highlighted in for demand represent temporary sites recent that upwards data power. electrifying slowed, some are in of announced understated, megawatts individual centers XXX fluctuations consumption transportation

the site capital the Governor million the the center week, AI Louisville, Indiana of of Meta aims in from announced Indiana across Midwest. a on $XXX an said build be the XXX-acre that Kentucky. Just data to his last river Jeffersonville, will Governor And Facebook parent,

America. for Both be While exceptionally our undisputed capital this that decade. more the governor, Kentucky's over suggest will support years, these markets of proof growth our has low electric in battery States messages of belief more declared strong key the to several to as of Kentucky production United come,

needed and as coal-fired such Furthermore, and we growing urgency in from and the time renewed electric ensure [ grid times. the of weather to bodies, time the observing a Impacts leaders are In weakness in actions regulatory emphasis unfortunately, markets [ evaluating power display officials again, grid ensure ] to reliable economic especially on meet this development electricity ] times, generation a serve, provides. are to the and available danger consumers. capacity elected FERC focused peak by we is at fundamental reliability, demand, regulators, to domestically NERC attribute

grid this for freezing weeks the were snap exposed Two curb consumers thousands power. From after of start to the temperatures is mild be and to the grid relatively flexibility U.S. record the is provide X/X times failure demand consequences. approached a often constrained in service reliability country to capacity which winter, levels. on ago, due consumption gas over Texas deliver ground their wind and the cold to are what and catastrophic the to and like and States, below Having to to It the when experienced without coal was unmatched was and ability to a state's turbines can unable have of operators ask tested can shortage. of we hundreds Eastern pipelines strategic levels winter United the that turn that natural a elevates

to see critical coal U.S. for markets we committed will extensions continue to and why premature As these of believe to many come. similar in delays to plants these the we reasons for closure in that years the are serve

the the of of coal-generating XX life extended Over gigawatts year, capacity. operating utilities plant past have approximately

and replacement construction As a delays renewables. generation, in increasing result particularly electricity of the demand of

reliable, that policy be how of and needs for will is We realities we baseload part in believe the responsible acknowledge of electricity transmitted affordable makers delivered. and value consumers of unitholders. physics We dictate generated, our grid currency exploding so. supplying of energy U.S. to time. doing long-term creating positioned demand reflect long-term well and be decision are And solution, with the but to the laws a for practical and evolve must policy

strategic Warrior projects at Tunnel to our River to updates we Hamilton, complete to business XXXX, related Now turning Ridge, expect in the View complex. major infrastructure the and

capital in As to ARLP the low-cost start strategic maintain Cary the our decade. will investments United will will significantly as be the reliable, these productive ensuring be producer expenditures most our the and as United more Eastern the we next XXXX mentioned, position from benefits recognize lower States and over mines in States

record gas royalty to remain segment. business, XXXX. which our volumes Turning our in and We royalties committed growing to delivered oil

marks hedge minerals additional cash year, primarily in Over the Permian we year largest the investment million past acquired This exposure and our organic $XXX XXXX. offers concentrated in oil be love and since This Basin. to commodity a segment gas free price We growth. the flow potential. to

standards can to difficult comment I of not periods as volatility, markets. that during the relies timing that predict strict we strategy our and we As growth look commodity tight of size would on in acquisitions investment be XXXX, underwriting for price compromise to will

oil We coal also and opportunities and pursuing gas remain committed beyond to growth royalties.

focus can add core on strategic aligned competencies and value. these we decisions As where our areas significant advance will our selective, be initiatives, investment with we

portfolio business growth building passive investments. for interested venture potential style clear, thought me are and in generation. platforms long-term not Let as of be with should a Initial be capital position cash lines future of of flow we

designed by end, motors To extension ago, Infinitum mining This back motor XXXX. specifically controllers a of technology the much natural with and believe we weeks their our entered ] innovation groundbreaking in production [ efficient reliable Matrix to mining owned collaboration higher and We in bring agreement needed and our will distribute that represents the and subsidiary, delivering progression equipment. initial more performing motor industry wholly investment develop Design into announced high-efficiency, to an advanced Group industry. [ X Infinitum ] for

we reduce Alliance, mining help believe processes, improve capital operating to certain technology extend the their and life will of and our equipment. costs Specific

world. Additionally, potential while technology currently around time, to relationship new is impacts Like underground leader detection a the by we OEMs additional to are this revenue revenue lead the any unable and for for streams believe at mining Matrix third-party to publicly Matrix proximity customers could doing quantify we as systems. selling products

improving us XXXX should for continues be best to us am that simultaneously capital. I balance strong In proud in highest our what closing, generator pursuing the of flows sheet another uses performance cash in front opportunities and by encouraged continue of our to positions we year ARLP's for in our the business as successful and gear a be of by up XXXX.

