Hallador Energy Q2 2026 Earnings Call Transcript

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Provided by Quartr
August 10, 2026

Key Takeaways

  • Positive Sentiment: Turtle Creek Gas project progress improved: Hallador expects total costs below $800 million, or roughly $1,700 per kW, with commercial operations targeted for the second half of 2028. Equipment is reportedly in good condition, shipment remains scheduled for September, and the MISO interconnection study is expected in mid-August.
  • Positive Sentiment: Hallador’s forward contracted revenue expanded substantially, with approximately $2.4 billion of segment-level commitments extending through 2040, including new long-term capacity agreements. Management also expects to sell additional Merom capacity and potentially energy before year-end.
  • Negative Sentiment: Second-quarter results were pressured by Merom’s scheduled outage, unplanned downtime during high-price periods, elevated purchased-power costs, and working-capital investment. Net loss was $15.2 million versus net income of $8.2 million a year earlier, while adjusted EBITDA was negative $2.9 million.
  • Neutral Sentiment: Liquidity declined to $84.2 million at quarter-end, including $29 million of cash, while bank debt increased to $45 million after the company drew on its delayed-draw term loan. Hallador is evaluating equipment financing, project-level debt, and other structures for Turtle Creek with the goal of minimizing or avoiding equity dilution.
AI Generated. May Contain Errors.
Earnings Conference Call
Hallador Energy Q2 2026
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Operator

Afternoon. Thank you for attending Hallador Energy's second quarter 2026 earnings conference call. At this time, all participants are in listen only mode. Following our prepared remarks, there will be a question and answer session, and instructions will follow at that time. As a reminder, this call is being recorded. I'd like to turn the call over to Sean Mansouri, the company's investor relations advisor with Elevate IR. Please go ahead, Sean.

Sean Mansouri
Investor Relations Advisor at Elevate IR

Thank you, and good afternoon, everyone. We appreciate you joining us to discuss our second quarter 2026 results. With me today are Chairman and CEO, Brent Bilsland, and CFO, Todd Telesz. This afternoon, we released our second quarter 2026 financial and operating results in a press release that is now on the Hallador investor relations website. Today, we will discuss those results, as well as our perspective on current market conditions and our outlook. Following prepared remarks, we will open the call to answer your questions. Before we begin, a reminder that some of our remarks today may include forward-looking statements subject to a variety of risks, uncertainties, and assumptions contained in our filings from time to time with the SEC, and are also reflected in today's press release.

Sean Mansouri
Investor Relations Advisor at Elevate IR

While these forward-looking statements are based on information currently available to us, if one or more of these risks or uncertainties materialize, or if our underlying assumptions prove incorrect, actual results may vary materially from those we projected or expected. In providing these remarks, Hallador has no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law to do so. With the preliminaries out of the way, I'll turn the call over to Chairman and CEO, Brent Bilsland.

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

Thank you, Sean, and thank you everyone for joining us this afternoon. We are now halfway through 2026, and I would describe our year so far as two stories running side-by-side. The first is operational. We spent the second quarter putting money and downtime into Merom. Most of it planned, some of it not, and the results show it. The second story, and in our view, by far the more important one, is the continued transformation of the company into a multi-fuel independent power producer. I want to start there because we have made real progress on our natural gas generation project at Merom. We have now formally named that project Turtle Creek Gas, or Turtle Creek for short. Turtle Creek is a proposed 460 MW simple cycle natural gas-fired plant project that would meaningfully expand and diversify our dispatchable generation platform.

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

Let me walk you through where things stand. First, the equipment. I, along with other members of our management team, recently inspected the turbine equipment and disassembly process with the owner's engineer and personnel from Siemens. We were pleased with what we saw. The equipment is in good condition, and disassembly and packing are well underway with a substantial Siemens workforce on-site. We continue to expect shipment of the equipment in September. Second, the interconnection. Turtle Creek's interconnection application entered MISO's Expedited Resource Addition Study, known as ERAS, on June 2nd. We expect to receive the results of that process, including the required system upgrade costs in mid-August, and indications to date from the study have been constructive. Following our review, we are targeting a final investment decision and execution of a generator interconnection agreement in September. Third, project economics and financing.

