HNRG

Image source: The Motley Fool. Monday, Aug. 10, 2026 at 5:00 p.m. ET Chairman and Chief Executive Officer - Brent Bilsland Chief Financial Officer - Todd Telesz Operator: Good afternoon. Thank you for attending Hallador Energy's Second Quarter 2026 earnings conference call. [Operator Instructions] As a reminder, this call is being recorded. Now I'd like to turn the call over to Sean Mansouri, the company's Investor Relations Advisor with Elevate IR. Please go ahead, Sean. Sean Mansouri: Good afternoon, everyone. We appreciate you joining us to discuss our second quarter 2026 results. With me today are Chairman and CEO, Brent Bilsland; and CFO, Todd Telesz. This afternoon, we released our second quarter 2026 financial and operating results in a press release that is now on the Hallador Investor Relations website. Today, we will discuss those results, as well as our perspective on current market conditions and our outlook. Following prepared remarks, we will open the call to answer your questions. Before we begin, a reminder that some of our remarks today may include forward-looking statements subject to a variety of risks, uncertainties, and assumptions contained in our filings from time to time with the SEC and are also reflected in today's press release. While these forward-looking statements are based on information currently available to us, if one or more of these risks or uncertainties materialize or if our underlying assumptions prove incorrect, actual results may vary materially from those we projected or expected. In providing these remarks, Hallador has no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law to do so. And with the preliminaries out of the way, I'll turn the call over to Chairman and CEO, Brent Bilsland. Brent Bilsland: Thank you, Sean, and thank you, everyone, for joining us this afternoon. We are now halfway through 2026, and I would describe our year so far as two stories running side by side. The first is operational. We spent the second quarter putting money and downtime into Merom. Most of it planned, some of it not, and the results show it. The second story, and in our view, by far the more important one, is the continued transformation of the company into a multi-fuel independent power producer. I want to start there because we have made real progress on our natural gas generation project at Merom. We have now formally named that project Turtle Creek Gas, or Turtle Creek for short. Turtle Creek is a proposed 460-megawatt simple cycle natural gas-fired plant project that would meaningfully expand and diversify our dispatchable generation platform. Let me walk you through where things stand. First, the equipment. I, along with other members of our management team, recently inspected the turbine equipment and disassembly process with the owners and engineer personnel from Siemens. We were pleased with what we saw. The equipment is in good condition, and disassembly and packing are well underway with a substantial Siemens workforce on-site. We continue to expect shipment of the equipment in September. Second, the interconnection. Turtle Creek's interconnection application entered MISO's Expedited Resource Addition Study, known as ERAS, on June 2. We expect to receive the results of that process, including the required system upgrade costs, in mid-August, and indications to date from the study have been constructive. Following our review, we are targeting a final investment decision and execution of a generator interconnection agreement in September. Third, project economics and financing. In our experience, project budgets tend to move in one direction as scopes firm up higher. Ours is moved the other way. As the equipment, restoration and construction scopes have become better defined, we now expect total project costs to be below $800 million, or in the $1,700 per kW range. We have moved our targeted commercial operations timeframe forward to the second half of 2028. In construction, low cost and fast rarely travel together. We believe Turtle Creek offers a credible pathway to both. One of the lowest capital cost peaking plants currently being developed on a timeline years ahead of many comparable projects. In parallel, we are finalizing the construction scope and advancing financing discussions as we evaluate the appropriate capital structure, with the objective of financing the project with little to no equity dilution. Interconnection, construction, and financing are the principal remaining steps to get us there. None of this progress is an accident. It is the product of the same patient step-by-step approach that has carried our transformation from the beginning. Six years ago, we were an underground coal mining company. We acquired a 1-gigawatt interconnection, then the plant that utilizes it. We began marketing its long-term output. This year, our patience paid off in two landmark capacity agreements. First, the three-year agreement we executed in March with an investment-grade counterparty at approximately 2x our historical contracted capacity pricing. Second, the 12-year agreement behind it that together total approximately $1.1 billion of contracted revenue. These agreements increased our forward sales position, which now sits at $2.4 billion, placing Hallador in a substantially sold forward position on accredited capacity for approximately the next 14 consecutive years with commitments extending through 2040. Turtle Creek is the next step in that transformation, and it is advancing on schedule. I also want to remind everyone how we think about this market because it explains how we have built our contract book. In our view, capacity and energy run on different clocks. For large load customers, particularly data centers, access to accredited capacity is the gating factor. Without it, projects cannot move forward. That is why capacity markets have tightened and repriced ahead of the physical around-the-clock energy demand these developments will ultimately bring. As these projects are built and begin drawing power from the grid, we believe energy demand will accelerate, and energy pricing will follow. We have constructed our portfolio to participate in both phases. Our long-dated commitments are anchored in accredited capacity where repricing has already arrived and where we have contracted through 2040. Our energy commitments by design are shorter dated. Beyond the next few years, our energy position is largely open. Preserved for the repricing we believe is beginning now. As it arrives, we intend to monetize that open position with the same discipline and patience we brought to capacity, and a 460-megawatt peaking asset at Turtle Creek would give us even more dispatchable capacity and energy to bring to the market. At the same time, the market keeps confirming our thesis. We are seeing robust demand for accredited capacity and energy from a growing and increasingly diverse set of counterparties and are working towards making additional forward sales before the end of the year. With $2.4 billion of revenue already contracted at the segment level and more sales on the way, we believe Hallador offers investors a degree of revenue visibility that is among the strongest in the sector. We are speaking with meaningfully more counterparties today than we were in the past, and the demand signals are increasingly visible right outside our windows. A large data center project has broken ground adjacent to our property, and another project is in the early stages of development on the other side of the plant. You do not need a consultant's report to see where power demand in our region is headed. You can see it from the parking lot. Now, turning to the second quarter, operationally the second quarter is traditionally our lightest period of the year, as we take 1 of Merom's two units offline each spring for an approximately 60-day scheduled maintenance outage. This year's outage at Unit 1, we completed major reliability upgrades designed to address the unplanned downtime the unit had experienced in recent quarters. Unit 2 performed well over the course of the quarter, however, the limited unplanned downtime it did experience coincided with periods of elevated market prices, which magnify the financial impact by requiring us to purchase power at high prices to meet our delivery obligations. Together, these factors weighed on our second quarter results, but do not, in our view, reflect the earnings power of the plant. With the scheduled outage behind us and the reliability investments in place, we believe Merom is positioned to run more reliably going forward. We expect generation volumes to improve sequentially in the third quarter. I want to be clear about what the planned maintenance expenditures will bring. We invested substantially in the plant during the outage, and the condition of the plant is better for it. We expect that improved conditions to show up where it counts in reliability, availability, and operating performance over time. Money spent keeping a productive asset sound is not money lost. It earns us a return every hour the plant runs when the grid needs it most. Reliability at Merom matters more than ever, both because MISO increasingly depends on dispatchable resources during peak demand, and because Merom sits at the center of our vertically integrated platform. When the plant runs efficiently, it supports electric sales, creates consistent internal demand for coal, improves mine productivity at Sunrise, and enhances operating efficiency across the business. When performance at Merom falls below planned levels, those effects extend throughout the platform. With the outage behind us and both units running more effectively, we expect generation volumes to improve sequentially in the third quarter. I would note that power pricing remains uncertain, and the third quarter of last year benefited from particularly favorable power market conditions, creating a more challenging year-over-year comparison. So we are focused on sequential operational improvement and on carrying that improved availability into the balance of the year beyond. In summary, quarters like this one are the price of owning and improving a durable asset. Q2 reflected the important reliability and efficiency work we completed at Merom, along with the temporary challenges that came from it. The more important story is the progress we are making on selling out the remainder of Merom's capacity and energy, the advancement of our Turtle Creek Gas Project, its improving economics, and the accelerating demand we are seeing from an expanding set of counterparties. The fundamental signals across our market remain constructive, and we believe Hallador is well positioned to compound shareholder value over a multi-year horizon. With that, I'll turn the call over to Todd to take you through our financial results. Todd Telesz: Thank you, Brent, and good afternoon, everyone. Jumping into our second quarter results. Electric sales for the second quarter were $59.5 million compared to $60 million in the prior year period, while third-party coal sales increased to $40.6 million compared to $38.1 million in the prior year period. Electric sales in the second quarter benefited from higher accredited capacity revenue, which increased 70% year-over-year to $18.6 million. Total energy sales volume increased 17% compared to the prior year period, while the average price per megawatt hour for delivered energy declined to $41.69 from $52.66. The increase in third-party coal sales during the second quarter was driven primarily by improved pricing, as a 9% increase in our average third-party price per ton more than offset a 2% decrease in tons sold to third parties. Sunrise also sold 59,000 incremental tons to Merom during the quarter as the plant prepared for summer demand. On a consolidated basis, total operating revenue decreased to $101.5 million for the second quarter of 2026, compared to $102.8 million in the prior year period. Net loss for Q2 2026 was $15.2 million compared to net income of $8.2 million in the prior year period. Cash flow used in operations in the second quarter of 2026 was $23.9 million, compared to cash flow provided from operations of $11.4 million in the prior year period, with the decrease primarily reflecting the outage-related decline in profitability, higher purchase power costs, and working capital investment, including cash invested in inventory and parts and