That I'll concludes now call to and Operator? for comments, our ask operator questions. prepared the open the

Operator

The Nathan be of Benchmark with our from Instructions] coming question [Operator will Company. Martin line And first the

Nathan Martin

to [ it quarter. -- for the mentioned closer you okay with you're year behind X.Xx guys thoughts it distribution want to fourth would this to prefer be I dipping coverage. said the dip where with to temporarily, your This It be will keeping that distribution like call I start it Board ], get meeting quarter this you Coverage by X.Xx. you down ratio And great have the [indiscernible] full XXXX time like the quarter. did came last the seems but distribution know obviously. But was you Xx. to be, the is on think your I it around. there looks and

So as those well. maybe takeaways any from conversations

Joseph Craft

question. for Thank you the

those included as So mentioned, we shows that year, are in did release. our finish with the we press cover

indicated, we LNG the as online will just of potential We in XXXX. United the costs half in optimistic We back because natural efficiency XXXX of As had we're be will to XXXX believe talked terminals just coming in about that go coming should higher we've States. to capital because projects priced 'XX. is primarily the be about. believe believe in of gas we 'XX, We opportunities operating versus as good in we 'XX. about XXXX, of our are opportunities be be 'XX and look as 'XX lower substantially looking There down talked as our also we've for the are

give lot we be there's So Yet not 'XX, contracts in some long-term over have same through we've much signed a optimistic do XX%. contracted about. time, 'XX We've to we in XXXX. at the got have where us as some that stability as

our the believe be have continued Board level. the so. have So factor I continued other our a that that do does and will the the front the my in to year, market would as decision a think through whether expectation. we'll in distribution on maintain position to -- as is move And growth to I we basis us. And $X.XX at of to react that a to opportunities consider quarter-by-quarter we're we the how make

As I've that mentioned in unit track didn't the in XXXX. we that the been our disappointed past, we've gave distribution price increase

years. decision. maintaining it we're So our his over and similar shareholders company, flow a Cary we've But that -- to returning cash very in the remarks, growing mentioned last on we're and XX will our quarter-by-quarter as been to be focused prepared the doing what growing

Nathan Martin

I color a there, question. appreciate bit multipronged Maybe Joe. the just of next, a

and the some an guys additional XXXX XXXX period. You to it just mentioned of contracts did $XX that like million you over looks

to some tons maybe period? time it a color more throughout And possible then is were how the that of First, spread get like? pricing looks breakdown those on what

in some would And Are or peers portion this the still are floors fixed, of I have market at And you tons contracts, tons in assume where those of an fixed portion your maybe what had? your index price? then are open like second, volatility? specifically export for point? to APIX something some there what but this largely tied domestic 'XX, have ceilings are could are or any year, tons like committed to pricing those

Joseph Craft

XXXX, pricing I right I know you've our to back comparable but book to Cary, is actual far in XXXX 'XX now. as revenues pricing. beyond don't the as of The the if what those So numbers contract don't our those are. average got have volume

Our do them. escalators domestic contracts have in

I fixed, just years, volumes, in prices. Some have indices. are through are don't They're are out fixed and we some believe, think the goes XXXX. actually our export is those I any

to fluctuate do will indices indices, metallurgical that the our specifically contracts on them [indiscernible] market tie is. to what are have of tied based Some some

What questions? from did I miss your

Cary Marshall

Yes.

go terms the we back in quarter just [indiscernible], were think and just at years, commitments. of of in guiding a follow-up I out look in think, if I where terms you last

as period period. that look If tons, out once they X beyond mentioned, the the to do the that in out those get for ton volumes XXXX of you of time in you XX out most go range million X.X go, are we years of million those

So XXXX an at you that of XXXX, the if to you give indication tracks. look level would of

may kind up of will that generally end as then toward million the X Some million tail to XXXX through them as it. go $X.X it's closer time and you they you significant year scale of be get scale fairly XXXX but scale down, over down speaking, of and to But $X volume period.

