HNRG - Earnings call transcript Q3 2021

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Operator

Good afternoon, and welcome to the Hallador Energy Company Third Quarter 2021 Earnings Call. All participants will be in listen-only mode. [Operator Instructions]. Please note this event is being recorded. I’d now like to turn the call over to Ms. Relations. Investor of Palumbo Becky Please go ahead.

Becky Palumbo

hello Thank the you taking thank to you, join Nat, time us for everyone, today.

and later discuss we As documents metrics. a financial issued will website. website a there our webcast and are live Yesterday financial reminder this market Form we conditions our containing Today, event posted available is operating results outlook. press perspective on on XX-Q quarter release our on Both third released being results on and today. will XXXX afternoon, and our financial certain and

call remarks, questions. Following will the prepared we open up the for

As with a a forward-looking variety our SEC. the from contained today to statements uncertainties risks, may filings and assumptions reminder, include some of of in subject time that to are our remarks time

no information actual Brent CEO; uncertainties if materialize materially may more to have our based do whether or forward-looking if information, us, are revise incorrect, new or or of otherwise publicly from obligation or President our providing today we While or these prove of results statements risks assumptions expected. currently available In events update these Martin, statements projected these vary or remarks, result those underlying a on us are With by our future law as so. required and any to Larry Bilsland, and forward-looking to CFO. we one

out the financial Larry way, of preliminaries can off required the the Larry, overview. quarter’s have floor with us we the that is Now start yours.

Larry Martin

afternoon, everyone. Good

and our accretion, and and compensation, some deferred reclamation and of investments. million nine Hallador CapEx change EBITDA the of taxes cash as share. plus flow define equity quarter depreciation to adjusted net plus method months or Before income of for stock effects or fair income $X.XX maintenance and effects I value a in less free begin, accretion changes depletion less $X depreciation, interest, plus net I’d plus definitions of We hedges $X in million defined. hedges, obtained define equity our get stock $X.XX We method like the fair plus earnings income before investments. for value a compensation, share, reclamation taxes, the amortization as of the year-to-date amortization,

$XX.X for nine for the million flow months. $XX.X $XX.X third down Adjusted was cash $XX.X $XX.X the We quarter the the million million third was bank for free nine of million, paid EBITDA and $XX.X quarter, Our debt the million for million for months. quarter, year. for

at $XXX debt our bank X/XX X/XX was and million, net million. $XXX at Our debt was

was over I’d X.XX turn within like Hallador the covenants. Bilsland. CEO, now Our well debt-to-EBITDA times our ratio to call leverage to our Brent

Brent Bilsland

anticipate by you, around improvement tons. In we Thank the at coal we’ll but quarter. X.X $X.X X.X revenue year, year-over-year, shipments and million. of million last million slowly, third inventory coal increased our the XX% tons. half began should the in third in This pace, when we of Hallador. reduced for the looking very finish total production shipments increased Shipments year, strong shipped by for half in QX, $XX first Larry. And XXXX. and This million results the in come outpaced by was XXXX XX%, in our quarter shipping

tons X.X to million We XXXX. tons X.X million produce in expect to

X We XXXX million up currently XXXX. ramping to are production tons for and

are XXX another the more all We we XX people. focusing the hiring on in We need just in we and month of need. next two the October, have We added equipment a It four will in will take to decline. roughly little of this complete, becomes workforce represent and fourth employees our new cost months. new training workforce. before Once time efficient one employees

at are away employee over our the and over reasons combat an should XXXX. expected To construction is supply this, ton, miles operating as is requiring elevated QX $X.XX now at were substantially, X. particularly finalizing these $X.XX to per phase per of hoist which we’re increases for of costs production QX the XX.X labor travel X costs, on quarter portal, expense Oaktown Oaktown The follows. the ton prior The workforce. which Focusing actually underground and reduce today, our at long for be times from operational $XX.XX here

unfortunately, inputs. some We’ve few developing have work vendors, from causing we’ve of chain underground our very This us been standpoint. disruptions Additionally, supply This coal this for from prices is new pay a lot additional necessary, productive should labor. be that work completed support a experienced mines of required a production and month. not our to premium but also it’s

