Q2 2023 CONSOL Energy Inc Earnings Call
Good morning, and welcome to the Consol energy second quarter 'twenty twenty-three earnings conference call.
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I would now let's turn the conference over to Nathan Tucker Director of Finance and Investor Relations. Please go ahead.
Thank you and good morning, everyone welcome to Consol Energy's second quarter 2023 earnings Conference call.
Any forward looking statements or comments, we make about future events are subject to risks certain of which we have outlined in our press release and in our SEC filings and are considered forward looking statements within the meaning of section 20 <unk> of the Securities Exchange Act of 1934, we do not undertake any obligations of updating any forward looking statements for future events or otherwise.
We will also be discussing certain non-GAAP financial measures, which are defined and reconciled to comparable GAAP financial measures in our press release and furnished to the SEC on form 8-K, which is also posted on our website. Additionally, we filed our quarterly report on Form 10-Q for the quarter ended June 30th 2023 with the SEC. This morning, you can find additional information regarding the <unk>.
Company on our website www Dot Consol energy Dot Com, which also includes a supplemental slide deck that was posted this morning.
On the call with me today are Jimmy Brock, our Chief Executive Officer attached to car, President and Chief Financial Officer, and Bob Braithwaite, Our senior Vice President of marketing and sales.
In his prepared remarks, Jimmy will provide a recap of our second quarter 2023 achievements and a detailed discussion of our operations.
Natasha will then provide an update on our marketing and financial progress and our updated 2023 outlook in his closing comments Jimmy will lay out our key priorities for the remainder of the year. After the prepared remarks, there will be a Q&A session in which Bob will also participate with that let me turn it over to Jimmy.
Thank you Nate and good morning, everyone. During the second quarter Consol energy delivered strong results on multiple fronts.
We achieved our second highest quarterly adjusted EBITDA and free cash flow levels in our history.
As we retire our term loan b achieved a net cash position for the first time in our history.
Added an incremental $95 million of capacity to our revolving credit facility and using the free cash flow generated during the second quarter, we purchased roughly 2 million shares of our outstanding common stock.
The P&C also achieved its second highest quarterly realized revenue per ton sold and average cash margin per ton sold during Q2 'twenty three.
Last but not least we shipped more than 5 million tons to our Consol Marine terminal, which is also a quarterly record.
In keeping with the theme of our robust capital allocation strategy since announcing our enhanced shareholder return program at the end of Q2 'twenty. Two we again deployed every dollar of free cash flow that we generated in the second quarter of 2023 with the majority going towards share buybacks and most of the remaining.
Under towards retiring our outstanding debt to.
To further highlight this considering the fact that we generated $625 million of free cash flow since the end of Q2 'twenty two yet our total cash position has remained largely unchanged since then.
Also as dictated by our capital allocation strategy, we've pivoted more towards shareholder returns in recent quarters as our debt near target levels. This pivot, which is now specifically focused on share buybacks has allowed us to retire nearly 10% of our public float through July 31st of <unk>.
23.
Let's now discuss our operational performance on.
On the safety front, our Bailey preparation plant at mine preparation plant and Consol Marine terminal each had zero employee recordable incidents during the second quarter of 2023.
Our coal operations finished the quarter with a total recordable incident rate well below the national average for underground coal mines.
Coal production at the Pennsylvania mining complex came in at $6 3 million tonnes in Q2 of 'twenty three a reduction compared to 7 million tons in Q1 of 'twenty three.
However, this was expected and telegraphed on our last earnings call and was driven by multiple longwall moves at the PMC in the second quarter compared to none in Q1.
On the cost front, our P. AMC average cash cost of coal sold per ton for Q2, 'twenty three with $36.33 compared to $33.61 in Q1 'twenty three.
The increase was mostly due to the reduction in production tons associated with the previously mentioned longwall moves in the quarter, which impaired our fixed cost leverage compared to the prior quarter.
The good news is on a year to date basis, our average cash cost of coal sold per ton has tracked slightly below the midpoint of our guidance range.
Moving on to it.
During the second quarter of 2023, the ramp up to full run rate production near completion.
At the end of the quarter all three continuous miners Super sections were installed underground and long term construction work for a onewest means intersection was nearly complete.
However, this ramp up was much slower than originally anticipated.
We encountered a challenging geology, such a sandstone intrusions and multiple C M sections and water infiltration and section number three which created difficult mining conditions. During the first half of 2023 and expedited the need to transition to one west.
Now wrapping up this construction work will enable the three super sections to produce and several different blocks of the reserve.
