[ x ]
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended: March 31, 2013
or
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|||||
[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Commission file number: 001-3473
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“COAL KEEPS YOUR LIGHTS ON”
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![]() ![]() |
“COAL KEEPS YOUR LIGHTS ON”
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HALLADOR ENERGY COMPANY
(www.halladorenergy.com)
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|||||
Colorado
(State of incorporation)
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84-1014610
(IRS Employer Identification No.)
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1660 Lincoln Street, Suite 2700, Denver, Colorado
(Address of principal executive offices)
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80264-2701
(Zip Code)
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Issuer's telephone number: 303.839.5504
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o Large accelerated filer
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o Accelerated filer
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o Non-accelerated filer (do not check if a small reporting company)
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þ Smaller reporting company
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March 31,
2013
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December 31,
2012
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|||||||
ASSETS
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||||||||
Current assets:
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||||||||
Cash and cash equivalents
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$ | 18,402 | $ | 21,888 | ||||
Prepaid income taxes
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1,670 | |||||||
Accounts receivable
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6,790 | 8,127 | ||||||
Coal inventory
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4,534 | 2,342 | ||||||
Parts and supply inventory
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2,563 | 2,264 | ||||||
Other
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147 | 242 | ||||||
Total current assets
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34,106 | 34,863 | ||||||
Coal properties, at cost:
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||||||||
Land and mineral rights
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23,325 | 22,705 | ||||||
Buildings and equipment
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135,775 | 131,566 | ||||||
Mine development
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74,979 | 71,046 | ||||||
234,079 | 225,317 | |||||||
Less - accumulated DD&A
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(63,039 | ) | (58,479 | ) | ||||
171,040 | 166,838 | |||||||
Investment in Savoy
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13,026 | 12,230 | ||||||
Investment in Sunrise Energy
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4,090 | 3,969 | ||||||
Other assets
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12,366 | 11,307 | ||||||
$ | 234,628 | $ | 229,207 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY
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||||||||
Current liabilities:
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||||||||
Accounts payable and accrued liabilities
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$ | 9,972 | $ | 9,386 | ||||
Income taxes - current
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1,660 | |||||||
Total current liabilities
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9,972 | 11,046 | ||||||
Long-term liabilities:
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||||||||
Bank debt
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11,400 | 11,400 | ||||||
Deferred income taxes
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36,652 | 35,884 | ||||||
Asset retirement obligations
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2,630 | 2,573 | ||||||
Other
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5,723 | 6,295 | ||||||
Total long-term liabilities
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56,405 | 56,152 | ||||||
Total liabilities
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66,377 | 67,198 | ||||||
Commitments and contingencies
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||||||||
Stockholders' equity:
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||||||||
Preferred stock, $.10 par value, 10,000 shares authorized;
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||||||||
none issued
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||||||||
Common stock, $.01 par value, 100,000 shares authorized;
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||||||||
28,529 shares outstanding for both periods
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285 | 285 | ||||||
Additional paid-in capital
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87,176 | 86,576 | ||||||
Retained earnings
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80,586 | 75,118 | ||||||
Accumulated other comprehensive income
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204 | 30 | ||||||
Total stockholders’ equity
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168,251 | 162,009 | ||||||
$ | 234,628 | $ | 229,207 |
2013
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2012
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|||||||
Revenue:
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||||||||
Coal sales
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$ | 33,995 | $ | 29,620 | ||||
Equity income - Savoy
|
1,084 | 1,818 | ||||||
Equity income - Sunrise Energy
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122 | 56 | ||||||
Other
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2,461 | 2,462 | ||||||
37,662 | 33,956 | |||||||
Costs and expenses:
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||||||||
Operating costs and expenses
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23,290 | 18,433 | ||||||
DD&A
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4,560 | 3,806 | ||||||
Coal exploration costs
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539 | 419 | ||||||
SG&A
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1,976 | 1,855 | ||||||
Interest
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376 | 271 | ||||||
30,741 | 24,784 | |||||||
Income before income taxes
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6,921 | 9,172 | ||||||
Less income taxes:
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||||||||
Current
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801 | 1,884 | ||||||
Deferred
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652 | 1,135 | ||||||
1,453 | 3,019 | |||||||
Net income