XXXX. in remain to premiums throughout these XXXX dissipate and expect We

reaching Our Mine XXXX. Ace out reserve will in mine and Hole life In of its is The the of end November

of elevated Our our XX% structure responsible Ace for quarter. the during cost about is

to for Hole new open The in Mine pit XXXX. expect Ace We a In

In old costs an elevated expect We and stay our a as new The transitions becomes Mine our hoist to reserve. disruptions production QX XXXX dissipate, and return in reserve Ace normal to our in from workforce Hole matures supply sometime to our operational,

Focusing drawdown we the on which flows utilized flow debt. cash Increased and quarter, our strong reduce inventory to coal shipments cash during created and of debt.

million $XX.X During that’s pay our significant down of paid XX.X operating QX, flow cash bank and debt of to million I’d out by shares, you have million. down when debt. we million point shares, like a XX $XX.X generated

leverage end ratio improved the $XX.X at million to X.X period. the decreased the and of times to liquidity our Our quarter, in

Looking have has on. at substantially as the year gone gotten markets markets. All the stronger

XXXX average up here, then from NYMEX this of year in saw last price That’s gas, was. forward to it April XX-month tell And at kind $X.XX. over big the $X in year, that’s the XXXX, jumped $X.XX. decades, in $X. In average up the lowest average to that. the we recovery was of gas NYMEX the November And of climbed how to Then basically, half the or for under August gas curve. it just two first XXXX out became Looking you prices tough in

quite market Coal XXXX October, XXXX. have based was $XXX $XX. saw we export the is this April, is ton. prices gas, in increased on strength strong the really through natural the prices rapidly. of of In By also Asian a lot QX to a which market. price So are that APIX, increased which

night, to I it think was up $XXX. last

There long So, presently market of we’re term. world. in mean the this many are more for what improved large gained Asia since around in production seeing been interested But pricing in and all our importantly, outlined have have has for all discussing of where increased, in XXXX XXXX, higher you natural headlines beginning and Europe. Q. of We’ve point has beyond. coal coal does But those the prices of both most share think gas stronger amounts prices I and for prices dramatically costs to a Hallador forms electricity energy

to finish As previously will shareholders Hallador a see discussed, strong XXXX.

in the $X.XX in prices higher the expecting $X fourth somewhere range. to quarter, We’re

in our is a replaced dispatch of tons last no were by tons. XX% year, but with at million we our to and A prices, slightly of are believe that XX% sales legacy today’s roughly substantial far gas is as at XXXX, coal and roll Next the margin priced expect tons we’ll presently, margins X off contracts improvements shipments market see market. to XXXX, million at markets. night. price of gas $X.XX most maintain curve as over than higher little we are be in front but natural to out In better X being XXXX

of cause an is So, popped happens on MISO MISO and very modeled further today much here you end scenarios we start down many from stated And should have unforeseen electricity here if how I coal situation years This often. that XX, many generation believe period, or to the will that number very that weather I its at will grid I we will if generate positive replace to sit likely to sales plants be generation believe. we reach the what MISO Operator, Indiana’s manages They a why well who long That’s declaration collides on of power switch simply XX will is there – the capacity. is Independent could that free. starting mean, when that How come. announced have in continue generation, time emergency do estimates Hallador near than warning other will up do tight baseload down as some up on start these XX% to outages is you all until speaks believe be strong to And think that shut System be next XXXX. December, needed has Thus, have be that switches MISO, years in with on October not of I a states’ get us that will from that, with we the an harsh MISO three headlines generators an is cash demand at this years perspective. next emergency debt for that happen. for the think believe And three to loudly. in coal is positioned grids, and something which months. the things causes of now. longer these coal-fired a they them switches, with of call questions. carbon-free late, question on that flow not to we On open the XX of with

Operator

question Dustin comes from Shapir, CastleKnight. go Instructions] First Please [Operator ahead.