Higher average production rates and balanced coal quality across the mine.
Additionally, the labor markets continued to improve in Q2, which allowed us to increase staffing levels throughout the quarter.
The Hickman mining complex produced 78000 tons of coal during the second quarter of 2023, and so the 126000 tons of <unk> and third party coal in aggregate during the quarter.
Year to date.
Mining complex so they combine <unk> 234000 tons of Pittman and third party coal.
There continues to be strong interest for our products across a variety of markets and we are actively marketing this product both domestically and abroad.
Moving to the Consol Marine terminal.
We achieved our second consecutive quarter throughput record with a volume of $5 4 million tons shipped during Q2, 'twenty three representing an annualized rate greater than 20 million tons.
This compares to $4 6 million tonnes in Q1, 'twenty, three and three 8 million tons in the prior year quarter.
On a year to date basis, we shipped just shy of 10 million tons to our terminal with 82% of that total coming from our Pennsylvania mining complex.
These noteworthy achievements at the terminal provide tangible evidence that our debottlenecking efforts have been effective and that our increased annual throughput capacity of up to 20 million tonnes is achievable.
This added capacity translates to an increase the ability to execute our longer term strategy of moving more P. A M C tons into growing export markets.
The significant success that we have achieved thus far toward our strategic goal of being more export focused is due to a combination of factors.
Including the dedication of our CMT team members and Debottlenecking efforts materializing at the terminal to date and our strong relationship with our railroad partners.
Revenues for the quarter came in at a record $31 4 million and CMT operating cash costs were $7 million.
CMT adjusted EBITDA also a new quarterly record finished at $23 9 million compared to $15 1 million in the prior year period.
With that I will turn the call over to potash.
Thank you Jimmy and good morning, everyone.
Let me start with an update on the marketing front and our contracting progress.
And a trend similar to the first quarter of this year, we continued to see weak domestic demand for our product our school demand for the power generation market remained under pressure due to the overhang of a warm winter weather.
This warmer than normal winter reduced heating demand in the first quarter, but you Don resort and lower natural gas prices.
Since then domestic customers have seen elevated stockpile levels under dosed restocking needs during the second quarter.
However, due to the advantage of our high quality product and assets our marketing team. Once again was able to quickly respond and devote a significant number of additional tons into the export market during the second quarter, but the demand for our product remains strong, particularly in the industrial and crossover metallurgical market.
The largest industrial market, we saw as the Indian cement market.
Capacity in India has risen substantially in the past eight years, adding an incremental 160 million tons, a 50% increase which brings total current capacity to nearly $550 million.
Furthermore, due to rapid urbanization and hired Goldman spending on infrastructure and housing all customers in India are expecting to continue to grow that installed capacity.
This is exciting for us as a premium high heat content product is design it in this market.
Global supply of high calorific value products continues to decline.
While demand for our product and several growth markets continues to expand on.
The crossover metallurgical front, we shipped approximately 650000 tons during two to 'twenty, three which is one of the highest quarterly levels. We have achieved in recent years.
With the commissioning of our fifth Longwall Enlow Fork mine, which has lower sulfur content, we are seeing increased demand for our product. Additionally.
Additionally, the long term markets, we expect to solve particularly in Latin America and soda in Asian countries are becoming more dependent on U S supplies.
As they move away from Russian calls.
This should bode well for us as we continue to focus on taking additional market share moving forward.
During 223 resource $6 4 million tons of B M sequel at an average realized school revenue per ton sold of $81.27 compared to $6 2 million tonnes at $72 on 18th since the year ago period yet.
For the second consecutive quarter sales into the export industrial market outpaced sales into the domestic power generation market, which has only happened twice in our history.
Overall sales into the export market during two to 'twenty three accounted for 78% of our total recurring revenues and other income, including 31% from the export industrial market and 12% from the export crossover metallurgical market.
In fact domestic power generation accounted for less than 20% of our recurring revenues and other income in Q2, 'twenty three which is a substantial shift in our sales mix in a short period and is a testament to the success of our marketing strategies.
Furthermore, on a year to date basis.
Domestic power Gen now only accounts for 23% of our record revenues and.
Other income compared to more than 50% and full year 2017.
This portfolio optimization of shifting a significant portion of hawk tons into the export market to offset weakness in the domestic market is a true differentiator for us and reduces our dependence on the shrinking domestic power generation market.
During the quarter, despite a challenging market environment, our sales team Opportunistically increased our pulpwood sold position at the P. M C by $4 4 million tonnes.