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$ | 5,468 | $ | 6,153 | ||||
Net income per share:
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||||||||
Basic
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$ | .19 | $ | .22 | ||||
Diluted
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$ | .19 | $ | .21 | ||||
Weighted average shares outstanding:
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||||||||
Basic
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28,529 | 28,309 | ||||||
Diluted
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28,751 | 28,681 | ||||||
Net income
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$ | 5,468 | $ | 6,153 | ||||
Other comprehensive income:
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||||||||
Increase in value of marketable equity securities available for sale, net of tax
|
174 | 14 | ||||||
Comprehensive income
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$ | 5,642 | $ | 6,167 | ||||
2013
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2012
|
|||||||
Operating activities:
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||||||||
Cash provided by operating activities
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$ | 6,333 | $ | 9,579 | ||||
Investing activities:
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||||||||
Capital expenditures for coal properties
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(8,604 | ) | (2,372 | ) | ||||
Investment in Sunrise Energy
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(506 | ) | ||||||
Increase in marketable securities
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(1,215 | ) | (1,269 | ) | ||||
Other
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130 | |||||||
Cash used in investing activities
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(9,819 | ) | (4,017 | ) | ||||
Financing activities:
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||||||||
Payments to bank
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(2,500 | ) | ||||||
Other
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(23 | ) | ||||||
Cash used in financing activities
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(2,523 | ) | ||||||
Increase (decrease) in cash and cash equivalents
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(3,486 | ) | 3,039 | |||||
Cash and cash equivalents, beginning of period
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21,888 | 37,542 | ||||||
Cash and cash equivalents, end of period
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$ | 18,402 | $ | 40,581 | ||||
Shares
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Common Stock
|
Additional
Paid-in Capital
|
Retained Earnings
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AOCI*
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Total
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|||||||||||||||||||
Balance, January 1, 2013
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28,529 | $ | 285 | $ | 86,576 | $ | 75,118 | $ | 30 | $ | 162,009 | |||||||||||||
Stock-based compensation
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600 | 600 | ||||||||||||||||||||||
Net income
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5,468 | 5,468 | ||||||||||||||||||||||
Increase in value of marketable equity securities available for sale, net of tax
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174 | 174 | ||||||||||||||||||||||
Balance, March 31, 2013
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28,529 | $ | 285 | $ | 87,176 | $ | 80,586 | $ | 204 | $ | 168,251 | |||||||||||||
2013
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||||
Current assets
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$ | 18,304 | ||
Oil and gas properties, net
|
21,840 | |||
$ | 40,144 | |||
Total liabilities
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$ | 9,960 | ||
Partners' capital
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30,184 | |||
$ | 40,144 |
2013
|
2012
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|||||||
Revenue
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$ | 9,022 | $ | 8,887 | ||||
Expenses
|
(6,618 | ) | (4,854 | ) | ||||
Net income
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$ | 2,404 | $ | 4,033 |
2013
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||||
Current assets
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$ | 2,041 | ||
Oil and gas properties, net
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6,858 | |||
$ | 8,899 | |||
Total liabilities
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$ | 728 | ||
Partners' capital
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8,171 | |||
$ | 8,899 |
2013
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2012
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|||||||
Revenue
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$ | 812 | $ | 607 | ||||
Expenses
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(568 | ) | (495 | ) | ||||
Net income
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$ | 244 | $ | 112 | ||||
March 31,
2013
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December 31,
2012
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|||||||
Long-term assets:
|
||||||||
Advance coal royalties
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$ | 3,461 | $ | 3,324 | ||||
Deferred financing costs, net
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1,419 | 1,494 | ||||||
Marketable equity securities available for sale, at fair value (restricted)*
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5,054 | 3,548 | ||||||
Miscellaneous
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2,432 | 2,941 | ||||||
$ | 12,366 | $ | 11,307 |
Three months ended
March 31,
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||||||||
2013
|
2012
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|||||||
Other income:
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||||||||
MSHA reimbursements*
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$ | 2,053 | $ | 2,336 | ||||
Miscellaneous
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408 | 126 | ||||||
$ | 2,461 | $ | 2,462 | |||||
1.
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Competition from low-priced natgas
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2.
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The Obama’s administration dislike of burning coal to generate cheap and reliable electricity
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3.
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Onerous environmental regulations and overzealous mislead environmentalists
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4.
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Competition from new mines opening in the Illinois Basin
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5.
