Q4 2021 Alliance Resource Partners LP Earnings Call
Yeah.
Greetings and welcome to Alliance Resource Partners L. P fourth quarter 2021 earnings conference call. At this time, all participants are in a listen only mode.
A question and answer session will follow the formal presentation. If anyone should require operator assistance. Please press star zero on your telephone keypad. Please note. This conference is being recorded I will now turn the conference over to Brian Cantrell, Senior Vice President and Chief Financial Officer. Thank you you may begin.
Thank you Sherry and welcome everyone.
Earlier. This morning Alliance resource partners released its fourth quarter and year end 2021 financial and operating results and we'll now discuss these results as well as our perspective on market conditions and outlook.
Following our prepared remarks, we'll open the call to 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 that are contained in our filings from time to time with the Securities and Exchange Commission and are also reflected in this morning's press release wild.
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 <unk>.
Actual results may vary materially from those we projected or expected.
In providing these remarks the partnership has no obligation to publicly update or revise any forward looking statement, whether as a result of new information future events or otherwise unless required by law to do so.
Finally, we'll also be discussing certain non-GAAP financial measures definitions.
Definitions and reconciliations of the differences between these non-GAAP financial measures and the most directly comparable GAAP financial measures are contained at the end of Arlp's press release, which has been posted on our website and furnished to the SEC on form 8-K.
With the required preliminaries out of the way I'll begin with a review of our results for the quarter and year and then turn the call over to Joe craft, Our chairman President and Chief Executive Officer for his comments.
As we outlined in our release. This morning Alliance reported strong increases to key operating and financial metrics for the 2021 quarter end year compared to the 2020 quarter end year.
For the 2021 quarter.
ARLP posted increased volumes across the board as coal sales and production volumes increased 12, 7% and 17, 4%, respectively and royalty sales volumes for oil and gas and coal increased nine 6% and six 6%, respectively, all as compared to the 2020 quarter.
We also saw higher commodity prices during the 2021 quarter with coal sales price per ton increasing five 6%.
Oil and gas prices jumping 93, 1% per Boe.
And coal royalty revenue climbed 11, 9% per ton.
Reflecting higher sales volumes and price realizations.
<unk> net income and EBITDA also rose during the 2021 quarter, increasing 48% and seven 3% respectively over the 2020 quarter.
Similarly, full year 2021 results were significantly higher compared to 2020.
Coal sales and production volumes increased $4 1 million tons up 14, 4% and $5 2 million tonnes up 19, 3%, respectively. During 2021, leading our year over year coal sales revenues higher by $154 $7 million.
Higher coal sales revenues combined with a $32 $1 million increase in oil and gas royalties revenue to drive Arlp's 2021, total revenues up by 18, 2% to $1 $57 billion.
Excluding the impact of $157 million of noncash impairment charges in 2020 for.
For the 2021 year net income increased to $154 million to a $178 2 million and EBITDA Rose 23, 9% to $479 1 million.
During 2021 alliance generated $302 $2 million of free cash flow returned $52 $2 million to unit holders through cash distributions.
Reduce total debt and financing leases by $161 $5 million to lower our total leverage to 193 times and increased our liquidity by $105 4 million.
At this point I would like to take a closer look at several factors that impacted arlp's results during the 2021 quarter.
We experienced transportation delays during the quarter as rail and barge company struggled to manage performance disruptions due to labor shortage and scheduling challenges related to COVID-19.
Resulting in a 196600 tons of coal in transit at the end of 2021.
These delays reduced our coal revenues by $16 $5 million EBITDA by $8 9 million and net income by $7 $1 million during the 2021 quarter.
We expect these tons will be delivered in the first quarter benefiting our 2022 results.
We also noted in our release earlier this morning that our coal mines experienced increased operating expenses during the last quarter.
Cost per ton for the 2021 quarter, we were impacted by an $11 $8 million buyout of a coal contract that enabled us to sell approximately 132300 tons at a higher price.