Deliveries through 2026.
The majority of these tons were sold into the export industrial market, where we continue to increase our market penetration in line with our strategic shift towards export demand growth.
However, we should mention that a portion of these tons are sold into the domestic market as well under a fixed price arrangement through 2026 as domestic utilities still have an appetite to enter into long term agreements with strategic suppliers.
We remain near fully contracted for 2023, and $17 6 million tons contracted for 2024.
Puts us ahead of schedule for 'twenty 'twenty, four combat to where it'd be happy at this point over the past several years.
Well I'm tracking progress beyond 'twenty 'twenty four remains robust as well specifically in the export market.
Now let me provide an update on our recent revolver amendment and balance sheet management progress before discussing our financial results.
During the second quarter of 2023.
That's really amended our revolving credit facility to add $95 million of incremental capacity, which included commitments from multiple new lenders to the facility and upsized commitment from 60% of the existing lenders.
As a reminder in March of this year, our then $400 million revolver capacity was reduced to 260 million several banks elected not to extend their commitments due to ESG pressures.
At that time, we secured commitments from multiple new banking partners totaling more than $100 million, which partially offset the declines.
These new partners elected to upsize their commitments in this latest round and we once again brought in additional new banking partners.
As such the Waldman correct facility now has a borrowing capacity of $355 million and maintains a July 2026 maturity.
Furthermore, we were successful in using soda and restrictive covenants, specifically around investments and shareholder returns, which provides us more flexibility to execute our capital allocation strategy.
Majority of these covenants have been simplified and most governance I'm now leverage and liquidity base moving forward.
This upsizing is noteworthy given the current challenging banking environment and demonstrates ongoing capital market access for coal companies generally and for Consol energy in particular.
We believe this recent amendment highlights our significantly improved credit profile, the strength of our high quality asset base and the prudence.
We operate our business.
S&P Global ratings also recognized our improved credit profile and increased our corporate credit rating to B, plus with a stable outlook, which ranks us at the top of the list for all publicly traded U S School companies.
On the balance sheet management front.
During 223.
We generated $181 million of free cash flow.
Approximately 32% of which was deployed towards reducing our gross debt level and executing well with the amendment.
During the quarter with political autonomy and redeemed $25 million off our second lien notes.
Second when factoring in our unrestricted cash and short term investments. We are pleased to report that we achieved.
Net cash position for the first time in our history.
As of June 30, we had a net cash position of $62 million.
Sure.
Injunction with our successful revolver Amendment, you finished the quarter with a robust liquidity position of $515 million.
Fourth I am pleased to report that since the end of the second quarter.
We made a $24 million discretionary redemption before litter Todd our second lien notes.
This brings our pro forma gross debt level to approximately $200 million, which is comprised of our tax exempt municipal bonds. The consol Marine terminal.
So when you're mining complex plus various equipment finance leases.
Most importantly, we believe that the remaining pieces of our debt of manageable in size and position and stable capital market.
Additionally, the maturities are separated by multiple yours are.
CMT bonds mature in late 2025.
PMT refuse disposal of bonds maturing in 2028.
Now, let me recap our financial results.
This morning, we reported a strong second quarter 2023 financial performance with net income of 168 million or $4.94 per diluted share.
Additionally, we finished June 23, with adjusted EBITDA of 276 million and generated 181 million of free cash flow.
Let me put this free cash flow generation into perspective.
During the second quarter.
They'd need.
Nearly $80 million in cash taxes come back and no payments in <unk> 'twenty, three we generated 221 million and free cash flow, which partially just talks to comparison.
Now let me provide a quick update on our outlook for 2023 on the guidance front for the Pennsylvania mining complex.
Despite a significant decline in domestic demand year to date, we are reiterating our sales volume range of 25 to 27 million tonnes and cash cost guidance range of 34 to $36 per ton.
As we continue to optimize our portfolio and take advantage of export markets.
However, due to reduced the API two forward prices.
We are slightly reducing the top end of our expected average realized core revenue per tonne sold by $1 to a range of 76 to $80 per ton from the previous range of 76 to $81 per ton.
It's been mine due to the slower than expected ramp up during the second quarter.
Adjusting our 'twenty to 'twenty three production guidance range down to 400 to 500000 tons from the previous range of 400 to 600000 tonnes.
Once that's been achieved stable operating results, we intend to provide more detailed guidance.
We are disappointed by the gradual ramp up progress, which has in turn delayed our ability to provide detailed guidance to this point we.
Thank you for your patience and we are confident that we are nearing full run rate production.