Dustin Shapir

question. Hi, for the taking and thank you

today’s at market extending today’s selling market comment And their can you’re price? the talk customers you’re whether you made about the of prices. Can about You that terms or in talk your seeing volumes also contracts? not you XXXX, some

Brent Bilsland

as as market So for higher new substantially are prices business. any far

talked future next is, that thing we a I to position think here, the the open point why we about year. out we have want for small

customer negotiations in to the with that. fill We’re

other will the that confident And is didn’t to buyers deal the have them don’t, full. We just we issue get we done. we’ve have. completely got we But before quite earnings. that frankly, confident very if we’re get like behind that would We’re

So, production. ramp up we’re going to

increase. But the equipment to we have a a see that. do price will increase, price for We

We’re cost seeing some increase.

the position larger much, we But XXXX, have or of better our sales we more in just quarter XXXX. open because here we out what of didn’t just next in – margins our see We’ll much the So, But percentage increase so here [ph] huge quarter a bigger third So, open doing we’re right? XXXX. think replacing pricing pricing up our are in think a are XXXX. versus in much position, we’re we year. margins we’re much have in slightly

seeing help we’re our increases. volume That EBITDA. will So,

We the on already structure the third come carry – But will You in had back have we’re issues and will some inflationary into quarter. our increase, and issues. we’re coming bit hopeful basically and That down. through those cost a little condition our then as – dissipate, volumes here pressure one hand. that fourth

be higher margins volumes So XXXX. will are we higher. think know year. will in next know We slightly volumes be We better

our we also that XXXX. really We spent out out there. a haven’t lot XXXX, in significant strongly pricing believe increases margins time have of

And We looks book there. have we out the gas XXXX. of – kind curve good business are are to some again, prices – we what still our about competitor and out in really

we So feel good.

years. stronger. improved, because three in we free a is a but that see of scenario, materially much three next out looking flow cash the this the next job in And the has and over debt we years good business paying visibility quarter, feel did Our just over much we from so de-leveraging market down de-leveraging clearer

happy about we’re So that.

Dustin Shapir

spot are Got where prices? helpful. And today’s Very it.

Brent Bilsland

negotiations. Well, again, ongoing we’ve got

much talking what So time what differences. of believe what’s about unusual and would spot We are today. much. still out, we of is about talking there period market is, be say lot we believe sold a spend the will into be you market in coal very would time I really this the and prices winter seems time still are to to dramatic think I on going pretty say, about, I be pretty short. period buyers short don’t

that there’s seen if tight about of I situation. headlines that when generation, You’ve and and unsuspected a see system, outage you The saying how so got but a of capacity generator to an tight, their cold an they’re have right? lot anywhere MISO it don’t do in now. they’re We’ve emergency replacing going is gets

saying. doesn’t And think their if publications, we have that’s releases frankly, So hold very say can is find that run But they’re press for loudly. we much and assets years. many stronger. And it what MISO in to agrees week you many, MISO quite Unfortunately, you look that. every with feel pricing And these it.

Dustin Shapir

XXXX, volume, we those today’s on levels? in today $X today’s on $X it. that $X million sold prices just little helpful. million roughly think think then XX% you expecting to very tons. million, again Got than $X XX% to That’s you it it XXX% could a fair as you’re higher about – of And Is of million. in Around produce thinking haven’t on higher or sold under levels? sell to

Brent Bilsland

you that’s not today’s level Well, we’re – from – that that. average that. not to answer again, negotiating sure what I I’m how today’s mean sure quite price? think – still

don’t really think to just be What to move somewhere We in average to is. do that price price that’s I XXXX. price? you’ll to I up what that see does So going out want speak know to our average XX% that significantly our that in XX% range higher.

