Q2 2024 Hallador Energy Co Earnings Call
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Cole: Good afternoon. Thank you for attending today's Hallador Energy second quarter 2024 conference call. My name is Cole, and I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you'd like to queue for a question, you can do so by pressing star one on your telephone keypad. I'd now like to pass the call over to Sean Mansouri, the company's investor relations advisor with Elevate IR. Please go ahead.
Sean Mansouri: Thank you and good afternoon, everyone. We appreciate you joining us to discuss our second quarter 2024 results. With me today are President and CEO Brent Bilsland and CFO Marjorie Hargrave. This afternoon, we released our second quarter 2024 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 for 2024.
Sean Mansouri: Following prepared remarks, we will open the call to answer your questions. Before beginning, 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 expect.
Sean Mansouri: In providing these remarks, Hallador 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, we plan on filing our Form 10-2 later this year. And with the preliminaries out of the way, I'll turn the call over to President and CEO Brent Bilsland.
Brent Bilsland: At Hallador, we've been undergoing a strategic and deliberate transformation process to capture increased value from our products and services as the company advances up the value chain. To accomplish this, we have focused on expanding our offerings from fuel production to Wholesale Electricity Sales to ultimately power the industrial and commercial markets. The acquisition of our Marin Power Plant less than two years ago was the first step in this journey, enabling us the ability to transform our fuel into higher-value wholesale electricity.
Brent Bilsland: We took another step forward earlier when we signed a memorandum of understanding with Hoosier Energy and Winn-RENC, creating a pathway to further increase value and drive margin expansion by Enabling Sales of Wholesale Electricity to Industrial Users of Power. We have recently carried out a data center-focused request for proposal that has received a strong response. Our active negotiations on that RFP further strengthen our conviction that power is in critical demand and that we possess a crucial component to the success of these data, while we are encouraged by our progress with our counterparty. However, we caution that these negotiations are ongoing and take time given the potential magnitude for both our partners and our company.
Expansion.
Speaker Change: By enabling sales of wholesale electricity to industrial users of power.
Speaker Change: We have recently carried out a data center targeted request for proposal.
That has received a strong response.
Our active negotiations on that RFP further strengthened our conviction that.
The power is in critical demand and that we possess a crucial component to the success of these data centers.
While we are encouraged by our progress with our Counterparties. We caution that these negotiations are ongoing and take time given the potential magnitude.
For both our partners and our company.
Brent Bilsland: Nearly all of these proposed transactions would involve sales of large amounts of our energy and capacity. For well over a decade, the state of Indiana, where our power plant is located, has continued to solidify its position as a developing hub for high tech and high growth sectors. The Indiana Economic Development Corporation reports that plans for nearly $15 billion of new investments in Indiana's technological technology infrastructure have been announced by Fortune 500 businesses thus far in 2024, underscoring the growth potential in our marketplace.
Nearly all of these proposed transaction would involve sales of large amounts of our energy and capacity for well over a decade.
The state of Indiana, where our power plant is located continues to solidify its position as the developing hub for high tech and high growth sectors.
Speaker Change: The Indiana Economic Development Corporation reports that plans for nearly $15 billion of new investments in Indiana's technological technology infrastructure have been announced by Fortune 500 businesses. Thus far in 2024 underscoring the growth potential in our Mark.
Speaker Change: It plays.
Brent Bilsland: Businesses need power to enable them to build in Indiana, and Hallador is one of the few companies that has it. We believe we are entering a unique time of electricity scarcity. We've heard multiple reports from across the country where utilities have told industrial customers they cannot timely provide the power needed to support their growth. We have seen numerous companies reference the lack of available power as restricting their company plans. Last week, the result of the PJM capacity auction, a neighboring market to the MISO system where we operate, had certain zones where capacity prices traded up to the legal limit, as much as nine times more than the previous year.
Speaker Change: Businesses need power to enable them to build in Indiana, and how it or as one of the few companies that has.
Speaker Change: We believe we are entering a unique time of electricity scarcity.