Lastly on the capital expenditure shrunk, we are maintaining our guidance range of $160 million to $185 million for 'twenty to 'twenty three.
With that let me turn it back to Jimmy.
Thank you <unk>.
Let me now provide an update on our shareholder return program.
We deployed approximately 70% of the free cash flow generated during the second quarter towards repurchasing roughly 2 million shares of our outstanding common stock.
This was accomplished through a combination of in quarter repurchases and an approximate $50 million tend to be five one plan put in place for the month of July .
We also view can be five ones as a tool to be used when necessary to smooth out our share buybacks across potentially choppy monthly cash flows or to allow us to remain in the market during earnings blackout periods. In total we deployed $124 million of our Q2 23 free cash flow.
Towards repurchasing nearly 2 million shares of <unk> stock at a weighted average price of approximately $64 per share.
This brings our year to date share repurchases as of the end of July to three 1 million shares or nearly 10% of our public float as of year end 2022.
Since introducing our enhanced shareholder return program in Q3, 'twenty two we've returned more than $10 per share to our shareholders via buybacks and dividends and approximately 12 month period as mentioned last quarter. We continue to view share buybacks as the most accretive form of shareholder returns right.
Now and intend to prioritize buybacks over dividends moving forward.
For the back half of 2023, we remain focused on a few key areas that we believe are crucial for our company.
As we entered the post summer contracting season, our sales team remains focused on leveraging our high quality products to continue to build out our contract book and diversify our revenue streams, which is proven advantageous in the first half of 2023.
We have made great strides on this front year to date, despite a challenging market backdrop and our strong existing contract book will allow us to be patient and more opportunistic moving forward.
The team is also focused on further optimizing our 2023 sales, but as needed to deliver the highest possible arbitrage for the remainder of the year.
Second we will be laser focused on achieving a consistent production profile in mind. The complex is fully staffed and all section equipment is installed and running although we're not pleased about the unexpected delays in ramping up to full rate production. We remain very excited about the revenue diversification.
This isn't meant low vol product well Brian .
Customer interest remains strong and we've had multiple successful test trials across a range of potential customers.
Finally, now that our balance sheet is that target debt levels, we're focused on returning value to our shareholders since going public in 2017, our capital allocation strategy has always prioritized the highest rate of return and the most advantageous use of our capital.
We continue to believe that share buybacks remain the most attractive and accretive form of shareholder returns and we intend to continue that strategy moving forward.
We believe that we have managed our capital allocation process, well and we remain dedicated to this active management approach.
Therefore, we will continue to evaluate our strategy on a go forward basis.
Through our allocation process, we have created equity value of well over $1 billion.
We have made debt repayments of more than 900 million since the beginning of 2018 and have returned nearly $350 million back to shareholders via share buybacks and dividends in just the past 12 months.
Let me finish by acknowledging the hard working employees across our organization that make these achievements possible.
Our balance sheet is and especially in our history, which paved the way for us to return capital to our shareholders. This is due to the consistency of our operations, which is only made possible through the hard work and dedication of our employees across the company.
The nature of what we do is not easy, but our employees show up and execute time after time.
I am extremely proud to lead this team and I. Thank all of our team members for their commitment to our core values with that I will hand, the call back over Tonight for further instructions. Thank you Jimmy we will now move to the Q&A session of our call at this time I'd like to ask our operator to please provide the instructions to our callers.
We will now begin the question and answer session.
To ask a question you May press Star then one on your telephone keypad.
If you are using a speakerphone please pick up your handset before pressing the keys.
To withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
The first question comes from Lucas pipes with B Riley Securities. Please go ahead.
Thank you very much operator, good morning, everyone.
Good good job on the quarter on the pricing and I I want to ask my first question on the pricing front.
How would you frame up the environment for sport.
Pricing both.
Both on the domestic and export markets, especially as you look out to 2024.
Where could you book tons today on a on a netback basis and as it relates to your contract book could you maybe maybe I missed it just update us on the average average price ideally are broken out by our export and domestic thank you very much.
Lucas.
This is Bob So you know as we mentioned on the call we did contract for $4 4 million tonnes.
Of that $3 6 million was in the export market.
Those tons are majority of those were index linked whether they be towards pet Coke API too and then we also had some.
Crossover volumes contracted as well, which is linked to high vol. B prices, but when you look at the where pricing is today you know those tons are probably in about the mid sixties back to the mine and that's based on pet Coke CFR, India pet Coke prices around 120 today.