While the cost to buy out this contract was fully expensed in the 2021 quarter over half of those tons will be shipped during the first quarter of 2022 at higher margins as the increased pricing we obtained is realized.
Increased operating costs also reflect an increased sales and production mix of higher cost metallurgical export tons and.
In addition at the end of each year, we perform actuarial and other reviews to adjust approval for various liabilities such as workers compensation.
For the 2021 quarter. These reviews resulted in a $6 $8 million.
Unfavorable cash accrual adjustment in.
In comparison, we saw $3 6 million of favorable noncash actuarial and accrual adjustments in the 2020 quarter.
Not surprisingly in this economic environment, a portion of our increased operating expenses also reflected inflationary pressures that are being felt by most businesses, especially with respect to wages higher materials and supply costs.
Particularly for steel related items, such as roof bolts and wire mesh and petroleum related supplies like lubricants and diesel fuel.
As well as higher freight cost pass through from vendors and.
In response to continuing supply chain concerns where possible. We've made advanced purchases of critical materials to both mitigate potential future cost increases and to ensure that our minds have adequate supplies on hand.
As reflected in our initial 2022 guidance. We currently anticipate an inflationary pressures are likely to persist in the near term, resulting in segment adjusted EBITDA expense per ton, increasing by approximately 10% to 16% over 2021 full year levels.
With that I'll turn the call over to Joe for his comments on the markets and his outlook for ARLP Joe.
Excuse me, Thank you, Brian and good morning, everyone.
During our last earnings call, we outlined several reasons why fossil fuel prices and by that I mean oil natural gas and coal.
Have risen dramatically around the world.
Primarily because of supply fell woefully short of growing demand as economies around the world continue to adjust from the COVID-19 disruptions that began in early 2000 2020.
The energy crisis persist today as the pandemic remains disruptive to supply chains and just as importantly.
Due to continued pressures from governments regulators financial institutions.
<unk>, actavis and even customers unwilling to make commitments all of which.
Contributing factors restricting growth in fossil fuel production and investment.
These conditions remained intact, both in the domestic and international coal markets through the end of 2021.
Resulting in natural gas prices rising to levels beneficial for coal demand.
And our primary U S markets year over year cogeneration.
Climbed nearly 21% during 2021 and would have been even higher if utilities had not been concerned about preserving critical low coal stockpiles.
With many utilities reporting 20 days or less co inventory and experiencing the supply shortages I mentioned previously power companies chose to turn two higher cost natural gas generation.
Similarly, our international coal markets continued to benefit from increased power demand high natural gas and LNG prices limited coal supply response and transportation disruptions.
Reflecting positive international supply demand fundamentals and attractive pricing.
Our LP shipped approximately 4 million tons to the export markets in 2021 more than tripling, our international coal sales volumes over 2020 levels.
Absent any significant global economic downturn.
And destruction of power demand.
We expect these favorable market conditions to continue for the near term.
The combination of labor shortages and the surge of the omicron variant affecting industry wide coal transportation and production on the supply side.
Long with a favorable natural gas prices Bridget January weather and the need for domestic utilities to restock low inventories.
The demand side.
And I would point to the shortfall in coal supply continuing into 2022.
Keeping coal prices.
Elevated levels.
Export demand is just as robust as the world LNG market prices remain steep and Russia's intentions towards Ukraine has caused uncertainty of natural gas supply into Europe .
Arlp's initial guidance for 2022 reflects this favorable outlook.
With $32 1 million tons of coal already priced and committed for this year.
We are anticipating 2022 sales volumes from our collaborations to increase 9% to 14% and per ton price realizations, 14% to 19% higher compared to 2021 levels.
Although as Brian mentioned, we also anticipate higher per ton operating expenses this year.
We're still buoyed by increased coal prices, which we now believe we will.
Expected Arlp's segment, adjusted EBITDA margin per ton sold in 2022.
Should increase by approximately 25% compared to 2021.
Our royalty segments delivered record financial results in 2021.
And we expect favorable market fundamentals will support further growth in our royalty segments in 2022.