Joseph Craft

is are volume, time to And they're and need understand the only that not period, that us giving the some basically layering plants message through but those confidence they needed they start beyond. XX in

our from expectations the fleet existing to hearing that of are customers are we we the play coal growth that see And open will So with the that with longer. electrification out. stay in reliability plants grid need

I -- continues open, have don't keep buying that we to suggest the to need Republican plants all that they whereas do. administration suggested the candidates mean

So volumes to confident plants that X will and be years. we long I that very open we're X [indiscernible] our the demand X in require next that and the is production to will sustained these think the stay that believe growth for that

Nathan Martin

to, tied that's gets helpful, mean low priced. been I rates, spot to 'XX domestic And million above what the guys. there. committed seen looks positive. what just that full ton those got and to a price wrap high around of then the like really, mentioned XX.X of there and Obviously, That's you that's kind export tons, if price you volumes contracts where questions what's or your of guess Maybe pressure the I maybe guidance very some your pricing we've in the so per revolve it the maybe end assumption up. you've are APIX have kind my year

you to range? that the what a get to trying lower sense gets of maybe high Just

Joseph Craft

to whole export the And dependent be on margin. range is the going

API probably We X to pricing will -- range do that believe to we've than that demand the believe believe -- the greater believe on level demand We the dropped that's index those for the what in we last don't the world export that's back stable. sustainable. month. seen supply $XXX So in get has because pricing $XXX We will is that's $XX products. $XX that the

However, right little the pricing now soft. is a

And ranges how whole be those factor XXXX be swing tons that the the that spoke as to. so the we will you to export place definitive throughout will

But when XXXX. you look at the total compared are we to because our UI much position, needed it to for doesn't have be move times the needle that that little so placed

Operator

Our of Mark from next Capital Markets. Reichman question is line the with NOBLE

Mark La Reichman

So your delta export the happened -- the that what and and kind of was in be expected in going between priced market. the into XXXX to the was committed kind fourth what guidance, quarter, of

sold low end So in the to the at the came compared tons guidance. of kind

be do of first when in kind XXXX? that was sold and that XXXX the delta you and -- that's baked expect Or So I carry between mainly over of Will guidance? the already quarter? into priced to committed kind assume into and what

Joseph Craft

Yes. Mark. expect into We That's we right, provided. and the baked it into over quarter, those guidance roll to first tonnages would the that is

Mark La Reichman

from over last in the much Okay. -- $XX.X And increased fourth million. conference to million $XX quarter didn't but coal outside purchases, call, you of the sequentially, during expect number then way the

the did just outside coal extend do purchases? beyond at adverse done So Mettiki, your with you conditions expectations? we're did the those think And

Joseph Craft

So yes.

wall in actually end and of last the it the be of we So felt December. end the earnings by running like long up -- call, was would November, until the delayed we and

first needed little So some able is produce we we December, that we have shipments actually The operating be did in of of would but have in quarter. as that up depending may have quarter. buy some to the some last timing short expected the we week to may buy to purchases on we possible, whether the came we some did first the thought up come shipments a but longwall coal, we it and is

anything anticipating are we believe don't beyond that. I

Mark La Reichman

kind compare when to were least and I it at estimates was I that That but what low of difference. our think Okay. like, at end, a was look the we

from talk some the Matrix Matrix development becoming this global the then I get too any other margin for when there economics and distributor rather projects, are a know they than revenue shared there kind mean, Infinitum? new they revenues, it's of Infinitum? numbers, Infinitum arrangements sources products? revenue? is sale look lastly, on And for go a just mining a about install revenue kind between highlight of stack revenue are early but will for I can So the just Infinitum mining the of they of you products? to And maybe are with of other the like just of like customer, Or or substack like What and that project in arrangement enter when there an agreement

Joseph Craft

to believe, XXXX, in they be start, specifics? Well, the basically that in operations more do that testing I equipment second quarter those of we're going this working the our initial making have effectively, Cary, you on, that we're project are year. will

be and roll XXXX. then will And then hopefully in that marketing start we those in will

Cary Marshall

these what we proof did kind of concept with providing Yes, right, The similar of to products, for to we're where [indiscernible], underground. back Joe. goes that's it

than here we agencies quarter, hoping push And going those second even the discussions with quicker a so do we're that. for have mining underground been Certainly, anticipate regulatory underground little bit to by in it and here. the