Cal 'twenty for API two prices around 120, and then high vol. B prices you know close to 190, so youre looking at call it mid to upper sixties there as.
As far as domestic is concerned you did hear us talk about contracting 800000 tonnes in the domestic market through 2026.
And when we contract and bid on domestic business. You know, we're always looking at what power and gas prices are at the time and you know at that time, we were able to secure volumes in the mid sixties as well for that domestic volumes. So you.
You know gas is off a little bit since the time, we negotiated that deal, but I would tell you that the pricing that we're seeing for domestic business is off dollars singular not five or $10 from that number. So youre looking at again, you know everything with a six handle based on where it is today.
For next year I think that was kind of your question. So for next year, we now have $17 6 million tons as we mentioned.
Kind of give you a breakdown we have about $2 five linked to power.
Six six is export volume of which five two are tied to indices I can tell you that 100% of that volume tied to indices do have ceilings and floors associated so we don't have any API, two hedges or anything like that and then the balance are domestic and fixed than when we originally.
Modeled out 2024, we were assuming API two price of 105, and if you assume that our pricing is in the mid sixties on the volume we have contracted for 2024 at this time.
Okay.
Super helpful. Really appreciate that that color that was that was terrific.
Now I I wanted to ask kind of a longer term bigger picture question in terms of your growing exposure to the export market what is.
What is the.
Upper limit on the volume side.
Going export is it is it all be there today is it.
There's still additional tons.
It's 100% Cei X volumes at Baltimore for example would appreciate your color on that of where were.
What were your export balance yeah. So Lucas if you look at the first half of this year, our exports accounted for roughly $8 2 million tons, which as you know call it 63% of our total shipments.
We continue to find new homes and markets for that matter in fact, we actually shipped additional cargoes to new end users just this quarter or the second quarter into India, and China and also in Indonesia. So we do see growing markets. There we've talked about the growing cement capacity in India, we talked about.
The growing cement capacity in Egypt.
And we're also seeing more interest in our crossover product now that we have the lower sulfur coming from our Enlow Fork wall. So I honestly would tell you sitting here today I could see us exporting up to 18 million tons in the next couple of years strictly out of P. A M C.
We've proven that our terminal can do you know over 5 million tons in a quarter. So that would tell you that the terminal could do north of 20 million tons in and to be Frank with you. If we were shipping just 100% Bally through that terminal I think could be even more.
So we will continue to evaluate.
Evaluate.
Each and every year, what's going on in domestic market and we're not going to obviously abandon our core customers here in the domestic market I still personally think that coal fired generation is going to be here for quite some time. So you know, we'll we'll look at that mix is Jimmy mentioned on a call on his remarks, you know we're look we're looking for the highest.
Arbitrage.
And also we're looking for win wins with our domestic customers. So that's a long winded answer to say I think we could get a.
One 8 million tons of exports I think there's definitely demand out there for that but I wouldn't say I wouldn't say, we would be at the ceiling. We continue to look for new homes as Bobby said and we know we have the capacity now through the terminal with what we just did with those debottlenecking efforts and thing we did at the terminal. So we certainly will be looking for.
Any place that we can ship the goal with the best arbitrage as we can and I really don't know what the ceiling is but I do know that we will continue to grow that business, because that's where the growth is.
I really appreciate the color.
I'll turn it over for now keep up the good work.
Thanks, Ron.
Again, if you have a question. Please press Star then one the.
The next question is from Nathan Martin with the Benchmark Company. Please go ahead.
Thanks, operator, good morning, guys. Congrats on the quarter. Thanks for taking my questions frankly, just hit a lot of my my my bigger questions, but maybe.
Another strong quarter here, our realized price per ton driven by some additional contract optimization. It sounds like there's still more opportunity there in the back half based on your prepared remarks, so there should I assume youre still having those conversations with domestic utilities. Despite some of the recent warm weather we've had and then maybe how many additional.
Tongues had been pivotal to the export market. So far this year versus our original plan great to get your thoughts here.
Yeah. So you know in the first two quarters I would say about 3 million tons was kind of pivoted from domestic into export and thats, mainly because the domestic customers were slow in taking their their contracted volumes I really don't see that growing significantly in the second half of the year many of our customers are back.
And running their coal units as you mentioned you know there has been some recent heat.
So that certainly has helped especially in the southeast.
I will tell you that the majority of those shortfalls have already been worked out with customers to ensure that we capture the full value of their contracts and in some cases than some of the good news is you mentioned you were able to take these tons into the export market and that certainly allowed us to grow our presence in.