For our oil and gas royalty segment, we believe total BOE sales volumes will increase modestly.
And a favorable forward price curve for oil natural gas and Ngls.
We will most likely support higher price realizations in 2022.
Anticipated increases in coal sales volumes and prices from Arlp's mining operations should also benefit our coal royalty segment with royalty time, so are expected to increase approximately seven 5%.
Revenue per royalty time, 6% to 10% higher compared to 2021.
As indicated by our guidance this morning, and with market fundamentals remaining extremely favorable for 2022 and beyond.
ARLP is well positioned to deliver solid growth and attractive cash returns for our unit holders.
We remain committed to targeting annualized unit holder distributions this year.
Approximately 30% of free cash flow before growth investments in.
And I'm pleased that our board elected to support their commitment by increasing arlp's cash distribution to unit holders by 25% over the sequential quarter.
I'm proud of the efforts of the entire alliance organization to deliver the exceptional results we enjoyed in 2021.
Facing ongoing challenges from Covid supply chain shortages and disruptions our employees worked tirelessly to meet the needs of our customers. During this critical time.
ARLP to benefit from favorable market conditions.
Their dedication ARLP is stronger than ever and well positioned for the future.
That concludes our prepared comments and I'll now ask the operator to open the call for questions.
Okay.
Thank you.
Ask a question. Please press star one on your telephone keypad.
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A question from the queue.
All participants using speaker equipment.
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Mr Hughes.
Our first question is from Nathan <unk> with the benchmark company. Please proceed.
Hey, good morning, Joe Brian Thanks for taking my questions.
Good morning.
Maybe I'll start on the sales side it looks like the midpoint of your full year 'twenty two shipment guidance is towards the high end of your prior up 6% to 12% commentary can you guys give us your thoughts on the new range is an increase in demand mostly on the domestic side exports both.
And where does the increased production is going to come from and kind of along that front. How is your current labor situation. Both on the hiring front and any effects from Covid I know you touched on that briefly in your prepared remarks.
Sure, Yes demand is robust both domestically and internationally.
So our targets and below.
Our total sales this year as you suggested we would believe it will come in at the high end.
The range that we've given with the one main issue being.
Covid interruptions and the workforce.
That we plan to hire to A&D unit that gets us to this higher production level.
We have been successful.
Excuse me in the latter half of the.
2021.
The hiring people to add two units so thats allowed us to run it.
Run rate that you saw in the first and the fourth quarter, which we believe is sustainable and will continue to grow as we hire people to meet that higher production level. So.
So.
Labor is tight.
We've been successful so far we feel comfortable.
That we will be able to hire the people, but the range is really they are primarily for whether we can or cannot hire those people. So.
If we could.
Fully get to full staffing sooner than we anticipate.
Then we would definitely be at the high end of the range that we have here. So it's not a demand issue, it's definitely our ability to find and attract the workers.
For the market opportunities we see.
I would add.
As we look at our sales ranges for this year.
Joe mentioned that we've been managing a tight labor situations.
<unk> from Covid is the omicron variant.
Touched us as it has most other companies.
The rail and barges have been struggling to manage it on their end as well.
So it's a question of as Joe indicated can we hire the people and get the tons produced and then can we actually sell that move those tons to our customers as.
As scheduled.
We noted in this quarter, we had about 197000 tons that were in transit.
That had a meaningful impact on our results for the fourth quarter of last year.
Hopefully that's just a timing issue, we expect to deliver all of those tonnes this quarter.
But we will we are very cognizant of the fact that.
Transportation delays could.
It hit us as we move through 2022 as well.
I think on that score I mean right now.
We've got two 3 million tons committed to the export market.
In 2021, we shipped $4 million.
If the rails aren't responsive then that will push us more to the export market, which is basically delivered off of our barge loading operations.
Great Great color there guys I appreciate it and that was going to be my next question, Brian Jo about transportation. So.
The only thing I would ask are you guys seeing transportation improve but all sequentially or do you have any thoughts on when you think or hope that that could normalize.