Dustin Shapir

you much. Thank very

Brent Bilsland

welcome. Thanks. You’re

Operator

[Operator from Instructions] Our Lucas next Please B. ahead. Riley question comes of Pipes go FBR.

Lucas Pipes

And correctly, ton a a gentlemen bit there’s What kind afternoon base per Brent, that little little price touch dynamic pricing would mentioned If on would drop average in on in the little in the that contract are wanted the to then quarter. led increase question. we to and I on where be bit. my that’s unusual thanks the that. $X taking – your perspective XXXX, of good fourth versus QX I again given going price I hone and to appreciate today market a recall to in and for Hey XXXX. you maybe side wanted also

Brent Bilsland

I the we in much fit what I have seeing but did, we a is, third some would in as in third as the guess tons we’re the it not quarter. of ship quarter. we some think thought quarter. We Well, of thought spot little that fourth

higher when higher XXXX, and coal to fourth to look next of So carryover got have tons of we at contracts the shipped. concentration just those the quarter got of those XXXX a hitting year, you’ve mix we a the quarter first of new When you’re of have beginning. going prices tons mix of kind

kind see mix the just So what there. we I mean is different, of Lucas. that’s

Lucas Pipes

tons many sell That’s Got have how left helpful. And you for to it. do XXXX?

Brent Bilsland

part trying that we’re out, to frankly, and figure what quite negotiation Well, about. that’s the of is

tons – tons – to got produce period to going year. million for X.X producing So ramp we’re that We’ve in we’re the X.X million we’re now.

ton as We pace We’re we just XX probably million in about employees X.X last XX speak. at the days. hired

actually a comes got to put position. we X, which really So get in has through been to training, people those how maybe little ramp equipment fast because to question bought But trying hire, to the we’re can down more. September. We’ve the we strange

getting come had take out. And government in fantastic few word the unsuccessful Perhaps and finally a up practices some were those to we through September, the hiring So in our drying a money of September. then we employment then by allow October lines. back the early to people weeks

the you we happier say, hired you So to just right? all we in another candidates last the in to So that we’ve find right don’t it, so call got out, feel to a be you much got month, we’ve that. equipment. sales, in people the if weeks, feel Is answer we’ll let’s because people right? XXX that month. We XXX hire the the hired the many another would – to gosh, we know got We’ve almost that extrapolating five ought going people work. well, tomorrow hire take we’ve us just and able

just trying the seats them keep a We’re in efficient and people get trained operation. and right to get safe and

four over to do be two so. we don’t certainty many million will But to X tons we sell do year. we’re that we’re trying we able to to as will and what how Will months. that So great over gauge able tons, months. targeting next that to we that have have drive be That’s

Lucas Pipes

it. Got

capacity is process, also your that kind And scale negotiations on out – line that on with revenue of customers. can on is is how dependent and Or you the meaning line, understand up? much the the so like should I figuring

Brent Bilsland

could sorry, I repeat I’m catch question? Lucas, you the quite that. didn’t all

Lucas Pipes

is sell only Is is only is also scaling so it to in on the the you up place? on what Or customer? like, right a contingent getting really – customers? dependent your it on your labor for dependent have left the So getting upon capacity, this talking level, production you’re example, certain people, price additional additional to when question price, bringing are from

Brent Bilsland

bringing sufficient think they bot than need we We don’t customers winter. And for they’re are think more while justify that is level the our to going short in all a additional price on strong don’t is because to this we getting employees. the market think The for be going XXXX. No. – coal

here. chance So – to us they’re building not they have going a inventory be to look to it can the probably like to build first doesn’t XXXX they is XXXX in get

Now dependent November all whether had dependent, this here heard never of COVID. sat and XXXX, it’s and market – and I in

the But have of today all three of I doing So things up have have the leads we market what has decades. we’ve sales is here, change for got my history we Batson happen this been career, to Elliott strongest that in who that. seen our from

is have I the think you strongest would we market argue ever seen.