Joseph Craft

and technology And working think manufactured XXXX. be then into that sold also would got [indiscernible] that that, too, on would another that we've motor would we approval that, and then also we're

give Australia. Well, similar [indiscernible] try to that think be Africa you would proximity but to domestically, [indiscernible] device South and out in at I -- that's our be will when is rolling focus too we Initial marketed to and currently some look idea. being

a got us we've just think X believe investment. And $XX that invested double-digit we I give announcements going items. on that we are that to from will cash track So flow just these million return Infinitum receive around

a of get that Infinitum. relationship As anticipate in on byproduct doesn't what investment and actual that we would that

taking this X So with are build -- gives we you the just opportunity design, scale into from of are an idea the or these the marketplace. products X of sell of and to that sort ready that

Mark La Reichman

helpful, really straightforward I Well, guidance. was that and the too many that. have questions pretty good. that's appreciate thought looked I pretty and on didn't really I

very So thank you much.

Operator

is of David from Marsh the Research. next question Our line with Singular

David Marsh

Appreciate congrats a year. it, and great on really

shortfall my looks to produced as particularly to I kind compression. I pool? into echo some or purchase questions guess little margin forward externally there you some guys your start the bit look Just due mean some in had a in it part production of Appalachia, need previously. Was largely of to we that questions and of like 'XX, your

Joseph Craft

mean that's compression experienced there with the the the was talked back in Appalachia of that region. right, driven within about in particularly I Dave. primarily year by Yes. issues, the that production mean half the items we we margin and I

So longwall operate at the didn't essentially, Mettiki we the of year. second half the had

now is that operating. So

So September to from went go back units come going to October. volume into that see X you're or -- we units X starting, in to market. I MC, us the believe, At

So we are some units there. at planning have new to operate at equipment We X MC. do

relatively cost we that So rather our think stable. be should

Cary Marshall

we're XXXX that is the we where as on that XXXX the as Appalachia the contracts look shipped a you XXXX as Dave, that's into in compression we we look side price on it, that terms that top market environment the in line at in on to margins bit the expired of little higher some driven on then, see region. had primarily And lower you of and contracted related

David Marsh

Understood. Right.

in be expense what the that I forward you quarter that? XXs decline fourth then And ton expect world would per you into So back the trajectory we do of Or down ton, the is just to there? on should per EBITDA terms of pulling Appalachia can living level, are correct? kind from XXs? expense in of that get mean the that we naturally thread think the

Joseph Craft

the looking I'd you're XXs. at [indiscernible]

Cary Marshall

the Not XXs.

Joseph Craft

the Appalachia historic Tunnel as like years The to XXXX in shorter But well to so compared of industry has experienced inflation new so because process in as and we're panels reserves at XXXX in projected in do is have moving Ridge bought forward. from we up the costs we our -- all somewhat you another all others. factor of gone in just but to inflation, going factor then X, of in have X

some into mix. So to going volume we're probably Ridge reduction enters that in that at have Tunnel

be Appalachia what yes, in looking we've that, sort [indiscernible] guided mid-XXs $XX.XX. is at estimate the of to something to in the you're year But for right the now, probably which would

David Marsh

to and the going the Yes. And trying is an going Will understanding gradually start to it a on kind it Or just of we to down trajectory I'm I still pop of closer to and to just be is throughout the there -- year? throughout -- are then going it. flat a decline mean, level year. get QX

Joseph Craft

it will lower it -- -- quarter the Right now the of the in if like looks low to not range, be appears our quarter than end our first range.

some into the a should we beyond of Tunnel way. in benefits some XXXX start seeing see so time depending decline inflation the us new quarter. So if for should XXXX, the trajectory that get the at [indiscernible] then take can into reserves on could period And getting we first the Ridge, when out Mettiki of be we're should good 'XX, look quarter we anticipating volume you at

David Marsh

Sure. very, then Absolutely, helpful. lastly excellent. just absolutely. That's me. that's for very Well, And

opportunity new with terms your increase flow expansion look terms lines reduction it set your as been into flow, the business debt of rank distribution? kind just versus cash like in at that the and you CapEx In could priorities, you've that pursuing you and of cash of potential of

