Jason Lustig: Okay. Okay. I appreciate that. If I flip to the coal operations segment of the 10-Q, I see this as $37 million in sales to the Merom plant that are eliminated in consolidation. And I would love to try and triangulate and better understand how I can reconcile that number with the $40.03 per megawatt hour cost at a variable cost at Merom and the $22.49 consolidated number. And maybe that can get us most of the way there for those who are on the outside and still confused.
Brent Bilsland: I’m not 100% sure I understand that question.
Jason Lustig: I’m trying to just – we can do our own math, I guess, on the outside to try and allay any confusion. But I am trying to figure out I guess, what was the cost or the price of the coal that was transferred and what is the right number? Is it 0.5 million tons, which I think I saw somewhere else in the 10-Q. Is there some other number that I should be using for this quarter? I can…
Lawrence Martin: So everything – and I will give you – I mean I’m not – you guys can do the math, but here is the numbers. We sold coal to ourselves for $75, which is in the Q. So we have to eliminate that. And then our costs were 40-some – I can’t remember off the top of my head where they are at in the Q. But then our costs for the quarter were $46 I think. So that profit has to be eliminated as you sell the coal to yourself. Now we did burn, but it is not just what we sold in sales, it is what we actually burned. There is some sitting in inventory that got eliminated as well.
Operator: [Operator Instructions] Our next question comes from [Tom Kerr] (Ph) with Saks Investment Research.
Unidentified Analyst: I think most of my questions were just covered. A couple of quick ones. As you guys continue to generate more free cash flow, refresh my memory if there is any restrictions on returning capital to shareholders through dividend, share buybacks, et cetera.
Brent Bilsland: Now at our current leverage ratio, we have no restrictions.
Unidentified Analyst: Okay. Great. And then lastly, you guys have indicated in the past that you may be looking for other power plants for acquisitions to add to that side of the business. Is that still good? Is that still a plan or any opportunities out there you can mention?
Brent Bilsland: Well, nothing we can list specifically by name. We are always looking, and we think Hallador is in a unique spot to potentially take advantage of those opportunities. So certainly, we are looking.
Operator: Our next question comes from Lucas Pipes with B. Riley Securities.
Lucas Pipes: Just a few quick ones for me, First, Brent, in terms of struggling on the coal side, what exactly is meant by that? What happened?
Brent Bilsland: I think you have units that run into bad roof. It could be could be that you have got presence of water or sandstone coming in close contact or close location to the coal. And when we get that sometimes you can fight through that and get to the other side of it. And other times, you have to back up, move over. Sometimes you back up, move over, back up, move over a second time. And then there comes a point where you just say, you know what, I’m going to move to a different portion of the mine and tackle this from a different angle or a different point of view. Moving over and attacking it again, that is pretty common. That happens. Major moves to a different area, that is pretty uncommon, and particularly for four units in one particular quarter. So I think we want to say that it was significant. It was unusual. And we think that that is behind us.
Lucas Pipes: Were all those four units working in close proximity when they encountered these difficulties?
Brent Bilsland: No.
Lucas Pipes: And the areas that you moved out of, are you going to move back towards them in due course or would you say, for the foreseeable future, it was just too tough, you don’t want to go back there?
Brent Bilsland: Yes. I mean sometimes you just move around to the other side of it, right. There could be a good area of coal that can be a year or two of good mining and you just need to access that from a different location. So I don’t want you to lead you to believe that we are abandoning large portions of our reserve. That is not the case at all. We are just attacking it from a different point of view.
Lucas Pipes: Got it. Okay. That is helpful. And then I want to go back to your comments earlier on hedging versus bilateral agreements. And it sounded like there are certain advantages on these bilateral agreements. Does it come down to force majeure provisions? Is that really the difference?
Brent Bilsland: No. I mean it is pretty common to have either firm sales or unit contingent sales and a bilateral agreement with a particular customer is a very bespoke agreement. And I would almost argue that no two agreements like that are exactly the same. Whereas, hey, if I’m just jumping on ice and buying or selling a power contract, that is a very cookie-cutter, fixed agreement, it is different. And it takes a lot more risk, right. You can get a margin call if you are on ice. I can’t get a margin call for my customers. We have to have contingent power. So from a risk perspective, I think we have put ourselves in a really good – what we say is a good foundation of business. I don’t know that we can sell all of our power under that particular format, so we will see.
