Hallador Energy Company (NASDAQ:HNRG) Q3 2023 Earnings Call Transcript

Lawrence Martin: Right. The coal-to-gas switching thing and vice versa, right, it is always in play, right. Sorry, one last question on this topic perhaps. Regarding, again, the power market, are you mostly correlated to the Chicago hub, MISO hub, and even the nat gas in some way or is it more of like this summer with record heat throughout Texas or in the South for upwards of a month, were you able to capitalize on that this past summer or is it more of a regional, say through Chicago, should we think of it in those terms?

Brent Bilsland: Yes, it is definitely more important what the weather is Indiana through Chicago. And the gas price is closest to us matters the most, which, in that case, Chicago Citygate is one marker that we look at for sure.

Lawrence Martin: You weathered a bad summer that way. Chicago was as mild as it is been forever, right. And we are right south of you [indiscernible] right. I mean I -.

Brent Bilsland: Well, I think, look, we are very encouraged in that where there is a lot of new industrial demand showing up in the Midwest. Europe has had basically an energy crisis since the Russian invasion of Ukraine. And that is causing a lot of re-onshoring industry. I was with politicians yesterday who more than one said, look, Indiana has a great business climate, we are not sure if we have enough people, and we are not sure if we have enough power. And so Hallador being long power likes to be in that scenario. We like where we are at. There is going to be some volatility to our earnings because we do have a large open power position, and that is subject to market movements. That would be great. And there is a high end, there is a low end.

But I think, by and large, on average, will do really, really well. That is why we like the base of business that we are putting under it with our forward contracted sales. And we are encouraged by the most recent pricing that we saw at $56 a megawatt hour for multiple years.

Operator: Those were all the questions we have for today. So I will turn the call back to Brent for closing remarks.

Brent Bilsland: Yes, I want to thank everyone for taking the time to dial in and having interest in Hallador. And we are excited, very excited, about the future and what the Power division is finally starting to show everyone its capabilities of. And we look forward to more exciting quarters to come. Thank you.

Operator: Thank you, everyone, for joining us today. This concludes our call, and you may now disconnect your lines.