supplies. Adjusted EBITDA, a non-GAAP measure that is reconciled under earnings press release issued earlier today, was negative $2.9 million for Q2 2026 compared to $3.4 million in the prior year period. We invested $26.3 million in capital expenditures in the second quarter of 2026 compared to $13.1 million in the year-ago period, primarily reflecting the reliability upgrades completed during the planned outage at Merom, as well as development spending associated with Turtle Creek. With the planned outage complete, we expect the pace of maintenance capital spending to moderate through the balance of the year with full-year 2026 capital expenditures expected to remain consistent with 2025 levels, excluding investments related to Turtle Creek. As of June 30, 2026, our forward energy and capacity sales position was approximately $1.6 billion, compared to $571.2 million at March 31, 2026, and $619.7 million at June 30, 2025. When combined with our third-party forward coal sales of $236.5 million, total contracted revenue on a consolidated basis was approximately $1.8 billion. Including intercompany sales to Merom, our total forward sales book on a segment basis was approximately $2.4 billion. These figures now include the 12-year capacity agreement signed in May 2026. During the quarter, we took additional steps to maintain flexibility under our capital structure. On May 15, we drew the $45 million available under our delayed draw term loan and used a portion of the proceeds to repay $8 million outstanding under our revolving credit facility. Hallador had $45 million of total bank debt at June 30, 2026, compared to no outstanding bank debt at March 31, 2026, and $30 million at December 31, 2025. Total liquidity at June 30, 2026, was $84.2 million compared to $97.5 million at March 31, 2026, and $42 million at June 30, 2025. The sequential decrease reflects cash deployed during the planned outage, capital investment, and the associated working capital build. At quarter end, total liquidity consisted of $29 million of unrestricted cash and cash equivalents and $55.2 million of additional borrowing capacity under our revolving credit facility. We believe our credit facility, together with our current liquidity position, provides the flexibility to manage working capital and fund our ongoing operations and investments at Merom. As we mentioned in June, our financing strategy for Turtle Creek is considering a combination of project level and structural alternatives, including equipment financing, structured debt, and similar instruments designed deliberately to preserve flexibility with low to no equity dilution while retaining our focus on balance sheet integrity. We are well underway in financial planning and look forward to providing updates as we make progress in the third quarter. With that, operator, we can now open the line for questions. Operator: [Operator Instructions] Our first question comes from the line of Julien Dumoulin-Smith from Jefferies. Your question, please. Unknown Analyst: It's [ Kutz Arthur ] on for Julien. Congrats on the quarter. Just wanted to ask you a little bit more on the gas project. Seems like you're making a lot of progress there, costs coming in below expectations. One, could you give us some color on what's driving costs to be a little bit below expectations? Is it mostly interconnection costs like you guys had thought of, or are there other factors? And then separately, could you share more color on how the off-take agreements and conversations are trending? What kind of customer interest are you seeing for the gas project? Brent Bilsland: Yes, certainly. You know, I think as we think about the gas project, Turtle Creek, what's changed to lower that budget? I think last quarter we said it would be less than $900 million. Now we're saying it's less than $800 million. Then coupled with that, we've accelerated the COD to the second half of 2028. When we announced this in June, I mean, we had ranges for what things would cost. Now, you know, those scopes are more defined. You know, it's, the owner's engineer and I were over looking at the equipment. It's in excellent condition. We were happy with what we saw. Disassembly is underway. There's a substantial Siemens workforce on site. Shipments still remains on schedule for September. As the equipment, the restoration, the construction scopes have firmed up, the numbers have come in better than we initially assumed. The other driver is this is not a greenfield project. We're building at Merom. We already own the site, the water, the infrastructure. That's how, this project gets down to roughly $1,700 a kW when we're seeing other projects price well above that and coming in a year or two behind us. I think that's just what makes this project special in our mind is that we have a cost advantage. We have a speed to market advantage. In AI, it's all about speed to market. When you talk about marketing, of course, we point to -- and on our sales table we've added more definition there as to some of the work that we've done earlier in the year so that speaks to pricing. I think that will perhaps be at numbers higher than what some of the analysts in the market thought. We just continue to see more and more interest. As we alluded to in our prepared remarks, we really think that we will add to the contracts that we've already put in place this year before the year is out. That is our goal. I think we, today we feel really good about that. If you look at what we've been doing, we've been pricing a coal asset, and a list of buyers who are interested in buying output from a coal assets output is smaller than that of gas. We think the market, from what we're experiencing, there's a much greater Rolodex that you can call up to talk to about the gas plant, and we're seeing that interest level, particularly as other states are putting more and more restrictions on new data center builds, we think that's funneling more of that capex spend towards the state of Indiana. We're seeing that in our backyard. You know, we said in our prepared remarks we've got a pretty significant project that's broken ground. Anybody who gets Google Earth Live can see photos of that. It's pretty impressive to see a 1,000-acre development contiguous to our property, pouring foundations and moving right along. We've had a second project developer buy property on the other side of our plant contiguous to us. That said, we sell in front of the meter, we can sell to any place in MISO Zone 6, which is the state of Indiana, the northern third of Kentucky. We feel really good about the demand perspective at this time. We look forward to delivering on that before the year is out, particularly on Merom. It'll probably take a little longer to market Turtle Creek just because, we've been working on Merom a little bit longer, but we're excited about what we see. I hope that resonates. I think this plant, we're excited about it. We think it's a big deal for our company and expect to make more announcements before the year's out. Operator: Thank you. And our next question comes from the line of Nick Giles from B. Riley Securities. Your question, please. Henry Hearle: Good afternoon, everyone. This is Henry Hearle on for Nick. So in your prepared remarks you mentioned the turbine disassembly is underway and there's a substantial workforce on that site there. Do you guys have any contingencies if the disassembly or logistics slip and the shipment is pushed to September? Just any color there would be helpful, or pushed out from September, sorry. Brent Bilsland: Yes, look, we're not too concerned about the timing of the shipment. We've got plenty of wiggle room there. Always like to get the asset sooner rather than later. Always like to get it online sooner rather than later. We're pushing to get that done as quickly as possible. That said, I don't think that getting the equipment to ship is the long pole of the tent. We're on a pretty short timeframe, right? Or we're saying COD roughly two years, right? Last half of 2028. We think that's a very marketable time for that project, and today as we look about where we're at, I think we're excited about the potential success of that project. So, not too concerned about the shipping date. Henry Hearle: Got it. That's helpful, thank you. And then just on financing, obviously the goal is to minimize equity dilution. You kind of went through a couple different financing structure in the prepared remarks, what are you leaning most towards at this time and when do you expect to disclose that? Todd Telesz: Thanks, Henry. It's Todd Telesz. I think as Brent alluded to during the course of the call, I think, Turtle Creek has three primary advantages when you're talking to financing counterparties. One is the capital cost. Two is the speed to market. Ultimately, those drive long-term affordability, which makes it a very attractive asset to contract with. As the former, as [ Kutra's ] question was really around the offtake agreements. I think when you look at those three factors combined with what we view as a very robust financing market, in particular for equipment financings. That's extremely helpful for us. As you know, we also have the benefit of having the Merom coal-fired asset that has substantial contracts put in place and working hard at contracting even further on the Merom assets. I think those are very financeable contracts. A couple different pockets of debt capital. Those -- between those things, I think then when you look out into the future, you look at where we think the financial performance of the business is in the latter part of this decade, all those should be supportive of bringing on leverage onto this project and minimizing the amount of dilution for our current shareholders. Henry Hearle: Thank you, Todd. That's very helpful. And then just on that same point, is there any possibility for government support from the DOE and the likes in financing the Turtle Creek project? Is that something that you're exploring currently? Brent Bilsland: Our DOE financing has really been focused on some of the things we're doing at Merom. We don't see any DOE financing for the Turtle Creek Gas asset at this point in time. Operator: And our next question comes from the line of Matthew Key from Texas Capital. Your question, please. Matthew Key: In regarding the DOE, in June, you announced the $27 million in DOE funding to help modernize Merom. I was just wondering, when would you want to complete those upgrades? I'm just trying to get a sense of timing for that specific project. Brent Bilsland: Yes, we announced a month ago that we were selected to negotiate for $27.2 million of grants from the DOE that were to be used for our ELG compliance. That document is rounding third. We anticipate some of that work will get done yet this year. We should see some dollars matched in that probably in the fourth quarter, and then continuing on into '27 and '28. Matthew Key: Got it. That's helpful. And I guess you mentioned you being relatively comfortable being open in your forward energy book over the medium term, just given the expectations for rerating and pricing. I was wondering if there are any specific price signals or increase in the curve you'd want to see before facilitating a more aggressive stance in forward energy sales? Brent Bilsland: Well, I think we have seen some upward movement in the curve this year. Some of the conversations are advancing along those levels. I wouldn't be surprised if you saw some energy sales from us yet this year. We'll probably take more of a layered approach, with some sales made this year and some in future years. Certainly not afraid to contract if the pricing signals are right for us, but we certainly don't feel any urgency. Capacity is more illiquid market. Energy is a very liquid market. There's a lot of ways to sell energy. There's a few ways to sell capacity. That said, where we're really seeing the most pinch point is in the capacity markets, which is why we've been aggressive at Merom, the coal units, 2/3 of that is roughly sold through 2040. Uur goal is to sell the balance of that out yet this year on multi-year contracts. We seem to be -- the market seems to be supportive of that, which is why we're feeling confident about the demand and the robustness of that for Turtle Creek. We think this is an asset, right? It's a peaker plant, right? It primarily provides accredited capacity, and