Brent Bilsland: This result supports our belief that the value of dispatchable generation, like our MIRM plan, continues to increase. Energy scarcity is leading to higher long-term power prices, as evidenced by significantly higher energy prices starting in 2026 as contracted by Hallador and forecasted by the forward energy curve. I would also like to point to a recent Wall Street Journal article reporting that heavy industrial users of power, such as aluminum smelters, are struggling to compete for electricity with higher-value users of energy, such as data. In the year 2000, there were 23 aluminum smelters located in the United States. Today, there are only four.
Brent Bilsland: During the quarter, we added $45 million in forward energy sales, bringing our forward capacity and energy sales book to $664 million as of June 30. When combined with our forward fuel sales, our total forward sales book at June 30th totaled approximately $1.4 billion.
Brent Bilsland: Unfortunately, the recent environment for spot electricity sales has been challenged. This past winter, record high U.S. natural gas production ran into the ninth warmest winter on record, according to NOAA. The lack of winter heating demand contributed to gas inventory levels climbing as much as 38% above the five-year average, as gas prices declined. Wholesale electricity prices also declined, and in the first six months of 2024, approximately 90% of the off-peak energy hours at the Merrim Hub and approximately 60% of the total energy hours at the Merrim Hub were priced below our production costs at our Merrim facility.
Brent Bilsland: Our goal is for Hallador Power to generate approximately 1.5 million megawatt hours on a quarterly basis, which equates to approximately 6 million megawatt hours. During the first half of 2024, Hallador Power generated approximately 1.6 million megawatt hours during the first half of the year. We experienced sales prices of nearly $261 per megawatt hour for a limited time, balanced against most days, prices below our variable cost to produce. These fluctuations led to an inconsistent dispatch schedule.
Brent Bilsland: We also performed 70 days of scheduled outages on half the plant during the first half of this year. We believe the environment will be better in the last half of this year to see higher dispatch rates as we have no scheduled outages planned for the plant for the balance of this year. Additionally, our plant already ran 437,000 megawatt hours for the month of July. Gas inventory levels have also improved, from 38% above the five-year average in March to 16% above the five-year average at the end of July.
Brent Bilsland: For the first half of 2024, lower energy prices negatively affected both Hallador Power Company's generation model and the dispatch rates of Sunrise Coal's utility. In response to dispatching less, those customers slowed coal shipments from Sunrise during the first half of this year, to Matt Sunrise's production levels and cost structure to that of market demand. We restructured Sunrise's operations in the first quarter of 2024. As we have previously noted, the restructuring included a reduction in force of approximately 110 people in February. We have since allowed attrition to further reduce our workforce by approximately 130 additional people, a total workforce reduction of more than 25%, as of June 30.
Brent Bilsland: We also restructured our operation to focus on our more profitable units and to eliminate units with higher production costs. Transitioning our Oaktown mining facilities from seven units of production to four units of production was a deliberate process that took considerable time and effort and was completed in mid-July. We are encouraged by the early results of Sunrise's restructuring and have seen improvement in mining costs since we made the decision to adjust our operation.
Brent Bilsland: Our clean tons per foot of advancement, a key efficiency metric we utilize, improved from January to June by 27 percent. And our June cash costs at Oaktown were approximately $44 a ton, while our cash costs for the quarter were approximately $0.50. We expect to continue driving improvements in cash costs in the second half of the year, as we have already implemented further operational improvements in the month of July. It's worth noting that you will not find these cash cost numbers in our upcoming 10-Q filing, as we have revised the presentation of our financials to conform with GAAP.
Brent Bilsland: Overall, we're enthusiastic about Hallador's prospect for significant growth and value creation. The improving energy market landscape provides a solid foundation to return to growth as we exit 2024, and we believe the surge in demand to power data centers and other industrial users provides a real opportunity to transform our financial profile over the long run. I will now hand the call over to Marjorie Hargrave before opening Q&A and returning for closing remarks.
Speaker Change: Susie ASIC about <unk> prospects for significant growth and value creation.
Speaker Change: The improving energy market landscape provides a solid foundation to return to growth.
Speaker Change: As we exit 2024, and we believe the surge in demand to power data centers and other industrial users provides a real opportunity to transform our financial profile over the long run.