but are Could strong far six the things get contract it of looked of to Labor at And months so it. projects out get? can the hard out that labor? we is kick that a dissipate? hard closed There’s it Well because then that to well, the I thought The in are capacity people It justifies Could will get reopen Yes, So So other get. said, ago that the So I those permit this? mines, high-cost I in I is you’re enough is market, nobody and could And tons. we’ve putting enough how new time. just – tires they kind of wouldn’t and capacity it? were get? weighing. about even there market To long is seeing equipment? go simply it will isn’t kind – old mines right? dissipate gosh, the It’s dissipate tomorrow? can’t. of people all

projects, look, thing equipment, said, looked have right? and it looked we have number we the other the infrastructure. as at do is the at we’ve hire people, we we can as So We one have

We people quicker quicker in place. we place, the and had comes to have all up we get sell. flow cash The that the more in our tons

middle some too the to more on we’re Unfortunately, to XXXX. pretty we So right in say going the we’d of that. other trend general strong is negotiations, to like in elaborate color provide than much we’re finish significant so can’t

run going tons more in XXXX. We’re to

just won’t XXXX. run that of to going appreciation that see We’re significant lot healthy. period. that in margin be in It’s out nothing tons right XXXX pricing tells not there’s more a now tons and us And we’re

seeing be – market three to so going have far. but So year the XX-year is we’re to two still contracts, of commitments we experienced what markets that. seen not have other it we

Lucas Pipes

up Brent. hiring. I’ll have queue. it question impact How what’s you is this of helpful, a level? in into integrating the new workforce jump side, And mine back successful another productivity folks? labor and new scaling the month you on the with What’s said I’ll Very had of the scale is

Brent Bilsland

Well, to I said, XXX. employees, we’re XXX trying hire, trying add like think, we’re we I about

of If XXX come experienced are say, was before Half you’re else of greener people work looking XXX. and have that, thought let’s at And trying that we’re the underground that that us, are those been people. of XXX to September XX grass where back. the people, for to experienced has XXX never and somewhere that new probably end of

don’t take somewhere before. two done that take one there. Does expect them day on quarter? in to be quarters? really It’s We a clicking. just Does we’ve So that this

crystal XXX Would days. there. year. Feel of. this We’ve quickly have market. And I’ll or experienced, another much cut We to days XXX as very think. don’t Thanksgiving afraid than ago. holidays that XX hire line not labor coming. don’t can Just personally during – it’s that well, be We Years coming another companies know something It’s to how on just could very how just are blocking after better clear be in we’re month very in answer that. some on active the I tackling. we with say, got did got tight the not that us we first odd switching today got the It’s got is would ball coming. and what or the much somewhere work people. well It’s that And Christmas start we’ve and employees New for We people coming, very, a to a the we of

a we to it, combination. success. we – hope we a just winning So delivered to But to until overpromise found we’ve August winning We and we combination. the and trying we anybody. were hire we We don’t having weren’t September, want think found

Lucas Pipes

color and of I Brent. appreciated. best luck. comments helpful your Very Thank you and for

Brent Bilsland

Thank you.

Operator

question Ocean ahead. Instructions] [Operator you. Schlett go from Next from [ph] Capital. Henry Thank Please comes

Unidentified Analyst

Good Congratulations great a guys. quarter. on afternoon

explaining outlook debt the the job a the pay how accelerated to down future debt the done of good has of is goal be not-too-distant schedule You’ve company really explicit and improved the free?