it does so at a price point and a timing that we think is just right up the fairway of what this market wants. That's kind of where our head's at on energy and capacity, Matthew. Operator: Thank you. And our next question comes from the line of Jeff Grampp from Northland Capital Markets. Your question, please. Jeffrey Grampp: I wanted to circle back on the contracting kind of process or decision tree, if you will. When we think about incremental capacity contracts on coal versus gas project, it sounds like, you know, to your comment of a deeper Rolodex on the gas side, should we think about that project being more executable, if you will, over coal over the coming months? Or is there a, I guess path of least resistance between those two that suggests one is further along versus another that we should expect? Brent Bilsland: Yes, look, I mean, I think we have shown we are executing on coal. We're buyers of the gas that -- think of it this way. If there's probably three to four times the number we can talk to of potential buyers for a gas asset than there is of a coal asset. We're having great success on the coal side. We're just further along on the coal side because that plant exists and is running today. Whereas Turtle Creek, we still have yet to make the final investment decision. Buyers want to see that project, take a couple steps forward. Quite frankly, we want it to take a couple steps forward. We're waiting to hear what the system upgrade costs are for Turtle Creek. We think we may learn that yet this week. We have a high degree of confidence there, because we use the same vendors that MISO uses to do their studies. We've already done those studies. Now, it doesn't matter what we think. It matters what MISO thinks. We think this is a check-the-box exercise, but we still have to hear the number before we can make that final decision. We also make, I think good advancements on the financing side with those discussions. As we put those two things together, we think we're close to moving forward with that project. We have great confidence in that because we think we'll have Merom essentially sold out. Merom, the company really doesn't have a lot of debt. When you look at what's the value of that asset, it doesn't have a lot of debt, and now we're adding Siemens turbines to the mix. I think it's a very financeable project, and quite frankly, the response from the market is justifying our opinion. Again, the other thing that's different about this project is we actually have physical equipment. The other projects have queues, right? Queue positions get pushed out. We've got to load something on a boat and ship it across the sea. I've been over to review that personally. I don't want to jinx ourselves but quite frankly it's going quite well and it's a pretty simple process. We'll know more on that in a month. We expect it to be on the boat. Jeffrey Grampp: Sounds good. Okay. I appreciate those details. For my follow-up on the energy side of things, is it fair to think that market is more, I guess, prone to at least relatively shorter-term contracts versus a 10- or 15-year capacity contract? Or are those opportunities still out there where we could see a longer-term energy contract as well. And do you guys have interest in that on your side as well? Brent Bilsland: There is interest in buying longer-term energy, and we have interest in doing that. We'll see if we can deliver on that before the year's out. Operator: Thank you. And our next question comes from the line of Jake Sekelsky from Alliance Global Partners. Your question, please. Jacob Sekelsky: Just going back to Turtle Creek, you mentioned CapEx initially came in below $900 million and now we're below $800 million. I'm just curious, are there any other levers you feel you might be able to pull that could drive this even lower as we get through FID, or do you feel you've kind of flushed all that out? Brent Bilsland: Well, we certainly are dialing in more. I think there's a chance that project cost could go down yet again, but we want to make sure we don't have any surprises, right? As things get loaded on the boat, get delivered to Siemens, we'll know more about that front, but we think we've got enough contingencies in there. We feel we're in pretty good shape. Again, we already think this project is, magnitudes lower costs than some of the other projects that we've seen that are competing against it, and we have a time advantage. That's where the market seems to be paying up is the speed to market play. Talk to me about electronics today and compute today, not years from now. We think we've got something special. I hope that resonates. Jacob Sekelsky: Fair enough. Okay. And then, just from a financing perspective there, I'm just curious, are there any strategic avenues that you're exploring, or are you thinking more along the traditional lines for the broader financing package? Todd Telesz: Yes, I think right now, Jake, I think we're very focused on more traditional financing packages, whether it be strictly equipment financing, quasi-project financing, and or even corporate financing. I think more traditional financing efforts focused on what we can do ourselves here at Hallador. Operator: Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Brent for any further remarks. Brent Bilsland: Yes, I want to thank everybody for taking the time to join us today and your interest in Hallador. We're excited about our company, the work that we've put into Merom, the work that we're putting into Turtle Creek, and we just think pound for pound, this is going to create exciting opportunities for the investor in Hallador. Thank you for your time. Operator: Thank you, ladies and gentlemen, for your participation at today's conference. This does conclude the program. You may now disconnect. Good day. Before you buy stock in Hallador Energy, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Hallador Energy wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Hallador Energy (HNRG) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Revenue: Total operating revenue decreased to $101.5 million in Q2 2026, compared to $102.8 million in the prior year period. Electric Sales: $59.5 million in Q2 2026, compared to $60 million in the prior year period. Third-Party Coal Sales: Increased to $40.6 million, compared to $38.1 million in the prior year period. Accredited Capacity Revenue: Increased 17% year-over-year to $18.6 million. Energy Sales Volume: Increased 17% compared to the prior year period. Average Price per MWh: Declined to $41.69 from $52.66 for delivered energy. Net Loss: $15.2 million for Q2 2026, compared to net income of $8.2 million in the prior year period. Cash Flow from Operations: Used $23.9 million in Q2 2026, compared to $11.4 million provided in the prior year period. Adjusted EBITDA: -$2.9 million for Q2 2026, compared to $3.4 million in the prior year period. Capital Expenditures: $26.3 million in Q2 2026, compared to $13.1 million in the prior year period. Forward Sales Position: Approximately $1.6 billion as of June 30, 2026, up from $571.2 million at March 31, 2026. Total Forward Sales Book: Approximately $2.4 billion on a segment basis, including intercompany sales. Total Liquidity: $84.2 million at June 30, 2026, compared to $97.5 million at March 31, 2026. Warning! GuruFocus has detected 6 Warning Signs with CODI. Is HNRG fairly valued? Test your thesis with our free DCF calculator. Release Date: August 10, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Hallador Energy Co (NASDAQ:HNRG) is advancing its Turtle Creek natural gas project, with total project costs now expected to be below $800 million, down from previous estimates, and a targeted commercial operations date moved forward to the second half of 2028. The company has secured two landmark capacity agreements, totaling approximately $1.1 billion in contracted revenue, which has increased its total forward sales position to $2.4 billion, providing strong revenue visibility through 2040. Management reports robust demand for accredited capacity and energy from a growing and diverse set of counterparties, with a large data center project breaking ground adjacent to its property, signaling strong regional power demand. The company is exploring financing options for Turtle Creek with the objective of minimizing equity dilution, focusing on equipment financing, structured debt, and similar instruments. Hallador Energy Co (NASDAQ:HNRG) expects generation volumes to improve sequentially in the third quarter, as the planned maintenance outage at its Merom plant is complete and reliability investments are in place. The company's third-party coal sales increased year-over-year, driven by a 9% increase in average price per ton, and it sold 59,000 incremental tons to Merom in preparation for summer demand. Hallador Energy Co (NASDAQ:HNRG) reported a net loss of $15.2 million for Q2 2026, a significant decline from net income of $8.2 million in the prior year period. The company's adjusted EBITDA was negative $2.9 million in Q2 2026, compared to positive $3.4 million in the prior year period, reflecting higher purchase power costs and planned maintenance expenses. Cash flow used in operations was $23.9 million in Q2 2026, a sharp reversal from cash flow provided by operations of $11.4 million in the prior year period. The average price per megawatt-hour for delivered energy declined to $41.69 from $52.66 in the prior year period, impacting electric sales revenue. The company drew $45 million from its delayed draw term loan, increasing total bank debt to $45 million at June 30, 2026, from zero at March 31, 2026. Total liquidity decreased sequentially to $84.2 million from $97.5 million at March 31, 2026, due to cash deployed during the planned outage and capital investments. Q: Can you provide more color on what's driving the lower-than-expected capital costs for the Turtle Creek gas project, and what kind of customer interest are you seeing for its output?A: Brent Bilsland (Chairman and CEO) explained that as equipment restoration and construction scopes have become better defined, the project budget has decreased from under $900 million to under $800 million (roughly $1,700 per kW). This is not a greenfield project; it's being built at the existing Merom site with water and infrastructure already in place, giving it a significant cost and speed-to-market advantage over comparable projects. Regarding customer interest, he noted a much larger pool of potential buyers for gas-fired output compared to coal, and that interest is growing, particularly as other states impose restrictions on data center builds, funneling capital expenditure toward Indiana. He highlighted that a large data center project has broken ground adjacent to their property, and another is in early development on the other side of the plant. Q: What are the primary financing structures you are leaning toward for Turtle Creek, and when do you expect to disclose the plan?A: Todd Telesz (CFO) stated that the project's low capital cost, speed to market, and long-term affordability make it very attractive to financing counterparties. He noted a robust financing market, particularly for equipment financing, and highlighted the financeable nature of the long-term contracts already secured for the Merom coal asset. The strategy is to combine project-level and structural alternativessuch as equipment financing and structured debtto minimize equity dilution for current shareholders. He expects to provide updates as they progress in the third quarter. Q: Is there any possibility of government support, such as from the DOE, for financing the Turtle Creek project?A: Todd Telesz (CFO) clarified that DOE financing has been focused on initiatives at the existing Merom plant, such as the $27.2 million grant for ELG compliance. He stated they do not see DOE financing for the Turtle Creek gas asset at this point in time. Q: Regarding the $27 million in DOE funding announced in June for Merom, when do you expect to complete those upgrades?A: Brent Bilsland (Chairman and CEO) said they were selected to negotiate for the $27.2 million grant for ELG compliance. He anticipates some of that work will be completed this year, with dollars matched potentially in the fourth quarter, and continuing into 2027 and 2028. Q: Are there specific price signals or increases in the forward curve you would want to see before taking a more