Speaker Change: I will now hand, the call over to Marty hard grade before opening Q&A and returning for closing remarks.
Marjorie Hargrave: Thank you very much, Brent, and good afternoon everyone. Turning to our second quarter financials, electric sales for the quarter were 56.8 million compared to 71 million in the prior year period. The decline was primarily due to an abundant natural gas supply leading to low energy prices. This, coupled with the mild winter and scheduled maintenance, resulted in our dispatch rates being decreased. Coal sales were $32.8 million for the quarter, compared to $88.6 million in the prior year period.
Thank you very much Brent and good afternoon, everyone turning to our second quarter financial electric sales for the quarter were $56 8 million compared to 71 million in the prior year period.
Speaker Change: Klein was primarily due to an abundant natural gas supply leading to low energy prices.
Speaker Change: This coupled with.
Speaker Change: The mild winter and scheduled maintenance resulted in our dispatch rates being decreased.
Speaker Change: Coal sales were $32 8 million for the quarter compared to $88 6 million in the prior year period. This decline was driven by our decision to reduce our coal production as previously discussed in our restructuring of our Sunrise coal Division.
Marjorie Hargrave: This decline was driven by our decision to reduce our coal production, as previously discussed in our restructuring of our Sunrise Coal Division. Additionally, a slowdown in customer deliveries coincided with a decrease in cold plant output throughout the quarter.
Speaker Change: Additionally, a slowdown in customer deliveries coincided with a decrease in coal plant output throughout the quarter.
Marjorie Hargrave: These two segments drove revenue of $90.9 million for the quarter compared to $161.2 million in the prior year period. The net loss for the quarter was $10.2 million compared to a positive net income of $16.9 million in the prior year period. This was largely driven by a loss in coal operations of $13.33 per ton due to a reduction in contract average sales price and reduced demand given the oversupply of lower priced natural gas and reduced dispatch rates at our customers' coal-fired power. We improved operating cash flow to $23.5 million for the quarter compared to $18.1 million in the prior year period. Adjusted EBITDA, a non-GAAP measure which is reconciled in our earnings press release issued earlier today, was negative $5.6 million for Q2 compared to $35.3 million in the prior year period.
Speaker Change: These two segments drove revenue of $90 9 million for the quarter compared to $161 2 million in the prior year period.
Speaker Change: Net loss for the quarter was $10 2 million compared to positive net income of $16 9 million in the prior year period. This was largely driven by a loss in coal operations of $13 33 per ton due to a reduction in contract average sales price.
Speaker Change: And where does demand given the oversupply of low price of lower priced natural gas.
Speaker Change: And reduced dispatch rates at our customers coal fired power plant.
Speaker Change: We improved operating cash flow to $23 5 million for the quarter compared to $18 1 million in the prior year period.
Speaker Change: Adjusted EBITDA, a non-GAAP measure, which is reconciled in our earnings press release issued earlier today was negative $5 6 million for Q2 compared to $35 3 million in the prior year period.
Marjorie Hargrave: We invested $13.1 million in capital expenditures during the second quarter, bringing total year-to-day CapEx to $28 million. This puts us well on target for a planned capital outlay of $43 million for calendar year 2024. In response to the current environment, we focused on strengthening our balance sheet. During the second quarter, we decreased our bank debt by $31.5 million. This decrease in bank debt contributed to our 41% decrease in total debt from $141 million as of December 31, 2023, to $83 million as of June 30, 2024.
Speaker Change: We invested $13 1 million in capital expenditures during the second quarter, bringing total year to date capex to $28 million.
Speaker Change: This puts us well on target for planned capital outlay of $43 million for calendar year 2024.
Speaker Change: In response to the current environment, we focused on strengthening our balance sheet.
Speaker Change: During the second quarter, we decreased our bank debt by 31 5 million. This decrease in bank debt contributed to our 41% decrease in total debt from 141 million as of December 31, 2000, $23 million to $83 million as of June 30th $20.
Speaker Change: 24.