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Mild weather
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6.
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Slow economy
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1.
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Illinois Basin (ILB) coal replacing Central Appalachia (CAAP) coal
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2.
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More power plants are installing scrubbers enabling them to burn high-sulfur coal
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3.
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Coal can compete with natgas down to $2.75/Mcf
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4.
5.
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Coal is fastest growing fuel worldwide, thus U.S. exports are increasing rapidly
Natgas prices are above $4/Mcf
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Period
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Contracted
Tons
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Average
Price
|
|||
Nine months ending
December 31, 2013
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2,431,000
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$40.84
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|||
Year 2014
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1,700,000
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45.13
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|||
Year End Reserves
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||||||||||
Annual Capacity
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2012
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2011
|
||||||||
Proven
|
Probable
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Proven
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Probable
|
|||||||
Carlisle (assigned)
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3.3
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34.2
|
9.3
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36.0
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10
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|||||
Ace-in-the-Hole (assigned)
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0.5
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3.1
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- |
-
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- | |||||
Bulldog (unassigned)
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-
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19.5
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16.1
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16.3
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16
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|||||
Russellville (unassigned)
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-
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15.5
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13.9
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-
|
- | |||||
Total
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3.8
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72.3
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39.3
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52.3
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26
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|||||
Assigned
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46.6
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|||||||||
Unassigned
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65.0
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|||||||||
Total
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111.6
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●
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SO2 - Historically, Carlisle has guaranteed a 6# SO2 product, however, with the addition of Ace we can blend lower sulfur coal with Carlisle coal and guarantee a mid-sulfur product which should command a higher price. Few mines in the ILB have the ability to offer their customers various ranges of SO2. The Carlisle Mine has supplied coal to 11 different power plants. With the addition of low sulfur blend coal from Ace we expect our list of customers to grow.
