Investing.com -- Hallador Energy Company (NASDAQ:HNRG) shares rose 5.6% in premarket trading Thursday following the company's announcement of a $700 million power deal that brings its total forward sales to $3 billion.
Hallador Energy said its subsidiary, Hallador Power Company, executed six-year capacity and energy agreements with an investment-grade MISO Zone 6 utility covering deliveries from the Merom Generating Station from June 1, 2029, through May 31, 2035. The agreements are effective upon signing and require no regulatory approval.
The capacity agreement is priced at the highest capacity price the company has contracted to date and more than 20% above the capacity contract announced in March. The deals leave a majority of Merom's expected production through 2040 contracted to investment-grade counterparties.
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Under the capacity agreement, the utility will purchase an annual average of 225 MW of Merom's accredited capacity for approximately $271 million of capacity revenue over the term. Based on current forward prices, the company estimates the energy agreement would generate approximately $422 million of revenue over the term.
The agreements increase contracted capacity and energy revenue from $46 per MWh for 2026 to $73 per MWh by 2030 and $75 per MWh for 2031-2035. With these agreements, approximately 95% of Merom's accredited capacity is under contract through 2035 and approximately two-thirds contracted for 2036 through 2040.
The company continues to advance its 460-megawatt Turtle Creek natural gas project adjacent to the existing Merom Generating Station. Hallador submitted an air permit application for the project on September 25. Once approved, Turtle Creek would expand the company's total generating capacity by over 40%.
Original Article
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