Speaker Change: We also repaid $5 million of unsecured one year, one year notes from related party affiliated with our board of directors that were issued during the first quarter of 'twenty 'twenty four.
Speaker Change: Utilizing our ATM offering we raised $27 9 million by issuing $3 9 million shares of our common stock during the quarter.
Speaker Change: We also successfully converted our remaining $11 million of senior unsecured convertible notes, including accrued interest was $2 1 million shares of our company's common stock taken.
Marjorie Hargrave: We also repaid $5 million of unsecured one-year notes from related parties affiliated with our Board of Directors that were issued during the first quarter of 2024. Additionally, utilizing our ATM offering, we raised $27.9 million by issuing 3.9 million shares of our common stock during the quarter. We also successfully converted our remaining $11 million of senior unsecured convertible notes, including accrued interest, into 2.1 million shares of our company's common stock. Taken together, as of June 30, 2024, our bank debt was $45.5 million.
Speaker Change: Taken together as of June 32024, our bank debt was $45 5 million total liquidity improved to $67 million and our leverage ratio was 212 times. These.
Marjorie Hargrave: Total liquidity improved to $60.7 million, and our leverage ratio was 2.12 times. These improvements were supported by a $43 million prepayment for an 11-month forward energy sale representing approximately 22% of our annual $6 million megawatt hour goal during the term of the contract. Through these strategic actions to bolster our balance sheet, we have established a solid foundation to carry us through the challenges of the near-term environment and position Hallador for significant growth and margin expansion in the years ahead. That concludes our prepared remarks. We will now open up the call for any questions. Thank you.
Speaker Change: These improvements were supported by a $43 million prepayment for an 11 month forward energy sale, representing approximately 22% of our annual $6 million megawatt hour gold during the term of the contract.
Speaker Change: These strategic initial actions to bolster our balance sheet, we have established a solid foundation to carry us through the challenges of the near term environment and position <unk> for significant growth and margin expansion in the years ahead.
Speaker Change: That concludes our prepared remarks, we will now open up the call for any questions. Thank you.
Operator: If you'd like to queue for a question, you can do so by pressing star one on your telephone keypad. If, for any reason, you'd like to remove your question, please press star two. Again, to join the question queue, please press star one. Our first question is from Lucas Pipes with D. Reilly. Your line is now open. Thank you very much, operator, and good afternoon, everyone.
Speaker Change: If you'd like to queue for a question you can do so by pressing star one on your telephone keypad.
Speaker Change: Any reason you'd like to remove your question. Please press star two.
Speaker Change: Again to join the question queue. Please press star one.
Speaker Change: Our first question is from Lucas pipes with B Riley. Your line is now open.
Speaker Change: Thank you very much operator, and good afternoon, everyone.
Lucas Pipes: Brent, my first question is on the bilateral power agreements with data centers that you mentioned. I wonder if you could maybe speak a little bit about the type of organizations that have shown interest. How mature are they? What's their size?
Brian: Brian My first question is on bilateral power agreements with data centers that you mentioned.
Lucas Pipes: And also, kind of what do you screen for from potential customers? You're looking for the best price. Are you looking for a specific credit profile? I would appreciate your thoughts on that. Thank you.
Speaker Change: I Wonder if you could maybe speak a little bit to that.
Speaker Change: Type of organizations.
Speaker Change: That have shown interest how mature are they.
Speaker Change: What's the what's the size.
Speaker Change: And also kind of what what are you screen for.
Brian: From from those potential customers.
Speaker Change: You're looking for the best price or are you looking for a specific credit profile I would appreciate your thoughts on that thank you.
Brent Bilsland: Yeah, a great question. So.
Speaker Change: Yeah.
Speaker Change: Great question.
Speaker Change: So.
Brent Bilsland: You know, we're talking to several different partners who are potential customers. They can range from investor-owned utilities to cooperative, co-hosting, and data center developers.
Speaker Change: We're talking to several different partners.
Speaker Change: Our potential customers.
Speaker Change: They can range from investor owned utilities.
Speaker Change: Cooperatives.
Speaker Change: Co hosting.
Speaker Change:
Speaker Change: Data center developers.