aggressive stance on forward energy sales?A: Brent Bilsland (Chairman and CEO) noted they have seen upward movement in the curve this year, and conversations are advancing at those levels. He wouldn't be surprised to see some energy sales this year, but they will take a layered approach, making some sales this year and some in future years. He emphasized that capacity is a more illiquid market and the primary pinch point, which is why they have been aggressive in selling Merom's capacity through 2040. The goal is to sell the balance of that capacity out this year under a multi-year contract. Q: Should we think about the gas project being more executable over coal in the coming months, or is one further along than the other?A: Brent Bilsland (Chairman and CEO) explained they are further along on the coal side because that plant exists and is running today, whereas Turtle Creek has yet to reach a final investment decision. Buyers want to see the project take steps forward. They are waiting to hear the system upgrade costs from MISO, which they expect to learn soon, and have high confidence in the outcome. He also highlighted that unlike many other projects with queue positions that get pushed out, Hallador has physical equipment ready to ship, which is a significant differentiator. Q: Is the energy market more prone to shorter-term contracts versus the 10- or 15-year capacity contracts, and are there opportunities for longer-term energy contracts?A: Brent Bilsland (Chairman and CEO) confirmed there is interest from buyers in longer-term energy contracts, and Hallador has interest in doing that as well. He indicated they will see if they can deliver on that before the year is out. Q: Are there any other levers you can pull to drive the Turtle Creek capital cost even lower as you get through FID, or have you flushed all that out?A: Brent Bilsland (Chairman and CEO) said they are continuing to dial in the numbers and there is a chance project costs could go down again, but they want to ensure there are no surprises. He believes they have enough contingencies in place and are in good shape. He reiterated that the project is already at a magnitude lower cost than competing projects and has a significant time advantage, which is where the market is paying up. Q: Are you exploring any strategic avenues for the broader financing package, or are you thinking more along traditional lines?A: Brent Bilsland (Chairman and CEO) stated they are focused on more traditional financing packages, whether it be strictly equipment financing, quasi-project financing, or corporate financing. The focus is on what they can do themselves at Hallador. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management is pivoting the company from a legacy coal miner to a multi-fuel independent power producer, anchored by the newly named 460-megawatt Turtle Creek Gas project. The second quarter's financial performance was impacted by a planned 60-day maintenance outage at Merom Unit 1 and unplanned downtime at Unit 2 that coincided with high-price market periods. Strategic positioning focuses on a 'two-clock' market theory where capacity reprices ahead of energy; Hallador has secured $2.4 billion in forward sales to capture this capacity tightness. The company is intentionally keeping its energy position largely open beyond the next few years to monetize anticipated energy price acceleration as data center loads materialize. Vertical integration remains a core driver, as efficient Merom operations create internal coal demand and improve mine productivity at the Sunrise facility. Management attributes the successful $1.1 billion in recent capacity agreements to a patient, step-by-step approach to marketing the plant's 1-gigawatt interconnection. The Turtle Creek Gas project timeline has been accelerated, with commercial operations now targeted for the second half of 2028. Total project costs for Turtle Creek are now expected to be below $800 million, or approximately $1,700 per kW, due to refined construction scopes and existing infrastructure advantages. Management expects to reach a final investment decision and execute a generator interconnection agreement in September 2026 following MISO study results. The company aims to finalize additional forward sales for Merom's remaining capacity and energy before the end of 2026 to further increase revenue visibility. Financing for the gas project is being structured to prioritize balance sheet integrity with a specific objective of little to no equity dilution. The $26.3 million in Q2 capital expenditures primarily reflects reliability upgrades at Merom intended to reduce future unplanned downtime. Hallador was selected for $27.2 million in DOE grants for ELG compliance at Merom, with some work expected to be completed in 2026 and funding matches anticipated in the fourth quarter. Unplanned downtime remains a sensitivity factor, as seen in Q2 when outages forced the company to purchase power at elevated market prices to meet delivery obligations. The company drew $45 million from a delayed draw term loan in May to manage working capital during the heavy maintenance period and build inventory for summer demand. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Costs decreased from initial $900 million estimates to sub-$800 million as equipment restoration and construction scopes firmed up. The project benefits from being a brownfield site with existing water and infrastructure, providing a cost and speed-to-market advantage over greenfield competitors. Management is evaluating equipment financing, structured debt, and project-level alternatives to avoid diluting current shareholders. The robust contract book at Merom is viewed as a significant asset that supports the company's overall creditworthiness for new project leverage. Management noted the 'Rolodex' of potential buyers for gas-fired power is three to four times larger than for coal-fired output. Despite the smaller buyer pool for coal, the company expects to have Merom's capacity essentially sold out by the end of the year due to intense regional demand. The company expects to receive system upgrade cost results from MISO in mid-August and views the process as a 'check-the-box' exercise given their internal studies. Physical possession of Siemens turbine equipment is cited as a major differentiator from other projects stuck in long interconnection queues.

Interested in Hallador Energy Company? Here are five stocks we like better. Q2 profitability declined sharply: Hallador reported a $15.2 million net loss and negative $2.9 million adjusted EBITDA, pressured by a 60-day Merom maintenance outage, reliability work and costly power purchases. Management expects generation and results to improve in the third quarter. Turtle Creek project costs fell: The proposed 460-megawatt natural-gas plant’s estimated cost dropped to below $800 million, with commercial operations targeted for the second half of 2028. Hallador is evaluating financing options designed to limit equity dilution and expects key interconnection results in August. Contracted revenue and liquidity remain significant: Forward energy and capacity sales increased to about $1.6 billion, or roughly $1.8 billion including third-party coal sales. Quarter-end liquidity was $84.2 million after Hallador drew $45 million under its term loan and repaid $8 million of revolver borrowings. 3 Small-Cap Stocks With Big Growth Potential Hallador Energy (NASDAQ:HNRG) reported a second-quarter net loss as a planned maintenance outage and limited unplanned downtime at its Merom power plant affected profitability, while management highlighted progress on its proposed Turtle Creek natural gas generation project and its expanding long-term contracted sales position. Net loss for the second quarter of 2026 was $15.2 million, compared with net income of $8.2 million in the prior-year period. Total operating revenue declined to $101.5 million from $102.8 million a year earlier, while adjusted EBITDA was negative $2.9 million, compared with positive $3.4 million in the prior-year quarter. → MarketBeat Week in Review – 08/03 - 08/07 Chairman and CEO Brent Bilsland said the second quarter was affected by a roughly 60-day scheduled spring maintenance outage for one of Merom’s two generating units. The company completed major reliability upgrades on Unit 1 intended to address unplanned downtime experienced in recent quarters. Unit 2 performed well during the quarter, Bilsland said, although limited unplanned downtime occurred during periods of elevated market prices. That required Hallador to purchase power at higher prices to meet delivery obligations, magnifying the financial impact. → Quantum Earnings Week: Winners and Losers Are Finally Emerging “Together, these factors weighed on our second quarter results,” Bilsland said, adding that management does not believe the quarter reflected Merom’s underlying earnings power. The company expects generation volumes to improve sequentially in the third quarter as the planned outage has concluded and reliability investments take effect. CFO Todd Telesz said second-quarter electric sales were $59.5 million, compared with $60 million a year earlier. Accredited capacity revenue increased 17% year over year to $18.6 million, while total energy sales volume rose 17%. However, the average price per megawatt-hour for delivered energy fell to $41.69 from $52.66 in the previous year’s quarter. → Take-Two’s Q1 Results Leave GTA 6 Bulls Stuck in the Fog of War Third-party coal sales rose to $40.6 million from $38.1 million. A 9% increase in the average third-party coal price per ton more than offset a 2% decline in third-party tons sold, Telesz said. Sunrise also sold 59,000 additional tons to Merom as the plant prepared for summer demand. Cash flow used in operations was $23.9 million, compared with $11.4 million of operating cash flow generated in the year-earlier quarter. Telesz attributed the change primarily to the outage-related decline in profitability, higher purchased-power costs, and working-capital investment in inventory, parts and supplies. Capital expenditures reached $26.3 million in the quarter, up from $13.1 million a year ago, largely reflecting Merom reliability upgrades and Turtle Creek development spending. The company expects maintenance capital spending to moderate through the remainder of 2026, with full-year capital expenditures expected to remain consistent with 2025 levels excluding Turtle Creek investments. Management provided an update on Turtle Creek Gas, a proposed 460-megawatt simple-cycle natural-gas-fired generating plant to be developed at the Merom site. Bilsland said the project’s expected total cost has declined to less than $800 million, or roughly $1,700 per kilowatt, from a prior estimate of less than $900 million. The lower estimate reflects more-defined equipment restoration and construction scopes, according to Bilsland. He also cited the project’s use of existing Merom-site infrastructure, including the site, water and related infrastructure, rather than requiring a greenfield development. Hallador now targets commercial operation in the second half of 2028. The company expects turbine equipment to ship in September after management, its owner’s engineer and Siemens personnel inspected the equipment and disassembly process. Bilsland said the equipment was in good condition and that disassembly and packing were underway. Turtle Creek entered MISO’s Expedited Resource Addition Study process on June 2. Hallador expects results, including required system-upgrade costs, in mid-August. Bilsland said indications from the study had been constructive, and the company is targeting a final investment decision and generator interconnection agreement in September following its review. Management said it is evaluating equipment financing, structured debt, project-level financing and other alternatives, with a goal of limiting or avoiding equity dilution. Telesz said the company does not currently see a role for Department of Energy financing for Turtle Creek, although its DOE-related work has focused on Merom. Hallador’s forward energy and capacity sales position stood at approximately $1.6 billion at June 30, compared with $571.2 million at March 31 and $619.7 million a year earlier. Including $236.5 million of third-party forward coal sales, total contracted revenue was approximately $1.8 billion on a consolidated