Brent Bilsland

think for free Yes, that, XXXX. in I say million. is. $XXX bought out went I debt We were company it a and I roughly mean we net

feels strongly very We know more So last we something get balance opportunities much we front reducing that about. of call we that aggressive to company our that we as long on if every debt. Board our sheet, that’s about, come XXX focus right? we will on this every we that for know that something us, quarter, de-leverage not do I be over-levered. as in years feel come strongly that’s can And So see Board

been of have of If right? business of that’s hedged. about competitors we’ve been hedged, you part we’re and And And – go company that the so because the has out process, always this hedged a reason through well right? think Hallador, we lot why they well longer weren’t – well seen

have Now sold year do the I this job. very market? pricing I’d Would doing on out No, that. everything well probably spot had we were slot be of I wish that we nothing a Absolutely. and

Energy’s point XX-some owns to Board significant to interconnect. positive our a we’re portion reduce opportunities, in company. flow, now is very We we On as starting is We or percent able balance our this So will material Duke at the be the I acquiring going a and generate asset gives and were that right? out very it a think time, XXXX. de-lever figure every work this to cash company. in road how view debt as this we it sheet. We we of a on day down look same sheet at balance own of us our And transact that as platform at that it year. hard get

– the to we of the probably plant in plug we can’t have power into XXXX, grid rights the again, Now marine starting dark. June Whenever goes right?

And when and so for calls, out to on $X were the batteries period really asset. investments. is billion a that thereafter of time we accompany that up building that solar previous could we focused support think We asset said of on

money there’s for renewables. So plenty of out there

credit to we return at the we And can either point, cash much we to invest the goal than use of think from Our is that the flow share debt. coal We then the cash have is buybacks, can down the market us for. pay dividends gives our what a or tail cash shareholders, that flow solar that the business, longer – platform. in

platform. in So a we’re battery

it’s little there companies we’re But will this coal think near our because have we us work decisions, a I shaping So regard. enough sleep know we’re that down get up. we out think we in night unique free too the free. a not those at debt market get I thing we There’s now to at how make or better road. that I when debt good that’s to further where And the And many play.

Unidentified Analyst

a the debt And into future transaction $XXX familiar inform the bank mapped being – with very is the is current those with are going to lot that of with – million transactions because that something past valuation, history type? mean, So for the a times a last flow nine point you of cash out side, investment transaction negotiated high calls three all at in for return-wise. bar which is eloquently low. guys the you’re these that’s free months, the I quite on pretty

Brent Bilsland

hearing that I saying should stock. Yes, in is think I’m you’re What you. buy we what

Unidentified Analyst

just $XXX to as buying significant Well, negotiated no. want the support – I the Board company a don’t on debt to pay on of back know customers, as when is. on million possibly the know debt. where you stock level part bank think level the transaction And I the current of can’t of hands? of zero. of as transaction I Is had the of itself, for I to where the is see I frustration the that the the to stock but your that what in specifics, million. the frustration replaced talk I And for far Board is there firmly market goal in – I’m on valuation with the being a is would $XX-plus at was wondered value wise of that down go of it a when market’s a of discussion a the question out is behalf debt with the shareholder say, our current basis, take wouldn’t on valuation company? valuation color-wise on

Brent Bilsland

would frustration I right word, not guess. our a I the Board, think that be

that of free flow. feels they of large a company Board future think a that a percentage own I cash has our

number shareholders. talking Board at been out debt. way That’s think it not the one Would the I’ll has we’re put focus that I want this existing to our pay take that down to news something think we is, certainty I an having high here And company the and cash to asset that’s being of going off able to generate positive again, free good the pay that, have still flow. time. about.

in We long future. that battery opportunity and have into an an can the think investment provides business that the provide solar investing we

radar our as cash ensures three buy the flow in continue those get I we it we buy question. what as be for is security something down people’s putting shareholder? platform? more to your company? this invest – capital that our in hope Or we that will evaluating time? we Is that’s to years. use at for two and in road, I that the start think dividends that to years So is point use together to issue the And look we’ll contract best of say, the let’s at a now, position Is it it are the and the today? de-lever, developer for solar still platform in money I not mode next to this battery or to of shares answers it Is aggressively of the other the on just to even options. be

Unidentified Analyst

It you. does. Thank

Brent Bilsland

you. Thank

Operator

Next comes ahead. Corp. Instructions] go Hallmark of [Operator Lo from Please Investment question Andrew