Brent Bilsland: So this is the type of counterparty that we're looking at. You know, as we said in the prepared remarks, that we anticipate. Look, all these counterparties are trying to figure out how to build data centers as fast as possible. So they are looking at a major capital investment, and they need power for a long period of time, right? They don't want to build these things and then find they can't get power in the second or third year.
Speaker Change: So those are the type of.
Speaker Change: Of Counterparties that were looking at.
Speaker Change: As we said in the prepared remarks.
Speaker Change: That we anticipate.
Speaker Change: Look all of these counterparties are trying to figure out.
Speaker Change: How to build data centers as fast as they can and.
Speaker Change: So they.
Speaker Change: We're looking at.
Speaker Change: Amasia capital investment.
Speaker Change: And they need power.
Speaker Change: For a long period of time right. They don't want to build these things and then finally I cant get power in the second or third year.
Brent Bilsland: So, as we said in a prepared remark, we think that this will be a sale of the majority of our energy and capacity for a period of time that exceeds a decade in length. So that kind of gives you the scale of this will be if we're successful. This will be a major, major transaction transformational for the company. These deals aren't done, right? And they take a long time to negotiate because there are big dollars and, you know, a construction project typically on the other side of it.
Speaker Change: So as we said in our prepared remarks, we think that this will be a sale of the majority of our energy and capacity.
Speaker Change: And.
Speaker Change: For a period of time that.
Speaker Change: Exceeds a decade and linked.
Speaker Change: So that kind of gives you the scale of this will be.
Speaker Change: If we're successful.
Speaker Change: This will be a major.
Speaker Change: A major transaction and transformed <unk> to the company.
Speaker Change: These deals arent done right and they take a long time to negotiate.
Speaker Change: Because there's big dollars in.
Speaker Change: Our construction project typically on the on the other side of it.
Brent Bilsland: So what are we looking for? We're looking for a counterparty that has very good credit, right? We want to know that they're going to be there at the end of this contract, not just at the beginning. And so price, likelihood of can we actually transact with the counterparty, and Willer Credit, you know, will survive the test of time. Those are probably the three biggest attributes that we're taking into consideration. Thank you, Brent. And
Speaker Change: So what are we looking for we're looking for a counterparty that has.
Speaker Change: Very good credit right, we want to know that theyre going to be there at the end of this contract not just at the beginning.
Speaker Change: So price.
Ken: Likelihood of Ken we actually transact with the counterparty.
Ken: Well their credit.
Speaker Change: Survive the test of time those are probably the three.
Ken: Biggest attributes that we're taking into consideration.
Lucas Pipes: Thank you, Brent. And you mentioned that these things can take a while, any color in terms of how long it could take from here? I know you just mentioned there's a lot of wood to chop, but any perspective you could add on that would be appreciated.
Speaker Change: Thank you Brent and you mentioned that these things can can take a while.
Speaker Change: Any.
Speaker Change: Any color in terms of.
Speaker Change: How long it could take from here I know you just mentioned there is a lot of wood to chop, but any perspective, you could add that would.
Speaker Change: I appreciate it thank you.
Speaker Change: Well.
Brent Bilsland: That's a great question, too. And, you know, we only control one side of the negotiation, and oftentimes, in the negotiation, you have you have three parties, right? You have us, the wholesale power, hopefully the wholesaler of power and capacity, you have someone that, like, like, a Hoosier that has the right to sell industrial power that we have an MOU to potentially sell through, and then you have the end user. And so because there are three different groups typically involved in the transaction, the crystal ball at how long this all takes is a little more opaque.
Speaker Change: That's a great question too.
Speaker Change: And we only control one side of the negotiation and oftentimes.
Speaker Change: In the negotiation you have you have three parties right.
Speaker Change: You have ourselves the wholesale power hope the wholesaler of power capacity.
Speaker Change: You have.
Speaker Change: Someone that.
Speaker Change: Like a hoosier.
Speaker Change: <unk> has the right to sell industrial.
Speaker Change: Power that we have an mou to potentially sell through.
Speaker Change: And then you have the end user and so.