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

In our experience, project budgets tend to move in one direction as scopes firm up, higher. Ours has moved the other way. As the equipment restoration and construction scopes have become better defined, we now expect total project cost to be below $800 million, or in the $1,700 per kW range. We have moved our targeted commercial operations timeframe forward to the second half of 2028. In construction, low cost and fast rarely travel together. We believe Turtle Creek offers a credible pathway to both. One of the lowest capital cost peaking plants currently being developed on a timeline years ahead of many comparable projects. In parallel, we are finalizing the construction scope and advancing financing discussions as we evaluate the appropriate capital structure with the objective of financing the project with little to no equity dilution.

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

Interconnection, construction, and financing are the principal remaining steps to get us there. None of this progress is an accident. It is the product of the same patient, step-by-step approach that has carried our transformation from the beginning. Six years ago, we were an underground coal mining company. We acquired a one-gigawatt interconnection, then the plant that utilizes it. We began marketing its long-term output. This year, our patience paid off in two landmark capacity agreements. First, the three-year agreement we executed in March with an investment-grade counterparty at approximately 2x our historical contracted capacity pricing. And second, the 12-year agreement behind it, that together total approximately $1.1 billion of contracted revenue. These agreements increased our forward sales position, which now sits at $2.4 billion, placing Hallador in a substantially sold forward position on accredited capacity for approximately the next 14 consecutive years, with commitments extending through 2040.

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

Turtle Creek is the next step in that transformation, and it is advancing on schedule. I also want to remind everyone how we think about this market because it explains how we have built our contract book. In our view, capacity and energy run on different clocks. For large load customers, particularly data centers, access to accredited capacity is the gating factor. Without it, projects cannot move forward. That is why capacity markets have tightened and repriced ahead of the physical around-the-clock energy demand these developments will ultimately bring. As these projects are built and begin drawing power from the grid, we believe energy demand will accelerate and energy pricing will follow. We have constructed our portfolio to participate in both phases. Our long-dated commitments are anchored in accredited capacity, where repricing has already arrived and where we have contracted through 2040.

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

Our energy commitments by design are shorter-dated beyond the next few years. Our energy position is largely open, preserved for the repricing we believe is beginning now. As it arrives, we intend to monetize that open position with the same discipline and patience we brought to capacity. A 460 MW peaking asset at Turtle Creek would give us even more dispatchable capacity and energy to bring to the market. At the same time, the market keeps confirming our thesis. We are seeing robust demand for accredited capacity and energy from a growing and increasingly diverse set of counterparties, and are working towards making additional forward sales before the end of the year. With $2.4 billion of revenue already contracted at the segment level and more sales on the way, we believe Hallador offers investors a degree of revenue visibility that is among the strongest in the sector.

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

We are speaking with meaningfully more counterparties today than we were in the past, and the demand signals are increasingly visible right outside our windows. A large data center project has broken ground adjacent to our property, and another project is in the early stages of development on the other side of the plant. You do not need a consultant's report to see where power demand in our region is headed. You can see it from the parking lot. Now, turning to the second quarter. Operationally, the second quarter is traditionally our lightest period of the year as we take one of Merom's two units offline each spring for an approximately 60-day scheduled maintenance outage. This year's outage at unit one, we completed major reliability upgrades designed to address the unplanned downtime the unit had experienced in recent quarters. Unit two performed well over the course of the quarter.