It's.
It's really dependent on our customer and money. So we have definitely seen some improvement.
Some of our mines and customers that have the.
The capacity there to be able to have railcars as an example.
But it's still spotty, it's still not where we want it to be it's still not as predictable as we wanted it to be and thats evidenced by.
The Denver tons, we had in transit at the end of the year.
Everybody is working closely we're in daily communication with the transport providers and our customers.
Hopefully.
The Varian slows down the impact moving forward things will get back on schedule, but.
It remains a challenge today.
Got it got it makes sense.
I guess, maybe shifting over to 2022 Capex guidance.
Spending looks like it's expected to be up around $100 million year over year can you guys give us an idea of what's behind that increase.
Yes, a lot of it's due to the volume expectations you see the <unk>.
Increases that were forecasted in our initial guidance I think last last year, our five year average.
Per ton cost for maintenance capital was about $4 90 per ton.
Our op support very very hard to.
Be as efficient as possible.
Use everything at their disposal to keep our capex in check and in fact, I believe if you look towards the back of our release.
One of our reconciliation tables, our per ton cost are actually dropping to about $4 41 per ton over the next five years.
But increased volumes will definitely have an impact on the aggregate amount that we spend in 2022.
Okay got it Brian I was just wondering if there was any additional spending on equipment and things like that that you guys here and bring it on multiple.
It gets into the timing of rebuild schedules et.
Et cetera.
But its gratifying to see that our per ton costs are expected to come down but increased volumes do result in higher capital costs.
There will be some growth capital.
For that increased production by adding a couple of units that you just spoke up yes that'll be in the growth capital will be taken from our excess cash flow for growing the company.
But it's not large numbers.
Yeah.
Got it great. Thanks, Jay Thanks, Brian and then just finally on that I know I asked this question every quarter, but.
Can we just get your thoughts on what your priorities are from a capital allocation standpoint, obviously just raised your distribution by a nice 25% again consistent with your 35% of free cash flow before growth.
Do you expect to maybe revisit that target at any point or maybe consider variable target or are there still investment opportunities out. There you guys are considering whether it be coal or oil.
Oil and gas.
Royalty side of the house or do you plan on kind of focusing on paying down debt given access to capital just would appreciate your thoughts there. Thanks.
So.
So.
As we mentioned, we have 30% of our free cash flow targeted for distributions.
To your question.
We'll be considered variable and in the future and I think the answer is yes.
Right now we're focused on maintaining that distribution as we evaluate growth opportunities.
We still remain committed to our minerals segment.
And we do plan to.
Continue to invest in that segment.
And we are looking at several non fossil opportunities.
We don't have anything to report on that but we do have several.
Uh huh.
Ideas and our site I think the main issue that we continue to work on it.
Is what is the financial capacity or access to capital as we think about growing the company and.
As we invest in.
Non fossil fuel type investments, what kind of capital would be available to that relative to <unk>.
Going forward when our current revolver expires, so we're having conversations with their lenders, who love our credit and they love our management team. They love what we've been able to do but they are feeling ESG pressures. So we're trying to work through.
And a construct that will totally support our coal operations for decades, but at the same time.
<unk> capital So we can put leverage on acquisitions.
That's not totally defined and so thats one reason we are cautious.
What our distribution level is so that we do not miss an opportunity to grow this company.
As these opportunities present themselves.
Can't find those opportunities, we still have the ability to.
Further pay down debt.
But our primary east.
Focus is on growing the company and that's what we're hoping to be able to find opportunities to where we can deploy there.
Free cash flow for growth in the future.
I appreciate that color Joe.
<unk> got some time and best of luck here going forward into 2022 thank you.
Nate.
As a reminder, this star one on your telephone keypad, if you would like to ask a question.
Our next question is from Scott Ferguson with Pacific value. Please proceed.
Yeah.
Hi, Brian Hi, Joe.
Morning, Scott.
So I had two questions.
One of them.
<unk> got a pretty dominantly answered.
On the balance sheet.
So you talked about potential.