Andrew Lo

Hello, costs exacerbated the year, Brent. our this question have have Obviously, that prices a to I’m gone that by returning fact little our of gone up. it’s pricing. obviously, down the disappointing

I’m that reflect improved kind little had what’s that much. of mind, but period Fortunately, booked but prices us for I’m recently it was not higher to time. nothing see only replicated. than I that look very in for heated But X.X you price And the And there as why was And second disappointing market a more that can’t tonnage getting before it’s than in gas certainly least slightly what business coal reflect time And commodity at what at price booked understand doesn’t book seeing a we’re earnings a report, quarter, now the the market tons that’s market. those gas business, me reflect a the forgive of that if not little of understanding and baffled we a in disappointing the booked I market market increase being doesn’t the by XXXX. be and I’m $XX.XX. got my the somewhat memory. at XXXX, we’ve but million for happening prices, our – is in better PPP, the hard for of to guess rescued for so that we’re And we’ve in my bit our in it than XXXX, hottest at doubled is the to lot more reflecting Well, been really back the doing, for up. XXXX booked much. on

Brent Bilsland

Well, quarter. And you’re XXXX, XXXX it let’s in in report was sales book. that have seeing out in second reported. tons just reported in booked, the not wasn’t didn’t what XXXX far we those go our We

the that tons but have tons. prices on confusion change. as tons tricky now sometimes gets We little out sometimes, gets these have didn’t and of XXXX, in we get a over, market see as And sales the lot because well, prices – booked, but then to some the tons, you It and have confused far little a change, price unpriced. I a we and we these see

to So, tons on years to just that in certain later particularly out we have the commitments aren’t customers price. or

year tons. XXXX legacy those perspective a third but So, in reporting the we here added are from quarter, the

the And the on pricing improvement so of business. unsold that see portion you’ll

Andrew Lo

only it’s X.X for that’s million all is that – booked been So XXXX?

Brent Bilsland

Correct.

We are And be likely together we book we million we’ll of a X for very to we put it’s XXXX. – for in sales will discussions tons. think think have XXXX able

year. It’s contracts going trying prices. improvement significantly to we’re tonnage old see much the and say, we flex why that because that can we that’s price expect contracts that – both margin XXXX not XXXX their So, to have that at in as up improvement in Andy legacy customers

open hire what it that people, people, We to And us be right? carryover some tons from an take able we then goes we have able quite will come our to XXXX longer have add tons think how won’t position, into XXXX. to as will able than part math be is we be or XXXX and produce of we into to more we fast Will much. produce will in

I’m can’t why to the to slight give look we at is you the day, absolute pricing certainty that’s that communicate of trying margin to we everyone on So XXXX in what end improvement see XXXX. like. But going

going will so. run open the higher little more a XXXX, maybe volume even is clarity. going to out our the volumes. roughly, see gas don’t than volumes at market when business. we you’re there? will strong. And we’re higher be is again, really in gas great have margin these same just XXXX position pricing is improvement, see The We So, sales What better and margins We’re XXXX, expansion to at right?

of there. the ramp lots ago. you prices drive So, guys years market pipeline constraints will production, of that some tougher couple to that think think capital down. We there’s gas a than We up it was if is get out

We’re public debt. pay want to companies down that they they seeing say shareholders, return cash the want to to

or get supply that seen expand, share in large being just these believe signals though capital additional response not ESG even rather part, for So price higher we shareholders for paid last in all for us these we’ve the year. dividends demand the gas, reduction, are than able or backs, all seeing oil of coal, expand, debt constraints to – we’re having capacity And think because from or of demand demand be expand. not lead things other to that’s

in said, a So seeing not we’re space, coal expansion. the like I of lot

run as all hard some, time to I’m have They’re be sure high-cost equipment. mines. have we the all up? hard getting a that be a assets time couple to know getting Will very seeing but as they’re going We’re old there they can going They’re labor. run. hard new there’ll pop of a competitors

supply muted than Time oil response well. to just as And So, years. past just coal. not We is going that’s think gas in tell. that will think and we for for be the more