basis. Including intercompany sales to Merom, the company’s forward sales book totaled approximately $2.4 billion on a segment basis. The figures include a 12-year capacity agreement signed in May. Bilsland said the company has capacity commitments extending through 2040 and is working toward additional forward sales before year-end. Management said it sees continued demand for accredited capacity, particularly amid rising electricity needs associated with data-center development. Bilsland noted that a large data-center project has broken ground adjacent to Hallador property and another project is in early development on the opposite side of the plant. The company is keeping much of its energy position open beyond the next few years, expecting energy pricing to strengthen as new electricity demand materializes. Bilsland said Hallador could make some energy sales this year if pricing is appropriate, potentially through a layered approach rather than fully contracting its position at once. Hallador drew $45 million under its delayed-draw term loan on May 15 and used part of the proceeds to repay $8 million outstanding under its revolving credit facility. Total bank debt was $45 million at June 30, compared with no bank debt at March 31. Total liquidity was $84.2 million at quarter-end, down from $97.5 million at March 31 but up from $42 million a year earlier. Liquidity consisted of $29 million in unrestricted cash and cash equivalents and $55.2 million of remaining borrowing capacity under the revolving credit facility. Hallador Energy Company is a coal producer and mine operator trading on NASDAQ under the symbol HNRG. The company's primary business activities center on the production and sale of bituminous thermal coal. Hallador's operations encompass two surface mines: the Shoal Creek Mine located in southwestern Indiana and the Bull Mountain Mine situated in eastern Montana. Both sites are designed to extract high-quality coal reserves for the power generation market. Hallador Energy markets its coal primarily to electric utilities and industrial customers across the United States. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Hallador Energy Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

- Turtle Creek COD Expedited to the Second Half of 2028 - - Contracted Forward Sales Reach $2.4 Billion at the Segment Level - - Management to Host Conference Call Today at 5:00 p.m. ET - TERRE HAUTE, Ind., Aug. 10, 2026 (GLOBE NEWSWIRE) --  Hallador Energy Company (Nasdaq: HNRG) (“Hallador” or the “Company”) today reported its financial and operating results for the second quarter ended June 30, 2026. The Company is also providing an update on the continued advancement of its Merom natural gas generation project, now formally named Turtle Creek Gas (“Turtle Creek”), including progress on equipment procurement, financing and interconnection. “Since our strategic update in June, we have made significant progress across key elements of the Turtle Creek project,” said Brent Bilsland, Chairman and Chief Executive Officer. “We recently completed a site visit to get a firsthand update of the disassembly of the turbine equipment, which is underway with a substantial Siemens workforce on site, and we continue to be pleased with both the progress of the disassembly efforts and the condition of the turbine equipment. Shipment of the equipment remains on schedule for September, and the generator interconnection process is also advancing. As the equipment, restoration and construction scopes become more defined, the project economics have become even more compelling, and we now expect total project cost to be below $800 million, or approximately $1,700/kW — which we believe is a significant cost advantage relative to competing new-build capacity — while moving forward our targeted commercial operation timeframe to the second half of 2028, a timeline we believe is materially ahead of comparable projects. This progress moves us closer to a final investment decision on a 460 MW peaking project that would meaningfully expand and diversify our dispatchable generation platform. At the same time, the market backdrop continues to validate the strategic rationale for that investment. We are seeing robust demand for accredited capacity and energy from a growing and increasingly diverse set of counterparties, and are working towards additional forward sales before the end of the year. With $2.4 billion of revenue already contracted through 2040, and potentially more sales on the way, we believe Hallador offers investors a degree of revenue visibility that we believe is among the strongest in the sector.” "Operationally, the second quarter is traditionally our lightest period of the year, as we take one of Merom's two units offline each spring for an approximately 60-day scheduled maintenance outage. During this year's outage at Unit 1, we completed major reliability upgrades designed to address the unplanned downtime the unit experienced in recent quarters. Unit 2 performed well over the course of the quarter; however, the limited unplanned downtime it did experience coincided with periods of elevated market prices, which magnified the financial impact by requiring us to purchase power at high prices to meet our delivery obligations. Together, these factors weighed on our second quarter results but do not, in our view, reflect the earning power of the plant. With the scheduled outage behind us and the reliability investments in place, we believe Merom is positioned to run more reliably going forward, and we expect generation volumes to improve sequentially in the third quarter." Turtle Creek Update The project’s interconnection application entered MISO’s Expedited Resource Addition Study (“ERAS”) process on June 2, 2026. Hallador expects to receive the results of that process, including the required system upgrade costs, in mid-August and, following its review, is targeting a final investment decision of the project and execution of a generator interconnection agreement in September. Indications to date from the study process have been encouraging. In parallel, the Company is finalizing the construction scope and advancing financing discussions as it evaluates the appropriate capital structure for the project, with the objective of financing the project while minimizing equity dilution. Together, the interconnection, construction, and financing workstreams are among the principal remaining steps toward a final investment decision. The Company is now targeting commercial operation in the second half of 2028. Second Quarter 2026 Highlights Hallador continued to invest in Merom while positioning its balance sheet to support its strategic priorities. Hallador continues to execute its contracting strategy, increasing long-term revenue visibility and monetizing its dispatchable generation platform. Financial Summary ($ in Millions and Unaudited) * Non-GAAP financial measure, defined as EBITDA plus effects of certain subsidiary and equity method investment activity, less other amortization, plus certain operating activities including stock-based compensation, asset retirement obligations accretion, less gain on disposal or abandonment of assets, plus loss on extinguishment of debt and other reclassifications such as special non-recurring project expenses. Adjusted EBITDA should not be considered an alternative to net income, income from operations, cash flows from operating activities, or any other measure of financial performance presented in accordance with GAAP. Our method of computing Adjusted EBITDA may not be the same method used to compute similar measures reported by other companies. Management believes the non-GAAP financial measure, Adjusted EBITDA, is an important measure in analyzing our operations. Forward Sales Position - (unaudited)* * Actual revenue related to forward sales positions may differ materially for various reasons, including unit contingencies, price adjustment features for coal quality and cost escalations, volume optionality provisions, including rollover of unfulfilled coal commitments into future periods, and potential force majeure events. Certain contracted forward sales positions included above are subject to approval by the Indiana Utility Regulatory Commission, which the Company expects on or before November 15, 2026. Forward sales figures in the 2026 column are for the period from July 1, 2026 through December 31, 2026. The table above reflects contracted balances as of June 30, 2026. Forward-Looking Statements This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Statements that are not strictly historical statements constitute forward-looking statements and may often, but not always, be identified by the use of such words such as "expects," "believes," "intends," "anticipates," "plans," "estimates," "guidance," "target," "potential," "possible," or "probable" or statements that certain actions, events or results "may," "will," "should," or "could" be taken, occur or be achieved. Forward-looking statements include, without limitation, those relating to our ability to participate in the ERAS program (which ultimately requires the approval of MISO of our application and is a capital intensive project subject to construction, operational, financial, regulatory and legal risks that could impact the project’s viability and/or timeline) and achieve the expected benefits thereof, the anticipated timing of turbine equipment shipment, project cost expectations and expected cost and timing advantages relative to other projects, our expectations regarding additional forward sales, our ability to finance the Turtle Creek project on anticipated terms, including with little to no equity dilution, our ability and the ability of our counterparties to obtain regulatory approvals, including approval by the Indiana Utility Regulatory Commission of contracted capacity agreements, our ability to secure agreements in support of the development and construction of planned projects, including the expansion of our Merom Generating Station, and our expectations with respect to potential accelerating demand for accredited capacity. Forward-looking statements are based on current expectations and assumptions and analyses made by Hallador and its management in light of experience and perception of historical trends, current conditions and expected future developments, as well as other factors appropriate under the circumstances that involve various risks and uncertainties that could cause actual results to differ materially from those reflected in the statements. These risks include, but are not limited to, those set forth in Hallador’s annual report on Form 10-K for the year ended December 31, 2025, and other Securities and Exchange Commission filings. You should not place undue reliance on these forward-looking statements. The forward-looking statements in this release speak only as of the date of this release. Hallador undertakes no obligation to revise or update publicly any forward-looking statements except as required by law. Conference Call and Webcast Hallador management will host a conference call today, August 10, 2026, at 5:00 p.m. Eastern time to discuss its financial and operational results, followed by a question-and-answer period. Date: Monday, August 10, 2026Time: 5:00 p.m. Eastern timeDial-in registration link: hereLive webcast registration link: here The conference call will also be broadcast live and available for replay in the investor relations section of the Company’s website at www.halladorenergy.com. About Hallador Energy Company Hallador Energy Company (Nasdaq: HNRG) is a vertically-integrated Independent Power Producer (IPP) based in Terre Haute, Indiana. The Company has two core businesses: Hallador Power Company, LLC, which produces electricity and provides accredited capacity at its one-Gigawatt (GW) Merom Generating Station, and Sunrise Coal, LLC, which produces and supplies fuel to the Merom Generating Station and other companies. To learn more about Hallador, visit the Company’s website at www.halladorenergy.com. Company Contact Todd E. Telesz Chief Financial [email protected] Investor Relations Contact Sean Mansouri, CFA Elevate IR(720) [email protected] See accompanying notes to the condensed consolidated financial statements. See accompanying notes to the condensed consolidated financial statements. See accompanying notes to the condensed consolidated financial statements.