Investments are this year.
But looking out a year.
Where do you see the balance sheet.
Have it where you want it as far as that cash are.
Where do you see us at 12 months.
Yes, I mean, if you look back at what we've done to strengthen the balance sheet since COVID-19 hit.
Made significant progress during 2020 and again in 2021.
Strong cash flow generation.
And the most recent year you look at our guidance there will be strong cash flow generation. This year undrawn on our revolver undrawn on our AR securitization.
We are amortizing continuing to amortize some equipment leases.
And we have the bonds outstanding.
Joe mentioned, we are.
In contact with our advisors on the capital markets to determine.
What our access to capital could be and what how that might be price. As you know we're fortunate we don't have any near term maturities to deal with but we definitely want to understand what our options and opportunities are when it is time to address those side.
Look we're looking to grow the company I mean, where we have been on the energy company today.
And we're looking to be an energy company for the future.
Want to return cash to our unitholders at an appropriate level, but our real focus is on growing the organization for the next several decades.
And I would just add I think we're confident.
That we can.
We do have access to the capital markets.
As Brian said, we're just trying to determine.
What is the proper level.
We had a reasonable pricing point.
And then the other.
Main thing is what I said earlier.
As we go into next year, hopefully, we will have more opportunities.
And this then possibly what we will have this year so.
And I would expect those.
To have some form of.
The ability to be finance that could bring more financing capacity to the table.
I feel really good about where we are and our balance sheet and the flexibility we have.
To be able to to manage.
All aspects of air.
And our strategic plan I do as well.
May recall, we have.
<unk> said in the past that we prefer operating at a one times levered.
Historically.
We're below that today on a gross basis and when you look at the cash that is on the balance sheet, even better than that on a net debt basis. So.
I agree with Joe.
Comfortable with where we are absolutely believe we will have access to capital.
It's just a question of.
How that might be structured and the cost around it but.
Very very pleased with how we've been able to maintain the balance sheet.
We are the highest rated coal company in the country.
And.
If you look at our financial metrics credit worthiness alone we are investment grade.
So I <unk>.
Second Joe's comments that we should have.
The access to the capital that we need to grow our business and maintain our core businesses today.
Alright. Thanks.
As far as 23.
Our forecast for tonnage.
So.
That's.
About 40%, 45%, how does that compare to prior years.
Pre COVID-19 , we were right at 38.
Something in that and so.
If we can hire the people we will be back at that run rate by the end of the year.
And so.
So yes.
Yeah.
As far as yes, like a year and a half out so you've got about 40% 45%.
Already pre sold is that pretty typical to the past.
It's been at that level for some time as we've talked previously.
Utilities.
Continue to take a relatively short term view, we have been successful in.
Closing some term business.
But as Joe mentioned in his comments.
Many customers are are continuing to look at this on a shorter term basis.
One year type of arrangement.
So where we are today it probably is a little bit better than we have been in the very recent past.
As you know utilities are the stockpiles are very low.
They need to replenish those at a minimum and Nat gas pricing stays where it is.
You should continue to see some strong coal burn.
I'm confident that our marketing team will be able to secure the.
Fully booked out.
Contracts.
As we move forward.
Alright, thanks, guys.
Thank you Scott.
Our next question is from Lucas pipes with B Riley Securities. Please proceed.
Good morning, gentlemen, great to hear your voice and good work on all these fronts. Thank you very much for taking my question.
What it does.
I first wanted to follow up a bit on the on the cost side and maybe you addressed it in the prepared remarks, but would you be able to give a rough breakdown of that drivers between mix labor and material.
Any additional color there would be very much appreciated. Thank you.
Yeah.
We should be able to have a similar mix in terms of assuming you are talking about met and thermal.
I was thinking of kind of higher cost versus lower cost operations I assume.
Maybe there is maybe there is a change there too.
Yes.
Not not as much I mean, we were we are increasing production.
It is at our lower cost operations currently are long walls are running very very well.
Where we've had challenges in.
And in particular with the impact of the <unk> has been at our room and pillar operations.