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

However, the limited unplanned downtime it did experience coincided with periods of elevated market prices, which magnified the financial impact by requiring us to purchase power at high prices to meet our delivery obligation. Together, these factors weighed on our second quarter results, but do not, in our view, reflect the earnings power of the plant. With the scheduled outage behind us and the reliability investments in place, we believe Merom is positioned to run more reliably going forward, and we expect generation volumes to improve sequentially in the third quarter. I want to be clear about what the planned maintenance expenditures will bring. We invested substantially in the plant during the outage, and the condition of the plant is better for it. We expect that improved conditions to show up where it counts, in reliability, availability, and operating performance over time.

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

Money spent keeping a productive asset sound is not money lost. It earns us a return every hour the plant runs when the grid needs it most. Reliability at Merom matters more than ever, both because MISO increasingly depends on dispatchable resources during peak demand and because Merom sits at the center of our vertically integrated platform. When the plant runs efficiently, it supports electric sales, creates consistent internal demand for coal, improves mine productivity at Sunrise, and enhances operating efficiency across the business. When performance at Merom falls below planned levels, those effects extend throughout the platform. With the outage behind us and both units running more effectively, we expect generation volumes to improve sequentially in the third quarter. I would note that power pricing remains uncertain, and the third quarter of last year benefited from particularly favorable power market conditions, creating a more challenging year-over-year comparison.

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

We are focused on sequential operational improvement and on carrying that improved availability into the balance of the year and beyond. In summary, quarters like this one are the price of owning and improving a durable asset. Q2 reflected the important reliability and efficiency work we completed at Merom, along with the temporary challenges that came from it. The more important story is the progress we are making on selling out the remainder of Merom's capacity and energy, the advancement of our Turtle Creek Gas project, its improving economics, and the accelerating demand we are seeing from an expanding set of counterparties. The fundamental signals across our market remain constructive, and we believe Hallador is well positioned to compound shareholder value over a multi-year horizon. With that, I'll turn the call over to Todd to take you through our financial results.

Todd Telesz
Todd Telesz
CFO at Hallador Energy

Thank you, Brent, and good afternoon, everyone. Jumping into our second quarter results. Electric sales for the second quarter were $59.5 million compared to $60 million in the prior year period. While third-party coal sales increased to $40.6 million compared to $38.1 million in the prior year period. Electric sales in the second quarter benefited from higher accredited capacity revenue, which increased 17% year-over-year to $18.6 million. Total energy sales volume increased 17% compared to the prior year period, while the average price per megawatt hour for delivered energy declined to $41.69 from $52.66. The increase in third-party coal sales during the second quarter was driven primarily by improved pricing as a 9% increase in our average third-party price per ton more than offset a 2% decrease in tons sold to third parties.

Todd Telesz
Todd Telesz
CFO at Hallador Energy

Sunrise also sold 59,000 incremental tons to Merom during the quarter as the plant prepared for summer demand. On a consolidated basis, total operating revenue decreased to $101.5 million for the second quarter of 2026, compared to $102.8 million in the prior year period. Net loss for Q2 2026 was $15.2 million, compared to net income of $8.2 million in the prior year period. Cash flow used in operations in the second quarter of 2026 was $23.9 million, compared to cash flow provided from operations of $11.4 million in the prior year period. With the decrease primarily reflecting the outage-related decline in profitability, higher purchase power costs and working capital investment, including cash invested in inventory and parts and supplies.

Todd Telesz
Todd Telesz
CFO at Hallador Energy

Adjusted EBITDA, a non-GAAP measure that is reconciled in our earnings press release issued earlier today, was -$2.9 million for Q2 2026, compared to $3.4 million in the prior year period. We invested $26.3 million in capital expenditures during the second quarter of 2026 compared to $13.1 million in the year-ago period, primarily reflecting the reliability upgrades completed during the plant outage at Merom, as well as development spending associated with Turtle Creek. With the planned outage complete, we expect the pace of maintenance capital spending to moderate through the balance of the year. With full year 2026 capital expenditures expected to remain consistent with 2025 levels, excluding investments related to Turtle Creek. As of June 30th, 2026, our forward energy and capacity sales position was approximately $1.6 billion, compared to $571.2 million at March 31st, 2026, and $619.7 million at June 30th, 2025.