Andrew Lo

Thanks. so. Hope

Brent Bilsland

you. Thank

Operator

John Moran, ahead. & Instructions] next Company. go Robotti Please is [Operator question Our

John Moran

I to and just follow clarify on last wanted question that that. up

above a million unencumbered customers. would booked of So Is anything existing that’s any with words, price contract not subject negotiation existing other X.X the that in something that contract. have tons XXXX. by in to you In by encumbered an be

Brent Bilsland

sales. be No, those new will

John Moran

not to But mechanism an pricing subject in existing contract? any

Brent Bilsland

No. out another to million looking X.X be We’ll tons we there. sell

John Moran

And competitors see XX%. right reason unencumbered Do sold into of an selling what have XXXX there’d a – couple if your or you disclose or? read no there now in or markets? being Is any can you you I is that, into could be visibility that. not guess, That’s have ton you

Brent Bilsland

prices, on it particularly into customers we discussing we with don’t have not our when in and – we negotiations significant. getting Again, active are may not

John Moran

to sense. get Trying

XXXX. that’s – sold or to sense visibility negotiated tonnage don’t If contract negotiations about your know with customers. Somebody I else’s into? you – I’m transaction or have something in you wondering of want just just any anything there and is what your for a that’s... if freely XXXX I ongoing

Brent Bilsland

We we right? are, a mean but do what collusion, I on de not gate the market. We terms our negotiating definitely that definitely. or Yes, are have. have know what their competitors

you. thank Okay,

John Moran

business been something or it that question me is acquired? can has renewable – you in you grid. own? the that that on legacy access the interest that remind other to Is mid-XXXX One you that disclosed? recently Is Or a that

Brent Bilsland

asset. the place we it So, we it obtain a relationship I where grid, no plant basically, the we from a rights a mean, plug physical into in. the the joint interconnection right company have they unplugged to they to power grid, obtained the we’ve the with have when legacy and assets, we plugs venture have not but grid, from, the the to obtained – development coal-fired acquired we the have

John Moran

acquire And right? you that did then when

Brent Bilsland

believe, this We of X June announced I year. that transaction,

John Moran

can’t I a Or why Or consideration? the did was for there you? a consideration was Like that But transaction? – that? was what select they

Brent Bilsland

So there’s the – of I no but money paid into transaction, upfront. can’t that details get there was

John Moran

they can Why you that why like about selected? you edge anything there why you would there? say Is the had – were

Brent Bilsland

We there’s and some value think a We – legacy to been on to. not that, of potentially one out to we prefer repeatable. that of would customer how do assets. have insight I think is their help we think how

so we to our on away the And call, really give don’t so. sauce want secret earnings

John Moran

been guess, and don’t you have No, working I thought I together. proprietary something anyway, ask. to I I’m hear I just, on I just there guys project understand it just I’d trying that a there’s while it’s for came the – you. if understand. or

Brent Bilsland

you. appreciate answer. I Thank to

John Moran

you. Thank

Operator

go question Shapir Instructions] have [Operator CastleKnight. Please from a from We Dustin follow-up ahead.

Dustin Shapir

guys. question answered. Congrats, My was

Brent Bilsland

you, Dustin. Thank right. All

Operator

you. Brent I’ll the This Please comments. call return questions. Bilsland to final Mr. back [Operator Instructions] for further have Thank time, we ahead. no go

Brent Bilsland

call join Hallador, again for time after you of Thank to talking very the year. you the us taking in and And everyone thank the today. look to forward their first to I much. interest for

Operator

is for today’s now presentation. you concluded. Thank attending call The

You now disconnect. may

Hallador Energy (HNRG) 9 Nov 212021 Q3 Earnings call transcript