Joseph Craft

mentioned, debt. our as will Cary the So paid priority, be down I think

down paying of 'XX be notes and will in potentially quarter in senior first We next year. the the

refinancing, will However, into we're grow. some he's give facilities to also looking at that capacity entering us

of but funded, hopefully, be most arrangements. unfunded, will type will -- the some revolver them them of Some be

growth, invest oil there. So to then as gas. talked about continue We'll far and we've as

to I are give any how but allocate will that specifics that nothing -- areas we would on the can still opportunities capital, invest on of you there's that have we investment. continuing horizon at other items, look in We to multiple

so future evaluate which flow that and growth, will as And capital put process got we priority. a we've cash a allocation investments do

continued high we to I And are be on our will mean priority whether distributions then there uses I alternatively, look have other at think that for capital. that list.

as it's talked be on but to the distributions So future consistent, goal as evaluate we basis that a quarter-by-quarter we my about. will got

will front to only future investments. just important, that make opportunities markets, but So include of in the not the just us as

Operator

with the ]. question Gee line is Storms [ Capital Dave of Our Stone from next

David Storms

you labor picking at that about might couple Just increased a was. and kind the require you're of But some X that expected start Curious Is to with it we're projects improvement me. how units going hiring? mentioned points the with might of believe sticking this to be that I the maybe Mettiki, these capital be to completed year. up? outlook thinking I labor you holidays as through for now know of

Joseph Craft

we Basin in improvement our labor, of Illinois seen retention an So our specifically an in and availability example. as have

are we should increasing but So that should that doing instead starting -- or portal well, County up, is of -- we at ramping, having be -- plant XXXX Henderson basically will mine to as what XXXX in where is we're that of developing we're we have mine one. 'XX the that be the at will staffing that as more it In be end review County. expect X do that that, production that portals operational Henderson during ramps second effectively, we're operational or have become by will get we at mine it that

will what hiring in we've be our there just attrition, some hiring normal not years, would X or of to last minds, experiencing to the some been still at X normal. So There's what we need consider but back the be there.

we we're At So I we labor challenges. in still historically. think the Mining, on better see been position have front, a MC than

to But of wanting been else, that back challenges everywhere think that to mine us. for that unit. but increasing the being that's to we've to to activity work of people back encouraged commit we're anticipating not It's currently I able area units. X sufficient we're attract numbers come by recent So bringing continuing the X possible, to see

David Storms

How expecting the on to that your are inventory inventory by you outage. current just levels? know then you impacted I with temporary Are fund And front. were they off? those comfortable to continue

inventory hopefully that would normalize, levels are slightly? to expect continue to things your you to down starting track Now

Joseph Craft

vessels likely of the inventory given as million level may it, but the on timing working market, in our more X a second. XX than is vessels be to goal a of the it's may Yes. [indiscernible] the I at based right just will on on think be export month it the maintain it putting because fluctuate amount of tons we're tons

think that be we could put could could inventory us But little so that X XX,XXX that going level. to to there So swing position than a -- Right be I million, would XXX,XXX right But in say. at be a area, something our that. in I right that to million-ton higher nature. it's a X.X maintain there tons goal now, be would it's of that around month

David Storms

then will one paused And export on if constructions that terminal U.S. have the Understood. demand macro last Or this need thought have of coal I something for been point? LNG really switch for it that that level. becomes you coal? a radar anticipate on this international Do pause at saw kind prolonged LNG a that me, from to consumers to I a in increase this not as is

Joseph Craft

are continuing the issued under on they're The are pause not terminals understanding that are review. that is permits to completed to under permits -- But but as it's our regulatory currently under the have those not permits in construction. been construction, proceed. to far new construction, It's maybe X allowed under be as that and be

until any LNG anticipate these in interruption a for don't of as permits. decade we demand of result the the and end door supply the So

continue that -- for we permitted the LNG be that to and plants these be developed been remaining So fact, the decade. demand that strong. permits for believe have will these will, in

Operator

Cary call Mr. this At the remarks. for session. concludes closing our this time, back to hand Marshall question-and-answer I'll

Cary Marshall

Alliance. everyone you, the also call, to your operator. continued time interest in support And this appreciate your we Thank morning on and and

first again you. and is the time. operating This day. that next our expected we for concludes Thank everyone Our financial our occur quarter hope us April, and discuss at results to call currently XXXX to call in will join

Operator

you. Thank

lines You may disconnect your Thank for you this at participation. now your time.

Alliance Resource Partners (ARLP) 29 Jan 242023 Q4 Earnings call transcript