Todd Telesz
Todd Telesz
CFO at Hallador Energy

When combined with our third-party forward coal sales of $236.5 million, total contracted revenue on a consolidated basis was approximately $1.8 billion. Including intercompany sales to Merom, our total forward sales book on a segment basis was approximately $2.4 billion. These figures now include the 12-year capacity agreement signed in May 2026. During the quarter, we took additional steps to maintain flexibility under our capital structure. On May 15th, we drew the $45 million available under our delayed draw term loan and used a portion of the proceeds to repay $8 million outstanding under our revolving credit facility. Hallador Energy had $45 million of total bank debt at June 30th, 2026 compared to no outstanding bank debt at March 31st, 2026 and $30 million at December 31st, 2025.

Todd Telesz
Todd Telesz
CFO at Hallador Energy

Total liquidity at June 30th, 2026 was $84.2 million, compared to $97.5 million at March 31st, 2026 and $42 million at June 30th, 2025. The sequential decrease reflects cash deployed during the planned outage, capital investment and the associated working capital build. At quarter end, total liquidity consisted of $29 million of unrestricted cash and cash equivalents and $55.2 million of additional borrowing capacity under our revolving credit facility. We believe our credit facility, together with our current liquidity position, provides the flexibility to manage working capital and fund our ongoing operations and investments at Merom.

Todd Telesz
Todd Telesz
CFO at Hallador Energy

As we mentioned in June, our financing strategy for Turtle Creek is considering a combination of project level and structural alternatives, including equipment financing, structured debt, and similar instruments designed deliberately to reserve flexibility with low to no equity solution while retaining our focus on balance sheet integrity. We are well underway in financial planning and look forward to providing updates as we make progress in the third quarter. With that, operator, we can now open the line for questions.

Operator

Certainly. Ladies and gentlemen, if you do have a question at this time, please press star one one on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star one again. Our first question comes from the line of Julien Dumoulin-Smith from Jefferies. Your question, please.

Analyst at Jefferies

Hey, guys. It's Kubera on for Julien. Thanks for taking my question. Congrats on the quarter. Just wanted to ask you a little bit more on the gas project. Could you give us some color on what's driving costs to be a little bit below expectations? Is it mostly the connection costs like you guys had thought of, or are there other factors? Separately, could you share more color on how the offtake agreements and conversations are trending? What kind of customer interest are you seeing for the gas project? Thanks.

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

Yeah, certainly. As we think about the gas project, Turtle Creek, what's changed to lower that budget, I think last quarter we said it would be less than $900 million. Now we're saying it's less than $800 million. Coupled with that, we've accelerated the COD to the second half of 2028. When we announced this in June, we had ranges for what things would cost, and now those scopes are more defined. The owner's engineer and I were over looking at the equipment. It's in excellent condition. We were happy with what we saw. Disassembly is underway. There was a substantial Siemens workforce on site. Shipment still remains on schedule for September. As the equipment, the restoration, the construction scopes have firmed up, the numbers have come in better than we initially assumed.

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

The other driver is this is not a greenfield project. We're building at Merom. We already own the site, the water, the infrastructure. That's how this project gets down to roughly $1,700 a kW, when we're seeing other projects priced well above that and coming in a year or two behind us. I think that's just what makes this project special in our mind is that we have a cost advantage, we have a speed to market advantage. In AI, it's all about speed to market. When you talk about marketing, of course, we point to and our sales table, we've added more definition there as to some of the work that we've done earlier in the year. That speaks to pricing. I think that will perhaps be at a numbers higher than what some of the analysts in market thought.

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

We just continue to see more and more interest. As we alluded to in our prepared remarks, we really think that we will add to the contracts that we've already put in place this year before the year is out. That is our goal. I think today we feel really good about that. If you look at what we've been doing, we've been pricing a coal asset. The list of buyers who are interested in buying output from a coal asset's output is smaller than that of gas. We think the market, from what we're experiencing, there's a much greater Rolodex that you can call up to talk to about the gas plant, and we're seeing that interest level.