In the industrial space and in most cases, you know optimize the portfolio.
I think that it's important to look back on when you talk about the optimization that has been done if you looked at the original guidance that we provided.
You all in February of 2023, we're now off call it $3 at the midpoint and our current guidance, but at the same time. If you took those sensitivities that we provided for power and API too and you assumed all else is equal we would've been off nearly $8 at the midpoint. So again I think that again chose our flexibility.
And in our in our the fact that we're able to pivot quickly which is something many of our peers are unable to do.
That's very helpful. Bob and then maybe again kind of related to price Robinson strong performance in the first half for realized price.
We then need to average down here in the second half just to get you to the high end of your full year guidance range, which you guys did lower by $1. So.
Would be great to get your thoughts there.
Kind of driving that percentage decrease in the second world.
Yes, it's mainly API two prices I mean, that's that's 90% of it some of it is again some of our domestic customers that have contracts are lower than our midpoint of our guidance, taking additional volumes or theyre contracted full contracted volumes in the second half of the year, but again a lot of that is off so.
Today, if you see API two prices increase you know that certainly is going to help we assumed.
Our and our midpoint of our guidance call. It $110 API two price today I think prompt is closer to $1 15, So we'll see a little uplift there should that stay and continue to increase but again the volatility in the API two market you know it makes it really hard to really pinpoint a specific number today, but we will continue to.
Focus on on layering in additional volumes, if we can get some additional production that certainly would help as well, but that's really what's guiding the second half of the year down.
Yeah.
Got it makes sense. Thank you for that and then maybe finally you know you guys are clearly demonstrating our ability to increase your exposure to the export in the Mon power Gen markets and we've talked about that already here. So maybe it would be great to get your thoughts on the domestic mark market here in the intermediate.
Term and we're talking with your customers do you feel like electricity demand will be increasing over the next several years should that help support your coal that's the case and thoughts on regulations and potential regulations would be great as well.
Well when you look at the regulations of course, there's a lot of proposed regulations right now obviously outside agencies and including ourselves are commenting on those items. So no proposed at this time.
I like to talk about the fact that the customers that we've targeted.
Domestically at least none of those are announced retirements prior to 2028, so we feel pretty good about the customers were supplying here. Obviously, we do think electricity demand will increase in the next few years. If you look at some of the data that's out there it will say that but for US we want to go to those core customers that we've been with <unk>.
Most of it is 90% repeat business. So we think we'll continue to have that and dependent on demand winter shows up summer comes up it certainly increases and we have those customers that we like to ship to them. We think they will remain there for the foreseeable future.
I would just add that if you think about.
<unk> of our marketing strategy over the last several years I think we have much more.
We're much more diversified and brought our cold goals than we were a few years ago. So.
That allows us to pivot to the market that has the most strength in any given year, while maintaining a stable base so to speak whether it's domestic or export market.
I'll just add to that if you think about 2024, we already have between our our netback of our power netback contracts in our domestic and fixed price contracts 11 million tons contracted right. So when you when we continue to talk about our export you know our growing export business.
I'm not saying, we don't have much more export or domestic business that we're going to contract. Obviously, we look for the highest arbitrage, but we feel pretty good about where our book stands today in terms of domestic and even speaking with our customers. We are expecting some additional rfps to come out in the fall for 2024. So you know, we'll we'll likely secure some more volume there, but we feel very.
Good about where our contract book is today for 2024.
Thanks, Scott and Bob but kind of reminded me one other thing I wanted to ask just mentioned additional domestic car can use towards the back half of the year how about on the export side. How are you seeing things from our stockpile perspective, you know in Europe , there's been some talk previously.
Maybe on the first quarter call that maybe they could be back into the market ahead of the winter of 'twenty three 'twenty four any updates there.
Yeah, I mean, if you look at where inventory levels stand today. They are a you know versus the end of Q1. They are actually down a bit now you got to understand a lot of customers have liquidated some of their inventories and that's mainly due to high financing inventory cost. However, you know we believe in and as you mentioned, if Europe does experience a normal winter.
We will expect our European utilities to be back out in the market looking to restock and that should bode very well for API two prices as well.
Alright, I appreciate those comments I'll leave it there guys best of luck in the second half.
Thank you thanks, Jason Thank you Nick.
This concludes our question and answer session I would like to turn the conference back over to Nathan Tucker for any closing remarks.
Thank you operator wed like to thank everyone for their participation. This morning and for your support of Consol energy and we look forward to speaking with you on our next earnings call. Thank you.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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