You may see some slight difference in the mix between met and thermal in 2022 over 2021.
Depending on the factors that we've talked about earlier.
The real issues are on inflation.
As I mentioned generally around steel and petroleum related products.
Our minds, we're also doing a really good job of making sure that we have.
Sufficient materials and supplies on hand today. So if you look at how we are acquiring those materials to <unk>.
Address those issues.
Fourth quarter it was probably in the one two to $1 $5 million range just.
Making sure that we have sufficient stockpiles on hand, they do get consumed very quickly, but we are making advanced purchases.
Productivity, which also impacts cost.
We were impacted by <unk>.
And talking to our operational teams.
Really difficult to specifically quantify but it probably hit productivity around 5% or so during the quarter.
Given the needs of our customers.
Our men and women stepped up worked overtime extra shifts et cetera, all of which impact costs. So we.
We know that inflation is here, it's a little bit difficult to specifically predict how and when it may impact us going forward, but as we planned out.
Our business for 2022 and beyond looking at specifically our individual vendors that are critical to us we hope we've taken that all into account.
Very helpful. Thank you very much for that perspective.
I wanted to ask.
On the met coal side.
Now first.
The prices we are seeing on the screen are remarkable and.
Wondering if you have a view on what has been driving those prices in particular, and then secondly to what extent you might be able to take.
Take advantage of dose.
Bead shifting shifting tons from thermal to Matt.
Et cetera. Thank.
Thank you.
Yes, so the general economy is obviously what drive income.
As well as the supply issue.
Our international producers are facing the same things, we're facing as far as Covid is concerned.
Some of those countries had been lot more stricter than others.
As the impact of the supply.
On <unk>.
Production.
So there is just.
The global economy is stronger.
Then the spline, it's impacted somewhat by investments a.
A year ago, the financing community was very willing to support the metallurgical suppliers.
They too have even had some impact.
The Asian countries back.
Back to ESG so.
We expect pricing to continue to be very strong.
And very constructive.
So we would expect that we have.
An opportunity to double.
Our met sales.
Not quite double but increased by 50%.
Where we were in 2021 so.
We are hopeful for that it's not totally baked into our guidance, but because.
It's unpredictable.
I think that first quarter has been impacted by the Chinese and the Olympics.
And but I think that from our conversation in the marketplace. We expect the market to be very supportive over the next two quarters for sure.
At the prices that you are talking about being printed right now and so it's very attractive.
We would like to take advantage of it.
We only have the one met mine.
In West Virginia and.
Some of our product out of our AMC mining operation goes into into the met market.
We're looking forward to participating in that marketplace.
Okay.
Thank you very much.
Point.
Perspective, and best of luck.
Thank you Lucas.
Our next question is from Arthur caliber Chinas from ANC capital. Please proceed.
Okay. Thank you.
Guys just a couple of questions.
With the Russia, Ukraine thing and you mentioned it in a sentence.
Your opening remarks, so our administration has gone through all the Asian countries and said, we want some LNG redirect it to Europe and it got me really thinking about it have you guys been or the industry had been approached by the administration to see if we can get more coal supplies to Europe and the other thing is as I was thinking about it if you're one of these Asian countries all the way from <unk>.
Now I'm down to the Philippines.
And you've got these LNG ships and somebody is asking you high level ask.
For cargos and even if you kick them you don't give them back to Europe .
I'm thinking you must like you must question the supply of natural gas and you must be seeing I would think you'd think about a little better cold mix in the future just because I know the business. So well I just wanted to get your thoughts on that.
The answer to your first question no the.
Department of energy has not contacted us to increase our coal supply.
Quite the contrary.
They prefer not produce which is sort of crazy.
But.
LNG is shortened supply that's why the prices are so high.
<unk>.
The government is trying to do what they can do.
Specifically I think they are talking to Qatar to try to increase their supply.
The problem, though is there is no real.
Capacity to even.
You'll receive it.
So I think on the coal side prices are very I mean, they just within the last two weeks.