Unsurprisingly, Hallador Energy Company's (NASDAQ:HNRG) stock price was strong on the back of its healthy earnings report. We did some analysis and think that investors are missing some details hidden beneath the profit numbers. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. To understand the value of a company's earnings growth, it is imperative to consider any dilution of shareholders' interests. As it happens, Hallador Energy issued 9.7% more new shares over the last year. Therefore, each share now receives a smaller portion of profit. Per share metrics like EPS help us understand how much actual shareholders are benefitting from the company's profits, while the net income level gives us a better view of the company's absolute size. You can see a chart of Hallador Energy's EPS by clicking here. Unfortunately, we don't have any visibility into its profits three years back, because we lack the data. Zooming in to the last year, we still can't talk about growth rates coherently, since it made a loss last year. What we do know is that while it's great to see a profit over the last twelve months, that profit would have been better, on a per share basis, if the company hadn't needed to issue shares. And so, you can see quite clearly that dilution is influencing shareholder earnings. If Hallador Energy's EPS can grow over time then that drastically improves the chances of the share price moving in the same direction. However, if its profit increases while its earnings per share stay flat (or even fall) then shareholders might not see much benefit. For the ordinary retail shareholder, EPS is a great measure to check your hypothetical "share" of the company's profit. That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. Over the last year Hallador Energy issued new shares and so, there's a noteworthy divergence between EPS and net income growth. Because of this, we think that it may be that Hallador Energy's statutory profits are better than its underlying earnings power. On the bright side, the company showed enough improvement to book a profit this year, after losing money last year. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. While it's really important to consider how well a company's statutory earnings represent its true earnings power, it's also worth taking a look at what analysts are forecasting for the future. At Simply Wall St, we have analyst estimates which you can view by clicking here. Today we've zoomed in on a single data point to better understand the nature of Hallador Energy's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Image source: The Motley Fool. Wednesday, May 6, 2026 at 5 p.m. ET Chief Executive Officer — Brent Bilsland Chief Financial Officer — Todd Telesz Brent Bilsland: Thank you, Sean, and thank you, everyone, for joining us this afternoon. Before diving into our first quarter results, I want to begin with what we believe is an important milestone in a multiyear transformation of Hallador, one that has been in the works for a long time now and reflects the steady, deliberate execution of a strategy our long-term shareholders have been patient with. Subsequent to quarter end, we executed a 12-year capacity agreement with a subsidiary of utility, that is expected to generate more than $1 billion of contracted revenue from 2028 through 2040 at pricing levels more than 2x our historical contracted capacity pricing. This agreement is subject to approval by the Indiana Utility Regulatory Commission, which we anticipate will occur in the second half of 2026. The agreement represents one of the most significant commercial achievements in our company's history. It may be helpful to put today's announcement in the context of the path that brought us here. Six years ago, Hallador was originally an underground coal mining company. In 2021, we began acquiring a 1 gigawatt interconnection. In '22, we acquired the 1 gigawatt power plant that utilizes the interconnection. In 2024, we began marketing long-term output of the plant. And in '25, those discussions broadened from data center developers to utilities. In March of this year, we executed a 3-year capacity agreement at approximately twice our historical pricing. And today, we are announcing a 12-year $1 billion-plus capacity agreement that follows directly behind it. Each of those steps was deliberate, each built on the one before. And we believe the same pattern of disciplined sequential execution will continue to define how we create shareholder value from here. Combined with the 3-year capacity agreement we announced in March that contracted our accredited capacity for planning years '26, '27 and '28, the agreement we are announcing today contracts the back portion of planning year 2028 and each year thereafter through mid-2040. Together, these 2 capacity-only sales total approximately $1.1 billion and place Hallador in a substantially sold-forward position on accredited capacity for approximately the next 14 consecutive years. We believe this represents a meaningful structural improvement in the durability of our earnings power and our balance sheet. And importantly, it provides the capital raising foundation from which to pursue the next set of opportunities in front of us. The agreement initially covers a smaller volume of accredited capacity in planning year 2028, increasing to approximately 2/3 of our accredited capacity beginning in planning year 2029 and continuing through 2040. This structure provides the kind of long-duration revenue visibility that is increasingly rare for dispatchable generation in MISO and validates the durable economic value of our dispatchable generation platform. It is worth noting that this agreement is only for our capacity. We are not committing energy under this contract, which enables us to secure durable contracted revenue, while preserving full exposure to future upside in energy markets as demand for power continues to rise across MISO. Preserving that energy side optionality is intentional. As we will discuss in a moment, we believe the energy market is on a different time line than the capacity market, and we are positioning the portfolio to participate in both as they develop. To us, that is the bigger story. While our first quarter results were generally in line with our expectations due to previously mentioned availability constraints at Merom, the underlying value of Hallador is increasingly tied to the growing scarcity of reliable, dispatchable generation. The agreement we announced today is one clear data point of that dynamic. And we believe it is one of several you should expect to see emerge from the role our assets can play in meeting this demand. When we look at the market, we view capacity as the critical first step. For large load customers, particularly data centers, access to accredited capacity is often the gating factor. Without it, projects cannot move forward. As a result, we are seeing capacity markets tighten and reprice ahead of the physical demand that these developments will ultimately bring. Energy demand follows on a different time line. These projects require several years to build. And as they come online and begin to draw power from the grid 24/7, 365, that is when we expect to see more meaningful response in energy pricing. Our portfolio is constructed to participate in both phases. The capacity contracts we have announced this year address the first. The merchant energy position we have intentionally retained is positioned to address the second when it arrives. This dynamic is central to how we are positioning the business. Our strategy is to monetize capacity where we can secure attractive, long-term value today, while maintaining flexibility to participate in future upside in energy markets. We are being deliberate in how we contract our portfolio, locking in value where scarcity is already evident and preserving exposure where we believe demand has yet to be fully reflected. Capacity remains a critical requirement for large load development, and we continue to see strong interest from counterparties seeking reliable supply over longer periods. The agreement we signed is an important anchor in our forward sales book, but it is by design, not the last commercial step we expect to take. We continue to evaluate additional ways to monetize our remaining capacity and optimize our forward energy position. We will maintain a disciplined approach, and we will be deliberate about the timing and structure of any future commercial agreements. That said, the level of inbound interest we are seeing today is meaningfully higher than it was even 6 months ago across multiple counterparty types and contract structures. The contracted high conversion cash flows from these agreements also support a broader transformation we are pushing, building in Hallador over time into a multi-fuel independent power producer with a more diversified generating fleet. We have spoken previously about the proposed 515-megawatt combustion turbine project at our Merom Generating Station site under the MISO ERAS program. Additionally, we are continuing to evaluate dual fuel initiatives for our existing generation. We will work towards making progress on these work streams in the same disciplined sequential way as the contracting strategy has unfolded into the past year. Now turning to our first quarter 2026 results. As we discussed on our last call, we experienced availability constraints at Merom in Q4, that continued into the first quarter and reduced generation from the plant. First quarter results reflected those constraints as lower generation at Merom pressured electric sales and intercompany coal sales, which ultimately impacted our profitability for the quarter. We also incurred outage-related replacement power costs during Q1, which created an additional headwind. While these results were generally in line with the expectations we provided in March, they are below the level of performance that we expect from our Merom power plant over time. Maintaining high levels of reliability remains a top priority for our team, particularly as MISO increasingly depends on dispatchable resources during periods of peak demand. As such, the generating unit in question is currently in a planned maintenance outage, and we are using this period to make reliability-related investments that we believe should improve performance as we move through the balance of the year. As we have discussed previously, Hallador operates as a vertically integrated platform, and Merom sits at the center of that system. When the plant is running efficiently, it drives performance across the business, supporting electric sales, creating consistent internal demand for coal, improving mine productivity and enhancing overall operating efficiency. When performance at Merom falls below planned levels, those impacts extend throughout the platform. Coal inventories increase, production at Sunrise becomes less efficient, and it becomes more difficult to optimize our cost structure. That is why our focus on improving reliability at Merom is so important. The outage currently underway is a key part of that effort. We are making targeted capital investments in the unit, and we believe that, that is the right decision given both the value of Merom today and the increasing importance of reliable, dispatchable generation going forward. Historically, similar investments have led to meaningful improvement in operating performance, and we expect the work being completed now to position the plant for higher availability as we move into the summer and upcoming peak demand periods. We are also in a much stronger financial position to support these investments. At quarter end, we had no outstanding bank debt and meaningfully improved liquidity compared to year-end. That improved capital position gives us greater financial flexibility to invest in the assets, support our ongoing operation and pursue the strategic opportunities we are seeing across the power market. Looking ahead, our second quarter results will reflect the planned outage currently underway, which we expect will temporarily reduce generation as we complete the necessary maintenance. As we move into the second half of the year, the underlying setup begins to shift with the plant returning from outage and availability improving. We expect to be better positioned heading into the peak summer demand period. As I mentioned earlier, more consistent performance at Merom supports not only electric sales, but also internal coal demand, mine productivity and overall operating efficiency across the platform. This is important because the opportunity in front of us ultimately depends on execution. While the agreement we discussed earlier reinforces the value of accredited capacity and dispatchable generation, realizing that value over time requires consistent performance at Merom. We're focused on improving reliability, driving efficiency across our coal operations and translating the market opportunity we see into durable cash flow. Although the first quarter was operationally challenging, it does not change our view of the long-term earnings potential of the platform. The fundamental signals across our markets remain constructive, and we believe Hallador is well positioned to compound shareholder value over a multiyear horizon as the strategy we have been describing continues to unfold milestone by milestone. With that, I'll turn the call over to Todd to take you through our financial results. Todd Telesz: Thank you, Brent, and good afternoon, everyone. Jumping into our first quarter results. Electric sales for the first quarter were $65.1 million compared to $85.9 million in the prior year period, while third-party coal sales increased