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●
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Chlorine - Our reserves have lower chlorine (<0.10%) than average ILB reserves of 0.22%. Much of the ILB’s new production is located in Illinois and possesses chlorine content in excess of .30%. The relatively low chlorine content of our reserves is attractive to buyers given their desire to limit the corrosive effects of chlorine in their power plants.
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●
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Transportation - The Carlisle mine has a double 100 rail car loop facility and a four-hour certified batch load-out facility connected to the CSX railroad. The Indiana Rail Road (INRD) also has limited running rights on the CSX to our mine. Dual rail access gives us a freight advantage to more customers. Long term, the CSX anticipates our coal being shipped to southeast markets via their railroad. We sell our coal FOB the mine and substantially all of our coal is transported by rail. However, on occasion we have shipped to three power plants via truck.
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Mine recovery
|
Wash plant recovery
|
|||||
Carlisle
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53% | 79% | ||||
Bulldog
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45% | 77% | ||||
Russellville
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54% | 77% |
in 000’s
|
||||
Carlisle - maintenance capex
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$ | 3,516 | ||
Carlisle - expansion/improvements
|
346 | |||
Carlisle - land and minerals
|
430 | |||
Ace - mine development
|
1,294 | |||
Ace - surface equipment
|
2,981 | |||
Ace - land and minerals
|
102 | |||
Other projects
|
93 | |||
Items accrued for but not paid
|
(158 | ) | ||
Capex per the Cash Flow Statement
|
$ | 8,604 |
2nd 2012
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3rd 2012
|
4th 2012
|
1st 2013
|
T4Qs*
|
||||||||||||||||
Coal sales
|
$
|
32,487
|
$
|
36,152
|
$
|
33,111
|
$
|
33,995
|
$
|
135,745
|
||||||||||
Tons sold
|
743
|
810
|
752
|
840
|
3,145
|
|||||||||||||||
Average price/ton
|
$
|
43.72
|
$
|
44.63
|
$
|
44.03
|
$
|
40.47
|
$
|
43.16
|
||||||||||
Operating costs
|
$
|
18,816
|
$
|
20,745
|
$
|
21,745
|
$
|
23,290
|
$
|
84,596
|
||||||||||
Average cost/ton
|
$
|
25.32
|
$
|
25.61
|
$
|
28.91
|
$
|
27.73
|
$
|
26.90
|
||||||||||
Margin
|
$
|
13,671
|
$
|
15,407
|
$
|
11,366
|
$
|
10,705
|
$
|
51,149
|
||||||||||
Margin/ton
|
$
|
18.40
|
$
|
19.02
|
$
|
15.11
|
$
|
12.74
|
$
|
16.26
|
||||||||||
Capex
|
$
|
1,857
|
$
|
4,993
|
$
|
16,987
|
$
|
8,604
|
$
|
32,441
|
2nd 2011
|
3rd 2011
|
4th 2011
|
1st 2012
|
T4Qs*
|
||||||||||||||||
Coal sales
|
$
|
32,136
|
$
|
34,174
|
$
|
37,723
|
$
|
29,620
|
$
|
133,653
|
||||||||||
Tons sold
|
765
|
805
|
921
|
701
|
3,192
|
|||||||||||||||
Average price/ton
|
$
|
42.01
|
$
|
42.45
|
$
|
40.96
|
$
|
42.25
|
$
|
41.87
|
||||||||||
Operating costs
|
$
|
17,902
|
$
|
19,355
|
$
|
21,129
|
$
|
18,433
|
$
|
76,819
|
||||||||||
Average cost/ton
|
$
|
23.40
|
$
|
24.04
|
$
|
22.94
|
$
|
26.30
|
$
|
24.07
|
||||||||||
Margin
|
$
|
14,234
|
$
|
14,819
|
$
|
16,594
|
$
|
11,187
|
$
|
56,834
|
||||||||||
Margin/ton
|
$
|
18.61
|
$
|
18.41
|
$
|
18.02
|
$
|
15.96
|
$
|
17.81
|
||||||||||
Capex
|
$
|
5,700
|
$
|
4,467
|
$
|
15,970
|
$
|
2,372
|
$
|
28,509
|
2013
|
2012
|
|||||||
Revenue:
|
||||||||
Oil
|
$ | 7,499 | $ | 7,299 | ||||
NGLs (natural gas liquids)
|
225 | 269 | ||||||
Natgas
|
134 | 98 | ||||||
Contract drilling
|
455 | 1,182 | ||||||
Other
|
709 | 39 | ||||||
Total revenue
|
9,022 | 8,887 | ||||||
Costs and expenses:
|
||||||||
LOE (lease operating expenses)
|
1,310 | 1,098 | ||||||
Contract drilling costs
|
776 | 731 | ||||||
DD&A (depreciation, depletion & amortization)
|
1,209 | 961 | ||||||
G&G (geological and geophysical) costs
|
1,203 | 651 | ||||||
Dry hole costs
|
554 | 285 | ||||||
Impairment of unproved properties
|
1,147 | 810 | ||||||
Other exploration costs
|
80 | 61 | ||||||
G&A (general & administrative)
|
339 | 257 | ||||||
Total expenses
|
6,618 | 4,854 | ||||||