Grown grown dramatically into Europe , I would expect.
That if there is coal supply.
To provide.
That there will be opportunity because.
Europe has to look at any and all sources going forward whether.
They changed their energy policy, you would think that the NATO nations wood.
We're seeing France for example, they had a limit.
How many tons that they would allow to be coal coal tons that they would allow to be burned in they've suspended that.
Temporarily through February .
So that there could be more cogeneration, but at the same time the politics.
Carbon and climate and ESG.
You would think with this.
Elevated world energy prices.
There would be some <unk>.
<unk> assessment of what the proper transition should be.
And that that would.
Allow for more supply to balance the demand.
So far we're seeing that the governments.
Beat pretty stubbornly committed to.
<unk> targets.
As a result I think.
We're going to have high prices for awhile.
Okay.
Stimulating.
Any confidence to go out and make large investments to bring on supply.
Just like our supply we're doing it incrementally, but it's not going to do.
<unk> still short of what the demand is and that's why I'm confident.
We're more.
Production driven right now than we are market driven because the market's there for us while we got these fine people to weaken.
Try to benefit from these higher prices.
Alright, yes, thank you and it's funny at the last two sentences you are talking about the ESG and whatnot and there was a story of extending coverage chinas.
Premier said little low carbon ambitions must not interfere with normal life. So.
Again, he is not going to get any pushback, but it seems like it's starting to take these prices are starting to take a bite.
And let me.
One other thing I think on two last questions two quarters or three quarters ago. I thought you guys are sort of close to doing something in our oil and gas royalty deal.
I thought it was going to happen or something like that I'm, just wondering what's going on in that space. Because I think it was in oil we might've been 40 bucks or something like that and I'm sure Everything's changed and just what's going on in that environment and in terms of M&A and transactions and that's it.
You may be.
I'll be referring to an acquisition that we closed in the Permian in October .
So the other one I thought there was you were close to another one I don't know or whatever but I am sorry.
That's okay, not sure exactly what you're referring to there but in terms of the activity in that space.
It has picked up.
Definitely in the deal flow.
We are evaluating numerous opportunities routinely.
Disciplined in how we approach it we want to make sure our.
Economic underwriting.
As appropriate.
But there could be significant opportunities too.
Increase our activity there.
The bank markets have begun to open back up a bit RBS transactions.
Our definitely available to us.
So we are generating nice cash flow out of that part of our business if necessary.
Could finance activities, there as well.
So hopefully we'll continue to see growth out of that part of our business.
Okay got you alright, thank you very much.
Thanks Arthur.
Our final question is.
Sure private Investor. Please proceed.
Hello.
Notice you mentioned about the non fossil fuel investments.
Was that by any chance.
You guys be open minded.
Non fossil fuel mining. So for example in Bloomberg I read that one of the Trona mine up in Wyoming might be for sale by <unk>.
From India, there if anything like that crosses your guys' minds as being possible.
You are mining experience and so on yes, it's very green and all that.
Used for glass for solar panels, and this kind of a thing that might help financing the whole company.
Right.
Meaning obviously is a core competency of ours. So that is definitely a vertical that we're evaluating again I don't have anything specific I can share with you.
And we're just not advanced in that.
Lay out of it.
A real concrete.
Strategic dis.
A discussion on that but.
Mining is a core competencies of ours and we are definitely evaluating.
Areas, where we could produce other products and use our skill set.
Excellent. Thank you.
Thank you.
We have reached the end of our question and answer session I would like to turn the call back over to Brian for closing comments.
Thank you Sherry we appreciate everyone's time this morning as well as your continued support and interest in alliance or.
Our next call to discuss our first quarter 2022 financial and operating results is currently expected to occur in early may and we hope you'll join US again at that time this.
This concludes our call for today, thanks to everyone for your participation and continued support of ARLP.
Yeah.
Thank you. This concludes today's conference you may disconnect your lines at this time and thank you for your participation.
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Sure.
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Sure.
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Thanks.
Sure.
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Okay.