Q2 2026 Hallador Energy Co Earnings Call Transcript
Key Points
- Hallador Energy Co (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 (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 (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.
Good afternoon. Thank you for attending Hallador Energy's second quarter 2026 earnings conference call. At this time, all participants are in listen-only mode. Following our prepared remarks, there will be a question-and-answer session, and instructions will follow at that time.
As a reminder, this call is being recorded, and now I'd like to turn the call over to Sean Mansuri, the company's customer relations advisor with Elevate IR. Please go ahead, Sean.
Thank you and good afternoon, everyone. We appreciate you joining us to discuss our second quarter 2026 results. With me today our Chairman and CEO Brent Bilsland. And CFO Todd Talesz. 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
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