Net income
|
$ | 2,404 | $ | 4,033 | ||||
The information below is not in thousands:
|
||||||||
Oil production - barrels
|
83,000 | 72,900 | ||||||
NGLs production - barrels
|
5,325 | 4,900 | ||||||
Natgas production - Mcf
|
38,080 | 31,900 | ||||||
Average oil prices/barrel for the quarter
|
$ | 90.35 | $ | 100.00 | ||||
Average NGL prices/barrel for the quarter
|
$ | 42.25 | $ | 54.93 | ||||
Average natgas prices/Mcf for the quarter
|
$ | 3.53 | $ | 3.07 |
15
|
Letter Regarding Unaudited Interim Financial Information
|
31
|
SOX 302 Certifications
|
32
|
SOX 906 Certification
|
101
|
Interactive Files
|
HALLADOR ENERGY COMPANY
|
||
Date: May 15, 2013
|
/s/W. Anderson Bishop
|
|
W. Anderson Bishop, CFO and CAO
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Hallador Energy Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
||
/s/VICTOR P. STABIO
|
|||
May 15, 2013
|
Victor P. Stabio, CEO
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Hallador Energy Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
||
/s/W. Anderson Bishop
|
|||
May 15, 2013
|
W. Anderson Bishop, CFO
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
May 15, 2013
|
By:
|
/s/Victor P. Stabio
Victor P. Stabio, CEO
|
||
/s/W. Anderson Bishop
W. Anderson Bishop, CFO
|
Section
|
Section
|
Section
|
Section
|
Section
|
Proposed
|
||||||||
104(a)
|
104(b)
|
104(d)
|
107(a)
|
110(b)(2)
|
MSHA
|
||||||||
Month
|
Citations
|
Orders
|
Citation/Orders
|
Orders
|
Violations
|
Assessments
|
|||||||
(in thousands)
|
|||||||||||||
January
|
1
|
0
|
0
|
0
|
0
|
$5.3
|
|||||||
February
|
5
|
0
|
0
|
0
|
0
|
10.3
|
|||||||
March
|
2
|
0
|
0
|
0
|
0
|
3.5
|
M5Q.&3G_`!Z?7^Y_FF<1^QG_`&S\"?BSXK_8U\5WSS66GM_;7A"[E_Y: MV,G^L_7]?,K8_P""C'PBO?&GPBC^*GA6'R]?\"7G]HV?9O^6H_]J_\` M;*MK]IGPW_PC7Q1\`_'S1H2EQH?B*+2M8SC][8WW[G)_ZYRR1?\`?RO9+JST MW7-)DLM1@$EM T__`S`^"/Q&TWXJ_"_1/',9`BU/38I_P#MH1\_ZT5Y_P#L2:IW``\'>*K_2;<_].YD^T0?^0YA17JY;CL3]1A?>QY>.HX;ZW/E6ESTO MX:^%%\%_#[1_"$\`+V.FPV\W/_+7ROWE/UOPVNH^/-&\0S$"/3-/NHX>?^6L MIB_]IQR5U1*D9-`*@9'XUZ:P])4O9G-[2JZO.<[X^TA=?\*:IX D6$>EV,`C@MH8XX8_2/I6H0#P:`,5I[)>UYP]H_9\ARGP]\ M.'PMX=33I3_I$T\MY=D?QRRRF64_G)71U.NWL*6BE35*GR(4Y^TJ 5+_P"BHJ=<>#T/Q+M/'$&. M-(ETZ]Y_Z:Q2Q?\`M7_O[73,VWM0K;JP^KTO9>S+]I4OS',?$WPA!XZ^'^J^ M%P@$EW:?NN?^6H_>1G_OYBM_3TV0XFJZ0#P:`,57LE[7G#VC]GR')>'?#5KX M6\;>(/$T7$6O&UGF_P"NT<7D_P#HN.*BNI\CWHJ/JU(.9$E&`.@HHKI("BBB <@`HHHH`****`#`]*,`=!110`4444`%%%%`'_V3\_ ` end
(5) Investment in Sunrise Energy (Detail) - Condensed Statement of Operations (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Revenue | $ 37,662 | $ 33,956 |
Expenses | (30,741) | (24,784) |
Net income | 5,468 | 6,153 |
Sunrise Energy
|
||
Revenue | 812 | 607 |
Expenses | (568) | (495) |
Net income | $ 244 | $ 112 |
(3) Bank Debt
|
3 Months Ended |
---|---|
Mar. 31, 2013
|
|
Debt Disclosure [Text Block] |
(3) Bank
Debt
During
October 2012, Sunrise Coal, our wholly-owned subsidiary,
entered into a new credit agreement (the “Credit
Agreement”) with PNC Bank, as administrative agent, and
the lenders named therein. The Credit Agreement replaces the
previous credit agreement we had with PNC. Closing costs on
this new facility were about $1.5 million which were deferred
and are being amortized over five
years. Outstanding debt at March 31, 2013 was
$11.4 million.
The
Credit Agreement provides for a $165 million senior secured
revolving credit facility. The facility matures in five
years. The facility is collateralized by substantially all of
Sunrise’s assets and we are the guarantor. We will draw
on the facility as needed for development of our new projects
in Illinois and Indiana.
All
borrowings under the Credit Agreement bear interest, at LIBOR
plus 2% if the leverage ratio is less than 1.5X, LIBOR plus
2.5% if the leverage ratio is over 1.5 but less than 2X and
at LIBOR plus 3% if the leverage ratio is over 2X.
The maximum leverage ratio is 2.75X. The leverage
ratio is equal to funded debt/EBITDA. The annual
commitment fee is 50 BPS but falls to 37.5 BPS if we borrow
more than 33% of the facility. The maximum that we
can currently borrow is $125 million. The Credit Agreement
also imposes certain other customary restrictions and
covenants as well as certain milestones we must meet in order
to draw down the full amount.
|