to $35.1 million compared to $30.2 million in the prior year period. Electric sales in the first quarter reflected the availability constraints at Merom, that Brent discussed earlier, which reduced generation during the period and resulted in lower electric sales compared to the prior year. These impacts were partially offset by stronger credit capacity revenue during the quarter. The increase in third-party coal sales during the first quarter was driven primarily by improved pricing on shipments to customers, reflecting continued execution across our external customer book and Sunrise Coal's ability to supply both internal fuel requirements at Merom and external market demand. On a consolidated basis, total operating revenue was $101.8 million for the first quarter compared to $117.7 million in the prior year period. Net loss for the first quarter was $9.3 million compared to net income of $10 million in the prior year period. Operating cash flow for the first quarter was $20.5 million compared to $38.4 million in the prior year period, with the decrease primarily reflecting lower generation of Merom, higher purchase power costs during the quarter and an increase in coal inventory of approximately $4.6 million. Adjusted EBITDA, a non-GAAP measure, which is reconciled in our earnings press release issued earlier today, was $5.5 million for the first quarter compared to $19.3 million in the prior year period. We invested $7.7 million in capital expenditures during the first quarter of 2026 compared to $11.7 million in the year ago period. As Brent mentioned earlier, we are currently in a planned major maintenance outage at Merom and expect capital spending to remain focused on planned maintenance, reliability and operational improvements across the platform. For the full year, we continue to expect capital expenditures to increase modestly compared to 2025 levels, excluding potential ERAS-related development investments. As of March 31, 2026, our forward energy capacity sales position was $571.2 million compared to $543.5 million at December 31, 2025, and $630.4 million at March 31, 2025. When combined with our third-party forward coal sales of $288.4 million as well as intercompany sales to Merom, our total forward sales book as of March 31, 2026, was approximately $1.2 billion. Importantly, these figures do not include the 12-year capacity agreement signed last week. Hallador had no outstanding bank debt at March 31, 2026, compared to $29.7 million at December 31, 2025, and $21 million at March 31, 2025. Total liquidity at March 31, 2026, was $97.5 million compared to $38.8 million at December 31, 2025, and $69 million at March 31, 2025. The increase reflects both the capital raised during the quarter, capacity payments received and the addition of borrowing capacity under our new credit facility. As Brent mentioned earlier, we took several steps during the quarter to strengthen our capital structure. In early March, we entered into a new credit agreement with Texas Capital Bank, Old National Bank and other long-term relationship lenders, replacing our prior facility. The new agreement includes a $75 million revolving credit facility and a $45 million delayed draw term loan, with maturity in March 2029 and includes an accordion feature that provides additional flexibility. We believe this new facility, combined with our improved liquidity position and the absence of outstanding bank debt at quarter end, provides a more flexible capital structure than we had entering the year. It allows us to fund the planned outage and reliability investments at Merom, manage working capital across both segments and support the commercial strategy Brent outlined, while maintaining a disciplined approach to leverage and preserving the financial flexibility to support the disciplined multiyear transformation Brent described. With that, operator, we can now open the line for questions. Operator: [Operator Instructions] Your first question comes from the line of Julien Dumoulin-Smith with Jefferies. Unknown Analyst: This is [indiscernible] on for Julien. Congrats on the big contract. It's been a long time coming, so nicely done there. Just wanted to ask you, now looking forward towards the gas extension, can you talk about what would get you more confident here in pursuing that moving forward with the gas extension and what your strategy there is both with regards to securing the turbine and towards the EPC? I think you've talked about partnerships on the turbine side, but we're also hearing constraints on the EPC side. So curious if you can add more color on how you move forward with the gas reset? Brent Bilsland: Yes. Thank you. Look, I mean, certainly, selling a big block of capacity puts us in better financial footing. It increases our confidence. As far as equipment, yes, equipment is hard to get. EPCs are hard to get, but we're in conversations with those parties, and we're moving those discussions forward. When we secure equipment in an EPC, we will announce such a transaction if we decide to go forward with that. But yes, it's -- what we're seeing in the market is the value of PPAs go up, but equipment prices also go up. And so we're trying to align those economics and see if we can get a development build. Operator: Your next question comes from the line of Nick Giles with B. Riley Securities. Nick Giles: Congrats on the capacity deal. That's really great to see. Brent, in your prepared remarks, you noted that capacity is the bottleneck between data center deals being finalized. And I know you've signed this deal with the utility, but should we assume that this deal is ultimately linked to a hyperscaler end user? And how should we think about how end users have shifted on the energy front? Brent Bilsland: Well, we're a little limited on what we can say just based on some of the confidentiality requirements in the agreement. That said, this is a material agreement, and so it will be filed as an exhibit in our -- with our 10-Q. So there'll be a little more information there. But I would say, overall, data centers are the big demand that we're seeing everywhere. It's not the only demand. I mean we're seeing potential steel plant expansions in Indiana. We're seeing announcements of new aluminum smelters, I think, in Oklahoma. I mean you're seeing manufacturing show up as well, particularly as you look at energy disruption around the world, the United States truly is energy independent. We truly do have some of the cheapest energy and most secure energy in the world. And so if you're going to build anything, it's going to be built upon that foundation. Now AI, I think it's revolutionary technology. I think people are just starting to get the first taste of some of these new products. I mean, Anthropic's new offering is amazing. And once your teams start to experience that, you see the productivity gains. And that's just -- I don't know that any of this is new information. It's just we're seeing it. And why are we seeing in Indiana? Specifically, we've talked about Indiana is welcoming data centers to the state, whereas there's something like 30 different states across the country who have some form of pause or moratorium on new data centers. And so where can you go that has population or is near population, has a great business climate, has favorable tax policy to attract data centers, Indiana is checking that box. And that's why we're just seeing such an intensified interest level in the state. And so that's the wind behind our sails. We executed on it in March. We've executed again here in May. And we hope to announce -- hopefully, we can execute on further deals later this year. Nick Giles: Appreciate that perspective, Brent. Maybe just back on the energy side. In the past, you've talked about kind of where you saw pricing at any given time, and you've made references to the forward curve. And -- so I was hoping just to get an updated view on that? It's been a while. There were some other deals across the space, some on the nuclear side, that we could use as precedent, but I don't think we've seen any of that nature here more recently. So just was hoping for an updated view on kind of where you see energy pricing today? Brent Bilsland: Yes. So there's a lot of different curves out there, a lot of different companies put them out. We generally think capacity is a lead indicator for energy, right? I mean, first, if you're going to build a data center or even a factory for that matter, you really need to secure your credit capacity first. And then once you've secured that, now you can start building your factory or data center. And then once that -- let's just use data center because that is the biggest portion of the demand we're seeing. Once you see that being built, once it gets turned on, now we're using energy, right? And so there's typically a couple of year lag between what we're seeing in the capacity markets to kind of the response we're seeing in the energy markets. And I think the curves are just starting to reflect that. We've seen a little price movement up, which is encouraging. We'll see if that holds. And -- but by and large, I mean, everything we're seeing is encouraging. Nick Giles: And maybe just one more, if I could. Given that some of the juice on the energy side, if you will, could come with a lag, would you be willing to kind of wait it out given you have the stability of the capacity revenue secured now? Or would you rather send something sooner? Brent Bilsland: Well, I think -- look, first of all, we're well hedged for 2026, right? And so that's -- this year's book is in great shape. These capacity deals sets a great foundation for the company through 2040. That's 14 years of forward visibility, a large portion of the book. And again, if you kind of look back to our March release, we talked about if we could continue to sell capacity at the prices we sold out in March, and we could sell everything at that price. That would be $130 million of revenue before we turn the plan on, right? We have a fixed cost of roughly $60 million. This deal was priced higher than that. So we have -- we think we've locked in -- now we've only sold 2/3 of the forward capacity that we have to sell, but we've locked in a profit for 14 years before we even turn the plan. I think that's a great position for us to be in. It definitely -- we feel no pressure. And I think as far as selling energy goes, I think we just have to take the deals as they come. Different customers have different needs, different opportunities. And so if we see opportunities to lock in energy tomorrow at prices that we deem appropriate for the future, we will do so. But where we've seen the biggest response, again, more than doubling the price of what we were doing 2 years ago is in the capacity markets. And so that's where we've been most aggressive. Operator: Your next question comes from the line of Jeff Grampp with Northland Capital Markets. Jeffrey Grampp: Congrats on the announcement. I wanted to talk on -- you're a little more vocal it seems in this release regarding the dual fuel ambitions at Merom. Is there any more detail you can share regarding potential timing, next steps? And as I recall, it was a little bit more of a potential bargaining chip, I suppose, for prospective customers. With that seemingly not really a constraint or consideration, can you talk about what the, I guess, benefits for Hallador would be should you pursue a project like that? Brent Bilsland: Yes, great question. Look, if we bring a gas line in for the gas plant, right, that has a dual use. It can be used for the gas plant, but it also could be used if we decide to dual fuel the coal-fired units. And again, it wouldn't be a replacement of coal. It would be a -- we would have the ability to burn both, right? We could burn coal, we could burn gas. And there's a lot of reasons to do that, right? Some of it is there's times the gas is cheaper than coal. It could be -- it helps our investors, bankers, insurance companies kind of protect the company. And well, if we have a different administration with a different viewpoint, then all of a sudden, Hallador is a multi-fuel company that isn't just a coal company. We think as you progress through this, right, we're locking in the economics of the existing generation. We're trying to step towards building of a gas unit to both expand our capacity, but also add a separate fuel source. If we could then upon that dual fuel the existing plant -- now Hallador has really transitioned from a coal company to a multi-fuel company. And I think there could potentially be a multiple uplift in being able to pull all that off. Now that doesn't mean -- I don't want to sit here today and say we're going to do that. I'm trying to say that because of the contracts we've signed, we've derisked our balance sheet. We've increased the ability to access capital, and these are the type of projects that we are reviewing and trying to work towards. So I just want to kind of give the investor a little bit of insight into how we're thinking. We'll have to see if those investments make economic sense and it's ultimately what we decide is the best use of our capital. Jeffrey Grampp: Understood. I appreciate that thorough answer. For my follow-up, I know in the past, you talked about M&A ambitions and some opportunities there. It's obviously a big derisking event for the Hallador story at large. Does this help further or serve M&A ambitions? Are these independent? And can you just give us a broad update on the opportunity set in that world? Brent Bilsland: Yes. Look, I think there's a lot of opportunity. If you look at -- there's a lot of people that own assets that are funds. And what is unique about Hallador is we