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

Particularly as other states are putting more and more restrictions on new data center builds, we think that's funneling more of that CapEx spend towards the state of Indiana. We are seeing that in our backyard. We said in our prepared remarks, we have a pretty significant project that has broken ground. Anybody who gets Google Earth Live can see photos of that. It is pretty impressive to see a 1,000 acre development contiguous to our property, pouring foundations and moving right along. We have had a second project developer buy property on the other side of our plant contiguous to us. That said, we sell in front of the meter, so we can sell to any place in MISO Zone 6, which is the state of Indiana and the northern third of Kentucky. So we feel really good about the demand perspective at this time.

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

We look forward to delivering on that before the year is out, particularly on Merom. It will probably take a little longer to market Turtle Creek just because we have been working on Merom a little bit longer. But we are excited about what we see. I hope that resonates. I think this plant, we are excited about it. We think it is a big deal for our company and expect to make more announcements before the year is out.

Analyst at Jefferies

Awesome. Thank you.

Operator

Thank you. Our next question comes from the line of Nick Giles from B. Riley Securities. Your question, please.

Henry Hurll
Henry Hurll
Analyst at B. Riley Securities

Thank you, operator. Good afternoon, everyone. This is Henry Hurll on for Nick. In your prepared remarks, you mentioned the turbine disassembly is underway and there's a substantial workforce on that site there. Do you guys have any contingencies if the disassembly or logistics slip and the shipment is pushed to September? Any color there would be helpful. Or pushed out from September, sorry.

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

Yeah. Look, we're not too concerned about the timing of the shipment. We've got plenty of wiggle room there. Always like to get the asset sooner rather than later. Always like to get it online sooner rather than later. We're pushing to get that done as quickly as possible. That said, I don't think that getting the equipment to ship is the long pole in the tent. We're on a pretty short timeframe, right? We're saying COD roughly two years, right? Last half of 2028. We think that's a very marketable time for that project. Today, as we look about where we're at, I think we're excited about the potential success of that project. So not too concerned about the shipping date.

Henry Hurll
Henry Hurll
Analyst at B. Riley Securities

Got it. That's helpful. Thank you. Just on financing, obviously the goal is to minimize equity dilution. You kind of went through a couple different financing structures in the prepared remarks. What are you leaning most towards at this time, and when do you expect to disclose that? Thanks.

Todd Telesz
Todd Telesz
CFO at Hallador Energy

Sure. Thanks, Henry. It's Todd Telesz. I think as Brent alluded to during the course of the call, I think Turtle Creek has three primary advantages when you're talking to financing counterparties. One is the capital cost, two is the speed to market, and ultimately, those drive long-term affordability, which makes it a very attractive asset to contract with. As Kubera's question was really around the offtake agreements. I think when you look at those three factors, combined with what we view as a very robust financing market, in particular for equipment financings, that's extremely helpful for us. As you know, we also have the benefit of having the Merom coal-fired asset that has substantial contracts put in place and working hard at contracting even further on the Merom assets. I think those are very financeable contracts. So a couple different pockets of debt capital.

Todd Telesz
Todd Telesz
CFO at Hallador Energy

Between those things, I think then when you look out into the future, as you look at where we think the financial performance of the business is in the latter part of this decade, all those should be supportive of bringing on leverage onto this project and minimizing the amount of dilution for our current shareholders.

Henry Hurll
Henry Hurll
Analyst at B. Riley Securities

Thank you, Todd. That's very helpful. Then just on that same point, is there any possibility for government support from the DOE and the likes in financing the Turtle Creek project? Is that something that you're exploring currently?

Todd Telesz
Todd Telesz
CFO at Hallador Energy

Our DOE financing has really been focused on some of the things we're doing at Merom. We don't see any DOE financing for the Turtle Creek Gas asset at this point in time.

Henry Hurll
Henry Hurll
Analyst at B. Riley Securities

Got it. All right, I'll turn it over. Thanks, guys, and continued best of luck.

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

Thanks.

Todd Telesz
Todd Telesz
CFO at Hallador Energy

Thanks.

Operator

Thank you. Our next question comes from the line of Matthew Key from Texas Capital. Your question please.

Matthew Key
Matthew Key
Analyst at Texas Capital

Hey, good afternoon, everyone, and thanks for taking my questions. In regard to the DOE, in June you announced $27 million in DOE funding to help modernize Merom. I was just wondering, when would you want to complete those upgrades? I am just trying to get a sense of timing for that specific project.

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

Yeah. So we announced a month or two ago that we were selected to negotiate for $27.2 million of grants from the DOE that were to be used for our ELG compliance. That document is rounding third. So we anticipate some of that work will get done yet this year, so we should see some dollars matched in that probably in the fourth quarter, and then continuing on into 2027 and 2028.

Matthew Key
Matthew Key
Analyst at Texas Capital

Got it. That is helpful. I guess you mentioned you being relatively comfortable being open in your forward energy book over the medium term, just given the expectations for rerating and pricing. I was wondering if there are any specific price signals or increase in the curve you would want to see before facilitating a more aggressive stance in forward energy sales?

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

Well, I think we have seen some upward movement in the curve this year, so some of the conversations are advancing along those levels. I would not be surprised if you saw some energy sales from us yet this year. We will probably take more of a layered approach with some sales made this year and some in future years. Certainly not afraid to contract if the pricing signals are right for us, but we certainly do not feel any urgency. Capacity is a more illiquid market. Energy is a very liquid market. There are a lot of ways to sell energy. There are a few ways to sell capacity. That said, where we are really seeing the most pinch point is in the capacity markets, which is why we have been aggressive at Merom, the coal units. Two-thirds of that is roughly sold through 2040.

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

Our goal is to sell the balance of that out yet this year on multi-year contracts. The market seems to be supportive of that, which is why we are feeling confident about the demand and the robustness of that for Turtle Creek. We think this is an asset, it is a peaker plant, right? It primarily provides accredited capacity, and it does so at a price point and a timing that we think is just right up the fairway of what this market wants. That is kind of where our head is at on energy and capacity, Matthew.

Matthew Key
Matthew Key
Analyst at Texas Capital

Got it. That is helpful. Thank you for the time.

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

Yeah, thank you.

Operator

Thank you. Our next question comes from the line of Jeff Grampp from Northland Capital Markets. Your question please.

Jeff Grampp
Jeff Grampp
Analyst at Northland Capital Markets

Good afternoon, guys. Brent, I wanted to circle back on the contracting kind of process or decision tree, if you will. When we think about incremental capacity contracts on coal versus gas project, it sounds like, to your comment of a deeper Rolodex on the gas side, should we think about that project being more executable, if you will, over coal over the coming months? Or is there a, I guess, path of least resistance between those two that suggests one is further along versus another that we should expect?

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

Yeah, look, I think we have shown we are executing on coal. We're buyers of the gas. Think of it this way, there's probably three to four times the number we can talk to of potential buyers for a gas asset than there is of a coal asset. We're having great success on the coal side. So we're just further along on the coal side because that plant exists and is running today. Whereas Turtle Creek, we still have yet to make the final investment decision. Buyers want to see that project take a couple steps forward. Quite frankly, we want it to take a couple steps forward. We're waiting to hear what the system upgrade costs are for Turtle Creek. We think we may learn that yet this week.

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

We have a high degree of confidence there, because we use the same vendors that MISO uses to do their studies. We've already done those studies. Now, it doesn't matter what we think, it matters what MISO thinks. So we think this is a check-the-box exercise, but we still have to hear the number before we can make that final decision. We also make, I think, good advancements on the financing side with those discussions. So as we put those two things together, we think we're close to moving forward with that project. We have great confidence in that because we think we'll have Merom essentially sold out. Merom, the company really doesn't have a lot of debt. So when you look at what's the value of that asset, it doesn't have a lot of debt, and now we're adding Siemens turbines to the mix.

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

I think it's a very financeable project, and quite frankly, the response from the market is justifying our opinion. Again, the other thing that's different about this project is we actually have physical equipment. So many of the other projects have queues, right? Queue positions get pushed out. We've got to load something on a boat and ship it across the sea. I've been over to review that personally. Don't want to jinx ourselves, but quite frankly, it's going quite well, and it's a pretty simple process. So, we'll know more on that in a month. We expect it to be on a boat.

Jeff Grampp
Jeff Grampp
Analyst at Northland Capital Markets

Sounds good. Okay. I appreciate those details. For my follow-up, on the energy side of things, is it fair to think that that market is more, I guess, prone to at least relatively shorter-term contracts versus a 10 or 15-year capacity contract? Or are those opportunities still out there where we could see a longer-term energy contract as well? Do you guys have interest in that on your side as well?

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

There is interest in buying longer-term energy, and we have interest in doing that. We'll see if we can deliver on that before the year is out.

Jeff Grampp
Jeff Grampp
Analyst at Northland Capital Markets

All right. We'll stay tuned. Thanks, Brent.

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

All right. Thank you, Jeff.

Operator

Thank you. Our next question comes from the line of Jake Sekelsky from Alliance Global. Your question please.

Jake Sekelsky
Jake Sekelsky
Analyst at Alliance Global

Hi, Brent and Todd. Thanks for taking my questions.

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

Hey, Jake.

Jake Sekelsky
Jake Sekelsky
Analyst at Alliance Global

Just going back to Turtle Creek, and you mentioned CapEx initially came in below $900 million, and now we are below $800 million. I am just curious, are there any other levers you feel you might be able to pull that could drive this even lower as we get through FID? Or do you feel you have kind of flushed all that out?

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

Well, we certainly are dialing in more. I think there is a chance that project cost could go down yet again. But we want to make sure we do not have any surprises, right? As things get loaded on the boat, get delivered to Siemens. We will know more about that front, but we think we have got enough contingencies in there. We feel we are in pretty good shape. Again, we already think this project is magnitudes lower cost than some of the other projects that we have seen that are competing against it, and we have a time advantage. That is where the market seems to be paying up, is the speed to market play. Talk to me about electronics today and compute today, not years from now. So we think we have got something special. I hope that resonates.

Jake Sekelsky
Jake Sekelsky
Analyst at Alliance Global

Fair enough. Okay. Then, just from a financing perspective there, I am just curious, are there any strategic avenues that you are exploring, or are you thinking more along the traditional lines for the broader financing package?

Todd Telesz
Todd Telesz
CFO at Hallador Energy

Yeah, I think right now, Jake, I think we are very focused on more traditional financing packages, whether it be strictly equipment financing, quasi-project financing, and/or even corporate financing. So I think more traditional efforts focused on what we can do ourselves here at Hallador.

Jake Sekelsky
Jake Sekelsky
Analyst at Alliance Global

Got it. Okay. That's all for me. Thanks again.

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

Thank you, Jake.

Operator

Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Brent for any further remarks.

Brent Bilsland
Brent Bilsland
Chairman and CEO at Hallador Energy

Yeah. I want to thank everybody for taking the time to join us today and your interest in Hallador. We're excited about our company, the work that we've put into Merom, the work that we're putting into Turtle Creek, and we just think, pound for pound this is going to create exciting opportunities for the investor in Hallador. Thank you for your time.

Operator

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

Executives
    • Brent Bilsland
      Brent Bilsland
      Chairman and CEO
    • Todd Telesz
      Todd Telesz
      CFO
Analysts
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