Speaker Change: Because there are.
Speaker Change: Three different groups typically to the transaction.
Speaker Change: Our crystal ball on how long this all takes.
Speaker Change: As a little more.
Speaker Change: Oh page.
Speaker Change: So.
Lucas Pipes: So you know, what does it feel like? It feels like, you know, I don't know, somewhere near the end of the year or Q1 of next year. That's what it feels like. But, you know, we will just have to stay tuned.
Speaker Change: What does it feel like it.
Speaker Change: It feels like.
Speaker Change: I don't know somewhere near the end of the year or Q1 of next year, that's what it feels like but we.
Speaker Change: We'll just have to stay tuned.
Brent Bilsland: Brent, I appreciate that; it's really helpful. Thank you for taking a stab.
Speaker Change: And I appreciate that.
Speaker Change: Really helpful. Thank you for.
Lucas Pipes: I appreciate this uncertainty in different parties. One, one other question from me just in terms of kind of looking out to the second half of 2024 in the context of the first half performance. Obviously, power pricing has been softer. I thought you mentioned 1.6 million megawatt hours sold in the first half. But for the second half, where do you think that number should shake out? You mentioned it was somewhat higher, I think July utilization rates, but gas prices are super weak. If you had to point to a specific example, if you had to point to a range for a generation, I would appreciate your thoughts on that.
Speaker Change: Taking a stab.
Speaker Change: This uncertainty of different parties.
Speaker Change: One other question from me just just in terms of kind of.
Speaker Change: Looking out to the second half of 2024 in the context of the.
Speaker Change: Our first half performance.
Speaker Change: Obviously power pricing has been softer I thought you mentioned $1 6 million megawatt hours sold than in the first half.
Speaker Change: But.
Speaker Change: For the second half.
Speaker Change: Or do you think that number should shake out.
Speaker Change: You mentioned somewhat higher I think July utilization rates, but gas prices are.
Speaker Change: Super weak.
Speaker Change: If you have too.
Speaker Change: Two specific if you had to point to a range.
Speaker Change:
Speaker Change: Co generation.
Speaker Change: I would appreciate your thoughts on that thank you.
Speaker Change: Well.
Brent Bilsland: Look, the market has improved from the standpoint of You know, in March, we had gas inventory levels that were 38% above the five-year average. That's just a laggard amount of gas that was sent around and storage. And so the market, you know, gas prices down, uh, you know we believe in incentivizing it's huge, right? And so what's happening is you have higher heat rate plants, Dispatching, and Chronicle, we have such just incredibly cheap gas. You know, people tend to look at them.
Speaker Change: Hello.
Speaker Change: The market has improved from the standpoint of.
Speaker Change: In March we had gas inventory levels that were 38% above the five year average that's just staggering.
Speaker Change: Amount of gas that was set around.
Speaker Change: And storage and so the market gas price down.
Speaker Change: We believe to incentivize.
Speaker Change: Its use right and so whats happening is you have higher heat rate plants.
Speaker Change: Dispatching in front of coal plants.
Speaker Change: We have such incredibly cheap gas.
Speaker Change: People tend to look at.
Brent Bilsland: Henry Hubb and the IMAX pricing, but really, Chicago City Gate is probably a better indicator for us, and it's been a discount even to those in those markets. So a lot of sub-2 gas in the first half of the year. So the inventory levels have improved, right? So at the end of July here, I think the 26th was the last report, inventory levels had come down, you know, by 22% to 16%. Inventory levels were 16% above the five-year average. So we still have a lot of gas, but we're in a much better position than we were at the beginning of the year. The other thing is this:
Speaker Change: Henry hub, Nymex pricing, but really Chicago City gate is probably a better indicator for us.
Speaker Change: And it's just been a discount even to those to those markets.
Speaker Change: So a lot of sub $2 gas.
Speaker Change: In the first half of the year.
Speaker Change: So the inventory levels have improved right. So at the end of July here I think the 2000 <unk> report.
Speaker Change: Inventory levels have come down.
Speaker Change: By 22% to <unk>.
Speaker Change: 16%.
Speaker Change: Inventory levels were 16% above the five year average.
Speaker Change: So we still have a lot of gas, but we're a lot better position than we were at the beginning of the year Dara. Thank you Sir.
Brent Bilsland: We're in the summer months, right? So we have we had good heating demand in July, we should have decent heating demand demand in December, know, it's hard to say what the balance of the year will bring. We should see cooling demand again and you know, sometime between, you know, around Thanksgiving. So when we look at the period of time we have left.
Speaker Change: We're in the summer months right. So we have we had good heating demand in July we should have decent heating demand demand in December.
Speaker Change: It's hard to say what the balance of the year will bring we shouldnt see cooling demand again.
Speaker Change: Sometime between around Thanksgiving.
Speaker Change: So when we look at the period of time, we have left.
Brent Bilsland: We don't have any scheduled outages. Whereas, in the first half of the year, half of our plant was offline for 70 days. Now, part of that was one unit, part of that was the second unit, so it wasn't like it was just one unit. But when you combine those,
Speaker Change: We don't have any scheduled outages, whereas in the first half of the year.
Speaker Change: Half of our plant was offline for 70 days now part of that was one unit part of that was the second unit. So it wasn't like it was.
Speaker Change: One unit.
Speaker Change: But when you combine those.
Brent Bilsland: There were 70 days, and we only had half the plant available to us. There were no scheduled outages in the back half of the year. So if market prices call for that plant to run, it will run. We did 1.6 million megawatt hours, roughly, in the first half of the year. We've already, you know, exceeded 25% of that in July alone. The market will be better. We should run more. And, you know, if you look at the price of gas when you get to December, it's above $3.
Speaker Change: For 70 days, we only have half the plant available to us.
Speaker Change: No scheduled outages in the back half of the year, So if market prices call for that plant to run.
Speaker Change: It will run.
Speaker Change: We did $1 6 million megawatt hours roughly and.
Speaker Change: In the first half of the year we've already.
Speaker Change: Exceeded.
Speaker Change: 25% of that.
Speaker Change: In July alone so.
Speaker Change: Market will be better.
Speaker Change: We should run more.
Speaker Change: And if you look at the price of gas when you get to December.
Brent Bilsland: So at those prices, not only do we dispatch more, but we should start to see higher gross margins when we run the plant, right? So more widgets, greater margin. And that's what we say when we think that, you know, we'll finish the year strong and start to return to much more profitable times that we've seen in the first half. Thank you very much, Brent.
Speaker Change: It's above $3.
Speaker Change: So at those prices not only do we dispatch more we should start to see higher margins higher gross margins when.
Speaker Change: When we run the plant right, so more widgets greater margins.
Speaker Change: And that's what we say when we think that we will see.
Speaker Change: Finished the year strong.
Speaker Change: Sorry.
Speaker Change: Turn to much more profitable times that we've seen in.
Speaker Change: In the first half of the year.
Lucas Pipes: Thank you very much, Brent. I really appreciate it all. I'll turn it over for now.
Speaker Change: Thank you very much Brent I I really appreciate it I'll turn it over for now continued best of luck.
Operator: Continue. Best of luck. Thank you. As an additional reminder, it is star number one to join the question queue. There are no additional questions at this time, so I'll pass the call back to the management team for any closing remarks.
Speaker Change: Thank you.
Speaker Change: Okay.
Speaker Change: As an additional reminder to star one to join the question queue.
Speaker Change: There are no additional questions at this time, so I'll pass the call back to the management team for any closing remarks.
Brent Bilsland: Yeah, I want to thank everyone for taking the time today to tune into our earnings call. I want to thank our management team. Thank you, everyone, for their interest in Hallador. Thank you.
Speaker Change: Yes, I want to thank everyone for taking the time today to.
Brent Bilsland: Tuned into our earnings call I want to thank our management team.
Speaker Change: And.
Brent Bilsland: Thank you everyone for their interest in <unk>. Thank you.
Cole: That concludes today's call. Thank you all for your participation. You may now disconnect your line.
Speaker Change: That concludes today's call. Thank you all for your participation you may now disconnect your line.