This article first appeared on GuruFocus .
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Revenue:Total operating revenue decreased to $101.5 million in Q2 2026, compared to $102.8 million in the prior year period.
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Electric Sales:$59.5 million in Q2 2026, compared to $60 million in the prior year period.
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Third-Party Coal Sales:Increased to $40.6 million, compared to $38.1 million in the prior year period.
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Accredited Capacity Revenue:Increased 17% year-over-year to $18.6 million.
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Energy Sales Volume:Increased 17% compared to the prior year period.
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Average Price per MWh:Declined to $41.69 from $52.66 for delivered energy.
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Net Loss:$15.2 million for Q2 2026, compared to net income of $8.2 million in the prior year period.
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Cash Flow from Operations:Used $23.9 million in Q2 2026, compared to $11.4 million provided in the prior year period.
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Adjusted EBITDA:-$2.9 million for Q2 2026, compared to $3.4 million in the prior year period.
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Capital Expenditures:$26.3 million in Q2 2026, compared to $13.1 million in the prior year period.
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Forward Sales Position:Approximately $1.6 billion as of June 30, 2026, up from $571.2 million at March 31, 2026.
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Total Forward Sales Book:Approximately $2.4 billion on a segment basis, including intercompany sales.
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Total Liquidity:$84.2 million at June 30, 2026, compared to $97.5 million at March 31, 2026.
Release Date: August 10, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Hallador Energy Co ( NASDAQ:HNRG ) is advancing its Turtle Creek natural gas project, with total project costs now expected to be below $800 million, down from previous estimates, and a targeted commercial operations date moved forward to the second half of 2028.
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The company has secured two landmark capacity agreements, totaling approximately $1.1 billion in contracted revenue, which has increased its total forward sales position to $2.4 billion, providing strong revenue visibility through 2040.
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Management reports robust demand for accredited capacity and energy from a growing and diverse set of counterparties, with a large data center project breaking ground adjacent to its property, signaling strong regional power demand.
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The company is exploring financing options for Turtle Creek with the objective of minimizing equity dilution, focusing on equipment financing, structured debt, and similar instruments.
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Hallador Energy Co ( NASDAQ:HNRG ) expects generation volumes to improve sequentially in the third quarter, as the planned maintenance outage at its Merom plant is complete and reliability investments are in place.
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The company's third-party coal sales increased year-over-year, driven by a 9% increase in average price per ton, and it sold 59,000 incremental tons to Merom in preparation for summer demand.
Negative Points
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Hallador Energy Co ( NASDAQ:HNRG ) reported a net loss of $15.2 million for Q2 2026, a significant decline from net income of $8.2 million in the prior year period.
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The company's adjusted EBITDA was negative $2.9 million in Q2 2026, compared to positive $3.4 million in the prior year period, reflecting higher purchase power costs and planned maintenance expenses.
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Cash flow used in operations was $23.9 million in Q2 2026, a sharp reversal from cash flow provided by operations of $11.4 million in the prior year period.
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The average price per megawatt-hour for delivered energy declined to $41.69 from $52.66 in the prior year period, impacting electric sales revenue.
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The company drew $45 million from its delayed draw term loan, increasing total bank debt to $45 million at June 30, 2026, from zero at March 31, 2026.
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Total liquidity decreased sequentially to $84.2 million from $97.5 million at March 31, 2026, due to cash deployed during the planned outage and capital investments.
Q & A Highlights
Q: Can you provide more color on what's driving the lower-than-expected capital costs for the Turtle Creek gas project, and what kind of customer interest are you seeing for its output? A: Brent Bilsland (Chairman and CEO) explained that as equipment restoration and construction scopes have become better defined, the project budget has decreased from under $900 million to under $800 million (roughly $1,700 per kW). This is not a greenfield project; it's being built at the existing Merom site with water and infrastructure already in place, giving it a significant cost and speed-to-market advantage over comparable projects. Regarding customer interest, he noted a much larger pool of potential buyers for gas-fired output compared to coal, and that interest is growing, particularly as other states impose restrictions on data center builds, funneling capital expenditure toward Indiana. He highlighted that a large data center project has broken ground adjacent to their property, and another is in early development on the other side of the plant.
Q: What are the primary financing structures you are leaning toward for Turtle Creek, and when do you expect to disclose the plan? A: Todd Telesz (CFO) stated that the project's low capital cost, speed to market, and long-term affordability make it very attractive to financing counterparties. He noted a robust financing market, particularly for equipment financing, and highlighted the financeable nature of the long-term contracts already secured for the Merom coal asset. The strategy is to combine project-level and structural alternativessuch as equipment financing and structured debtto minimize equity dilution for current shareholders. He expects to provide updates as they progress in the third quarter.
Q: Is there any possibility of government support, such as from the DOE, for financing the Turtle Creek project? A: Todd Telesz (CFO) clarified that DOE financing has been focused on initiatives at the existing Merom plant, such as the $27.2 million grant for ELG compliance. He stated they do not see DOE financing for the Turtle Creek gas asset at this point in time.
Q: Regarding the $27 million in DOE funding announced in June for Merom, when do you expect to complete those upgrades? A: Brent Bilsland (Chairman and CEO) said they were selected to negotiate for the $27.2 million grant for ELG compliance. He anticipates some of that work will be completed this year, with dollars matched potentially in the fourth quarter, and continuing into 2027 and 2028.
Q: Are there specific price signals or increases in the forward curve you would want to see before taking a more aggressive stance on forward energy sales? A: Brent Bilsland (Chairman and CEO) noted they have seen upward movement in the curve this year, and conversations are advancing at those levels. He wouldn't be surprised to see some energy sales this year, but they will take a layered approach, making some sales this year and some in future years. He emphasized that capacity is a more illiquid market and the primary pinch point, which is why they have been aggressive in selling Merom's capacity through 2040. The goal is to sell the balance of that capacity out this year under a multi-year contract.
Q: Should we think about the gas project being more executable over coal in the coming months, or is one further along than the other? A: Brent Bilsland (Chairman and CEO) explained they are further along on the coal side because that plant exists and is running today, whereas Turtle Creek has yet to reach a final investment decision. Buyers want to see the project take steps forward. They are waiting to hear the system upgrade costs from MISO, which they expect to learn soon, and have high confidence in the outcome. He also highlighted that unlike many other projects with queue positions that get pushed out, Hallador has physical equipment ready to ship, which is a significant differentiator.
Q: Is the energy market more prone to shorter-term contracts versus the 10- or 15-year capacity contracts, and are there opportunities for longer-term energy contracts? A: Brent Bilsland (Chairman and CEO) confirmed there is interest from buyers in longer-term energy contracts, and Hallador has interest in doing that as well. He indicated they will see if they can deliver on that before the year is out.
Q: Are there any other levers you can pull to drive the Turtle Creek capital cost even lower as you get through FID, or have you flushed all that out? A: Brent Bilsland (Chairman and CEO) said they are continuing to dial in the numbers and there is a chance project costs could go down again, but they want to ensure there are no surprises. He believes they have enough contingencies in place and are in good shape. He reiterated that the project is already at a magnitude lower cost than competing projects and has a significant time advantage, which is where the market is paying up.
Q: Are you exploring any strategic avenues for the broader financing package, or are you thinking more along traditional lines? A: Brent Bilsland (Chairman and CEO) stated they are focused on more traditional financing packages, whether it be strictly equipment financing, quasi-project financing, or corporate financing. The focus is on what they can do themselves at Hallador.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