have a public vehicle. We have a sales team that can help lock in long-term contracts to add value to those existing assets. And we have a team that is working on developing the interconnect and expanding upon that to meet market demand. So I think Hallador is unique in that -- and we can touch coal assets. So those 4 attributes, I think, really set us apart and make us a more interesting vehicle for potential M&A possibilities down the road. We'll see if those come to pass. We're only going to do deals that we think are smart, and we're going to do the deals that we think bring the most value to the shareholder at the time that they're in front of us. So hopefully, we can have some success on that. Operator: Your next question comes from the line of Matthew Key with Texas Capital. Matthew Key: Congrats on the new agreement. I was wondering if you could help quantify the pricing a little more on the new capacity agreement? I think you mentioned that it was done above the previous 3-year deal that was announced. Could you provide a rough ballpark on that improvement on pricing? Brent Bilsland: Yes, Matt, I apologize, we're somewhat limited on what we can say just due to the confidentiality that is in the agreements. But I think that if you look at the tenor and the volume that we've talked about, and we've given roughly the total dollar amount, I think everybody can kind of get in the ZIP Code. There were a lot of reports out on what our last deal was at. And some of that will show up now. So what we announced in March, some of that does show up in our forward sales book in this 10-Q. So if you compare the previous 10-Q to this 10-Q, I think you can get a feel for what that pricing is. On this particular $1 billion deal, once it's approved by the IURC, that -- then that deal is firmly bound, right? That's the last approval that we're waiting for. I mean we're bound, the counterparty is bound. We just have to have IURC approval. Once that happens in our -- whatever Q follows that time period, then we'll start to report what the volumes and the pricing is on the deal we just announced. Matthew Key: Got it. No, that's helpful color. And for my follow-up, I wanted to talk a little bit about the natural gas expansion. I believe in the previous earnings call, you mentioned that you would expect MISO to complete kind of the ERAS application in 3Q '26. Have there been any changes to that time line? And have they picked up the application as we stand today? Brent Bilsland: They've not picked up the application yet, but we still anticipate them doing that in June, and then that will require us to make the decision sometime in September. Matthew Key: Got it. Yes. So about 90 days, right, after they pick it up to kind of work through the details of that? Brent Bilsland: Yes, that's how the ERAS program is supposed to work. Once they pick it up [indiscernible] the 90-day on. Matthew Key: Got it. Brent Bilsland: We do not control when they pick it up. Operator: I'll now turn the call back over to Brent Bilsland for closing remarks. Brent Bilsland: Yes. I want to thank everybody for their patience in us getting this capacity deal done. We're very excited about the future of the company, and we think we've got just great things in store. So thank you for your time today. Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect. Before you buy stock in Hallador Energy, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Hallador Energy wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Hallador (HNRG) Q1 2026 Earnings Call Transcript was originally published by The Motley Fool

- Q1 Total Revenue of $101.8 Million, with Operating Cash Flow of $20.5 Million - - Q1 Net Loss of $9.3 Million, with Adj. EBITDA of $5.5 Million - - On May 1, Hallador Signed a Capacity Agreement, for years 2028 – 2040, at More Than 2x Historical Capacity Pricing, Expected to Generate Over $1 Billion of Contracted Revenue - TERRE HAUTE, Ind., May 06, 2026 (GLOBE NEWSWIRE) -- Hallador Energy Company (Nasdaq: HNRG) (“Hallador” or the “Company”) today reported its financial and operating results for the first quarter ended March 31, 2026. The Company is also announcing a newly signed 12-year capacity agreement with a subsidiary of a utility, which is further detailed below. “In the last few months, we have made significant progress advancing our long-term contracting strategy, together with the three-year capacity agreement we announced in March for planning years 2026, 2027 and 2028, culminating now with the execution of a 12-year capacity agreement selling approximately 2/3rds of our accredited capacity starting in late 2028 through mid-2040. Together, these two capacity-only sales total approximately $1.1B, nearly doubling our forward sales book and making the Company substantially sold-forward on accredited capacity across the next fourteen consecutive years. We continue to see strong pricing signals for our remaining unsold capacity and continue to pursue opportunities in the market to add to our already substantial forward sales positions,” said Brent Bilsland, President and Chief Executive Officer. “These agreements provide durable revenue visibility and balance sheet support and are expected to convert to cash flow at a very high rate, enabling the company to focus on disciplined capital allocation across potential growth initiatives such as our proposed 515MW gas plant project and our dual-fuel ambitions for our existing 1-GW Merom Power Plant.” “From an operating standpoint, first quarter results were generally in-line with expectations and reflect the impact of our previously disclosed availability constraints at Merom. With our planned plant outage now underway, emphasizing key reliability upgrades, we expect a meaningful improvement in performance as we move through the year and into the peak demand seasons.” Capacity Agreement Overview Hallador signed a 12-year agreement to sell a substantial portion of its accredited capacity to a subsidiary of a utility for planning years 2028 through 2040. The agreement initially covers a smaller volume of accredited capacity in 2028, increasing to approximately 2/3rds of the company’s accredited capacity beginning in 2029 through 2040. The sale is priced above the recent three-year agreement signed in March, and pricing is the same for all 12 years of the contract. Hallador expects to generate more than $1 billion in cumulative revenue from the agreement, nearly doubling its forward sales book, and is expected to convert to free cash flow at a very high rate. The structure is capacity-only and does not include the sale of energy, allowing the Company to retain flexibility to optimize future energy sales. The agreement is subject to customary regulatory approvals anticipated to be received in the second half of 2026. First Quarter 2026 Highlights First quarter results reflected previously disclosed availability constraints at Merom, partially offset by continued strength in accredited capacity pricing and forward sales execution. Total revenue was $101.8 million in the first quarter of 2026 compared to $117.7 million in the prior year period, driven by lower electric sales due to reduced generation at Merom, partially offset by higher accredited capacity revenue and improved coal pricing. Net loss was $(9.3) million compared to net income of $10.0 million in the prior year period, and adjusted EBITDA was $5.5 million compared to $19.3 million in the prior year period. The Company generated $20.5 million of operating cash flow in the first quarter, which was partially used to fund capex. Hallador had no outstanding bank debt at March 31, 2026, compared to $29.7 million at December 31, 2025 and $23.0 million at March 31, 2025. Total liquidity was $97.5 million at March 31, 2026, following the signing of its new credit facility in early March, compared to $38.8 million at December 31, 2025, and $69.0 million at March 31, 2025. Capital expenditures in the first quarter were $7.7 million compared to $11.7 million in the year-ago period. Hallador continues to execute on its contracting strategy, increasing long-term revenue visibility and monetizing its dispatchable generation platform. Subsequent to quarter-end, the Company entered into a 12-year capacity agreement expected to generate more than $1 billion of contracted revenue through 2040, nearly doubling its forward sales book. As of March 31, 2026, Hallador had approximately $1.2 billion of total forward energy, capacity and coal sales commitments through 2029, or $859.6 million excluding the coal sales to Merom. Neither of these totals include the recently signed 12-year capacity agreement. Financial Summary ($ in Millions and Unaudited) * Non-GAAP financial measure, defined as EBITDA plus effects of certain subsidiary and equity method investment activity, less other amortization, plus certain operating activities including stock-based compensation, asset retirement obligations accretion, less gain on disposal or abandonment of assets, plus loss on extinguishment of debt and other reclassifications such as special non-recurring project expenses. Adjusted EBITDA should not be considered an alternative to net income, income from operations, cash flows from operating activities, or any other measure of financial performance presented in accordance with GAAP. Our method of computing Adjusted EBITDA may not be the same method used to compute similar measures reported by other companies. Management believes the non-GAAP financial measure, Adjusted EBITDA, is an important measure in analyzing our operations. Reconciliation of GAAP "Net Income (Loss)" to non-GAAP "Adjusted EBITDA" (In $ Thousands and Unaudited) Forward Sales Position - (unaudited)* * Actual revenue related to forward sales positions may differ materially for various reasons, including price adjustment features for coal quality and cost escalations, volume optionality provisions, including rollover of unfulfilled coal commitments into future periods, and potential force majeure events. Forward sales figures in the 2026 column are for the period from April 1, 2026 through December 31, 2026. The table above reflects contracted balances as of March 31, 2026 and does not include the recently signed 12-year capacity agreement. Forward-Looking Statements This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Statements that are not strictly historical statements constitute forward-looking statements and may often, but not always, be identified by the use of such words such as "expects," "believes," "intends," "anticipates," "plans," "estimates," "guidance," "target," "potential," "possible," or "probable" or statements that certain actions, events or results "may," "will," "should," or "could" be taken, occur or be achieved. Forward-looking statements include, without limitation, those relating to our ability to participate in the ERAS program (which ultimately requires the approval of MISO of our application and is a capital intensive project subject to construction, operational, financial, regulatory and legal risks that could impact the project’s viability and/or timeline) and achieve the expected benefits thereof, our ability to secure agreements in support of the development and construction of planned projects, including the expansion of our Merom Generating Station, and our expectations with respect to potential accelerating demand for accredited capacity. Forward-looking statements are based on current expectations and assumptions and analyses made by Hallador and its management in light of experience and perception of historical trends, current conditions and expected future developments, as well as other factors appropriate under the circumstances that involve various risks and uncertainties that could cause actual results to differ materially from those reflected in the statements. These risks include, but are not limited to, those set forth in Hallador’s annual report on Form 10-K for the year ended December 31, 2025, and other Securities and Exchange Commission filings. Hallador undertakes no obligation to revise or update publicly any forward-looking statements except as required by law. Conference Call and Webcast Hallador management will host a conference call today, May 6, 2026 at 5:00 p.m. Eastern time to discuss its financial and operational results, followed by a question-and-answer period. Date: Wednesday, May 6, 2026 Time: 5:00 p.m. Eastern time Toll-free dial-in number: (800) 715-9871 International dial-in number: (646) 307-1963 Conference ID: 8503380 Live webcast registration link: here The conference call will also be broadcast live and available for replay in the investor relations section of the Company’s website at www.halladorenergy.com. About Hallador Energy Company Hallador Energy Company (Nasdaq: HNRG) is a vertically-integrated Independent Power Producer (IPP) based in Terre Haute, Indiana. The Company has two core businesses: Hallador Power Company, LLC, which produces electricity and provides accredited capacity at its one-Gigawatt (GW) Merom Generating Station, and Sunrise Coal, LLC, which produces and supplies fuel to the Merom Generating Station and other companies. To learn more about Hallador, visit the Company’s website at www.halladorenergy.com. Company Contact Todd E. Telesz Chief Financial Officer [email protected] Investor Relations Contact Sean Mansouri, CFA Elevate IR (720) 330-2829 [email protected] Hallador Energy Company Condensed Consolidated Balance Sheets (in thousands, except per share data) (unaudited) Hallador Energy Company Condensed Consolidated Statements of Operations (in thousands, except per share data) (unaudited) Hallador Energy Company Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited)