10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended: September 30, 2015 OR
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-3473
“COAL KEEPS YOUR LIGHTS ON”		“COAL KEEPS YOUR LIGHTS ON”
HALLADOR ENERGY COMPANY (www.halladorenergy.com)
Colorado (State of incorporation)		84-1014610 (IRS Employer Identification No.)

1660 Lincoln Street, Suite 2700, Denver, Colorado (Address of principal executive offices) 80264-2701 (Zip Code)

Issuer's telephone number: 303.839.5504

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ    No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ    No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "larger accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

¨ Large accelerated filer	þ Accelerated filer
¨ Non-accelerated filer (do not check if a small reporting company)	¨ Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨    No þ

As of November 5, 2015, we had 29,059,000 shares outstanding.

1

PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

Consolidated Balance Sheet

(in thousands)

	September 30,			December 31,
	2015			2014
ASSETS
Current assets:
Cash and cash equivalents	$	19,503		$	13,469
Marketable securities		1,427			1,656
Accounts receivable		26,124			27,297
Income tax receivable		4,835			5,791
Coal inventory		10,704			19,722
Parts and supply inventory		12,982			14,919
Other		1,467			1,555
Total current assets		77,042			84,409
Coal properties, at cost:
Land and mineral rights		115,963			116,025
Buildings and equipment		346,493			323,758
Mine development		127,745			124,435
		590,201			564,218
Less - accumulated DD&A		(138,949	)		(106,608	)
		451,252			457,610
Investment in Savoy		13,787			13,896
Investment in Sunrise Energy		4,845			4,821
Other assets (Note 5)		16,472			18,849
	$	563,398		$	579,585
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion bank debt	$	26,250		$	21,875
Accounts payable and accrued liabilities		28,922			28,105
Total current liabilities		55,172			49,980
Long-term liabilities:
Bank debt		239,783			284,470
Deferred income taxes		46,883			41,581
Asset retirement obligations		12,103			12,074
Other		2,110			1,605
Total long-term liabilities		300,879			339,730
Total liabilities		356,051			389,710
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.10 par value, 10,000 shares authorized; none issued
Common stock, $.01 par value, 100,000 shares authorized; 29,058 and 28,962, shares outstanding, respectively		290			289
Additional paid-in capital		92,123			90,218
Retained earnings		114,995			99,003
Accumulated other comprehensive income (loss)		(61	)		365
Total stockholders’ equity		207,347			189,875
	$	563,398		$	579,585

See accompanying notes.

2

Consolidated Statement of Comprehensive Income (Loss)

(in thousands, except per share data)

	Nine Months Ended September 30,						Three Months Ended September 30,
	2015			2014			2015			2014
Revenue:
Coal sales	$	273,728		$	133,910		$	81,332		$	64,764
Equity income (loss) - Savoy		(110	)		5,731			(93	)		1,217
Equity income - Sunrise Energy		24			191			21			104
Other		1,625			717			753			237
		275,267			140,549			82,013			66,322
Costs and expenses:
Operating costs and expenses		191,427			101,689			56,995	(1)		52,588
DD&A		32,756			17,131			10,648			6,979
Coal exploration costs		1,581			1,907			381			716
SG&A		9,427			7,220			3,003			2,511
Interest (2)		13,955			2,687			5,176			1,825
Vectren deal costs					8,912						8,912
		249,146			139,546			76,203			73,531
Income (loss) before income taxes		26,121			1,003			5,810			(7,209	)
Less income taxes:
Current		1,231			4,244			680			(157	)
Deferred		5,302			(4,067	)		(14	)		(1,284	)
		6,533			177			666			(1,441	)
Net income (loss) (3)	$	19,588		$	826		$	5,144		$	(5,768	)
Net income (loss) per share: (Note 7)
Basic and diluted	$	0.65		$	0.03		$	0.17		$	(0.20	)
Weighted average shares outstanding:
Basic and diluted		29,011			28,766			29,044			28,772

__________________________

⁽¹⁾ Oaktown’s operating costs for the 3^rd quarter 2015 were $28.13/ton.

⁽²⁾ Included in interest expense is the change in the estimated fair value of our interest rate swaps. For the nine and three months ended September 30, 2015 such amounts were $1,858 and $1,251, respectively.

⁽³⁾ There is no material difference between net income (loss) and comprehensive income (loss).

See accompanying notes.

3

Consolidated Condensed Statement of Cash Flows

For the nine months ended September 30,

(in thousands)

	2015			2014
Operating activities:
Cash provided by operating activities	$	76,573		$	20,730
Investing activities:
Capital expenditures for coal properties		(27,109	)		(14,326	)
Vectren Fuels acquisition					(319,762	)
Other		478
Cash (used in) investing activities		(26,631	)		(334,088	)
Financing activities:
Dividends		(3,596	)		(3,593	)
Bank borrowings					350,000
Payments on bank debt		(40,312	)		(20,375	)
Other					(6,884	)
Cash (used in) provided by financing activities		(43,908	)		319,148
Increase in cash and cash equivalents		6,034			5,790
Cash and cash equivalents, beginning of period		13,469			16,228
Cash and cash equivalents, end of period	$	19,503		$	22,018

See accompanying notes.

4

Consolidated Statement of Stockholders’ Equity

(in thousands)

	Shares			Common Stock		Additional Paid-in Capital			Retained Earnings			AOCI(L)*			Total
Balance, January 1, 2015		28,962		$	289	$	90,218		$	99,003		$	365		$	189,875
Stock-based compensation							2,362									2,362
Stock issued on vesting of RSUs		127			1											1
Taxes paid on RSU vesting		(45	)				(543	)								(543	)
Dividends										(3,596	)					(3,596	)
Net income										19,588						19,588
Other		14					86						(426	)		(340	)
Balance, September 30, 2015		29,058		$	290	$	92,123		$	114,995		$	(61	)	$	207,347

^{*Accumulated Other Comprehensive Income (Loss)}

See accompanying notes.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) General Business

The interim financial data is unaudited; however, in our opinion, it includes all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the results for the interim periods. The financial statements included herein have been prepared pursuant to the SEC’s rules and regulations; accordingly, certain information and footnote disclosures normally included in GAAP financial statements have been condensed or omitted.

The results of operations and cash flows for the nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for future quarters or for the year ending December 31, 2015. To maintain consistency and comparability, certain 2014 amounts have been reclassified to conform to the 2015 presentation.

Our organization and business, the accounting policies we follow and other information, are contained in the notes to our consolidated financial statements filed as part of our 2014 Form 10-K. This quarterly report should be read in conjunction with such 10-K.

The consolidated financial statements include the accounts of Hallador Energy Company and its wholly owned subsidiary, Sunrise Coal, LLC (Sunrise), and Sunrise’s wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. We are engaged in the production of steam coal from mines located in western Indiana.  We own a 40% equity interest in Savoy Energy, L.P., a private oil and gas company, which has operations in Michigan and a 50% interest in Sunrise Energy, LLC, a private entity engaged in shale and coalbed methane operations in the same vicinity as the Carlisle Mine.

(2) Bank Debt

To finance the August 2014 Vectren Fuels acquisition, we entered into a credit agreement with PNC Bank as administrative agent for a group of several other banks. The credit agreement allows for a $250 million revolver and a $175 million term loan. Our debt at September 30, 2015 was $266 million (term-$146, revolver-$120). The maximum that we could borrow at September 30, 2015 was $311 million due to the covenants. The credit facility is collateralized by substantially all of Sunrise’s assets and we are the guarantor. Bank fees and other costs incurred in connection with this new facility were about $6.8 million, which were deferred and are being amortized over five years.

All borrowings under the credit agreement bear interest at LIBOR (20 bps at September 30, 2015) plus 2.25% if the leverage ratio (debt/EBITDA) is less than 1X; LIBOR plus 2.5% if the leverage ratio is over 1X but less than 1.5X; LIBOR plus 2.75% if the ratio is over 1.5X but less than 2X; LIBOR plus 3% if the ratio is over 2X but less than 2.5X and at LIBOR plus 3.5% if the leverage ratio is over 2.5X. The computed ratio at September 30, 2015 was 2.58X. The leverage ratio is currently 3.50X.  We entered into swap agreements to fix the LIBOR component of the interest rate to achieve an effective fixed rate of no greater than 5% on 100% ($175 million) of the term loan and on $100 million of the revolver. The term loan swap steps down in unison with the term loan payment and the revolver swap steps down 10% each quarter commencing March 31, 2016. At September 30, 2015, these two interest rate swaps had an estimated fair value current liability of $2.5 million included in accounts payable and accrued liabilities.

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. Any non-tax cash distributions from Savoy are required to be applied toward the debt. The term loan requires quarterly payments with annual amortization at 10% (2015), 15% (2016), 15% (2017), 20% (2018), and 20% (2019) with a balloon at maturity.

The credit agreement matures on August 29, 2019, but we have the right to prepay the loan at any time without penalty.

6

(3) Investment in Savoy

We currently own a 40% interest in Savoy Energy, L.P., a private company engaged in the oil and gas business primarily in the state of Michigan.  Savoy uses the successful efforts method of accounting. Our 45% ownership was decreased to 40% on October 1, 2014 due to the exercise of options by Savoy’s management. We account for our interest using the equity method of accounting.

Below (in thousands) to the 100% is a condensed balance sheet at September 30, and a condensed statement of operations for the nine months ended September 30, 2015 and 2014.

Condensed Balance Sheet

	2015
Current assets	$	11,709
Oil and gas properties, net		26,522
	$	38,231
Total liabilities	$	5,152
Partners’ capital		33,079
	$	38,231

Condensed Statement of Operations

	2015			2014
Revenue	$	10,887		$	32,135
Expenses		(11,156	)		(19,423	)
Net income (loss)	$	(269	)	$	12,712

7

(4) Investment in Sunrise Energy

We own a 50% interest in Sunrise Energy, LLC, which owns gas reserves and gathering equipment with plans to develop and operate such reserves. Sunrise Energy also plans to develop and explore for coal-bed methane gas reserves on or near our underground coal reserves. They use the successful efforts method of accounting. We account for our interest using the equity method of accounting.

Below (in thousands) to the 100% is a condensed balance sheet at September 30, and a condensed statement of operations for the nine months ended September 30, 2015 and 2014.

Condensed Balance Sheet

	2015
Current assets	$	2,325
Oil and gas properties, net		8,131
	$	10,456
Total liabilities	$	777
Members’ capital		9,679
	$	10,456

Condensed Statement of Operations

	2015			2014
Revenue	$	1,773		$	2,328
Expenses		(1,725	)		(1,945	)
Net income	$	48		$	383

8

(5) Other Long-Term Assets (in thousands)

	September 30,		December 31,
	2015		2014
Long-term assets:
Advance coal royalties	$	6,506	$	5,496
Deferred financing costs, net		5,461		6,507
Marketable equity securities available for sale, at fair value (restricted)*		1,723		2,249
Other		2,782		4,597
	$	16,472	$	18,849

^{*Held by Sunrise Indemnity, Inc., our wholly owned captive insurance company.}

(6) Self Insurance

In late August 2010, we decided to self-insure our underground mining equipment. Such equipment is allocated among 12 mining units spread out over 20 miles. The historical cost of such equipment is approximately $250 million.

(7) Net Income (Loss) per Share

We compute net income (loss) per share using the two-class method, which is an allocation formula that determines net income (loss) per share for common stock and participating securities, which for us are our outstanding RSUs. Outstanding RSUs have been excluded from the calculation of diluted weighted average shares outstanding because the impact would be anti-dilutive.

The following table sets forth the computation of net income (loss) allocated to common shareholders for the nine and three months ended September 30, 2015 and 2014 (in thousands):

	Nine months ended September 30,						Three months ended September 30,
	2015			2014			2015			2014
Numerator:
Net income (loss)	$	19,588		$	826		$	5,144		$	(5,768	)
Less earnings allocated to RSUs		(595	)		(23	)		(155	)
Net income (loss) allocated to common shareholders	$	18,993		$	803		$	4,989		$	(5,768	)

(8) Vectren Fuels Acquisition

On August 29, 2014, we consummated the acquisition of all the common stock of Vectren Fuels, Inc. for $311 million, which was accounted for as a business acquisition requiring measurement of acquired assets and assumed liabilities at their estimated fair value in applying purchase accounting. The estimated fair values are based on market participant assumptions.

9

(9) Asset Realization

The Carlisle assets had an aggregate carrying value of $177 million at September 30, 2015. Considering the modifications to our coal contracts and the reduction in force as discussed in the MD&A section, we conducted review of those assets for recoverability, and determined that no impairment charge was necessary. In conducting such review, we assumed (i) that natgas prices will start to increase in late 2016 (ii) Carlisle production will increase in 2017 and (iii) sometime in 2019, the Carlisle Mine will return to its normal production capacity of three million tons per year. If, in later quarters, we reduce our estimate of the future net cash flows attributable to the Carlisle Mine, it may result in future impairment of such assets and such charges could be significant.

10

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

Hallador Energy Company

Denver, Colorado

We have reviewed the accompanying consolidated condensed balance sheet of Hallador Energy Company and subsidiaries (the "Company") as of September 30, 2015, and the related consolidated condensed statement of comprehensive income for the nine and three month periods ended September 30, 2015 and 2014, the consolidated condensed statement of cash flows for the nine month periods ended September 30, 2015 and 2014, and the consolidated condensed statement of stockholders' equity for the nine month period ended September 30, 2015. These financial statements are the responsibility of the Company's management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying condensed consolidated interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of the Company as of December 31, 2014, and the related consolidated statements of comprehensive income, cash flows, and stockholders’ equity for the year then ended (not presented herein); and in our report dated March 5, 2015, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2014, is fairly stated, in all material respects, in relation to the balance sheet from which it has been derived.

/s/ EKS&H LLLP

November 6, 2015

Denver, Colorado

11

ITEM 2. MD&A

The following discussion updates the MD&A section of our 2014 Form 10-K and should be read in conjunction therewith.

Our consolidated financial statements should be read in conjunction with this discussion.

Overview

The largest portion of our business is devoted to coal mining in the state of Indiana through Sunrise Coal, LLC (a wholly owned subsidiary) serving the electric power generation industry.  We also own a 40% equity interest in Savoy Energy, L.P., a private oil and gas exploration company with operations in Michigan, and a 50% interest in Sunrise Energy, LLC, a private natgas exploration company with operations in Indiana. We account for our investments in Savoy and Sunrise Energy using the equity method.

On August 29, 2014, we consummated the acquisition of Vectren Fuels, Inc. (VFI). VFI, headquartered in Evansville, Indiana, owned three underground coal mines in southwestern Indiana, including the Oaktown 1 and Oaktown 2 mines in Oaktown, Indiana, and the Prosperity Mine located in Petersburg, Indiana. The Prosperity Mine was idled on August 29, 2014. The two underground mines located near Oaktown, Indiana are seven miles south of our Carlisle underground mine. Oaktown 2 is contiguous to our Carlisle mine and War Eagle reserve.

Oaktown 1, Oaktown 2, Carlisle and War Eagle are now one large underground mining complex representing 160 million tons of controlled reserves, with three portals, two wash plants and two rail facilities, located on the CSX railroad. We anticipate total capacity for the three mines to be roughly 11.3 million tons annually. Additionally, the capacity of our Ace in the Hole mine is .5 million tons annually. Thus, our total mining capacity is 11.8 million tons annually.

For 2015, over 80% of our coal sales are to customers with large scrubbed coal-fired power plants in the state of Indiana. Our mines and coal reserves are strategically located in close proximity to our primary customers, which reduces transportation costs and thus provides us with a competitive advantage with respect to those customers; our closest customer’s plant is 13 miles away and the farthest Indiana customer is 200 miles away. We have access to our primary customers directly through either the CSX railroad (NYSE:CSX) or through the Indiana Rail Road (majority owned by the CSX) and via truck.

The majority of our coal is sold to investment grade customers who have scrubbed, “base load” power plants. Base load power plants are among the lowest cost producers of electricity and the first to dispatch in the power grid. Due to the large investments made to these plants, none of these plants are scheduled for retirement; thus, we expect to be supplying these plants for many years.  It is not economical for the smaller, older, less efficient power plants to install scrubbers and other pollution control devices; accordingly, those type plants most likely will be retired in the coming years.

12

Our Coal Contracts and Reduction in Force

We sell coal to the following customers: Duke Energy Corporation (NYSE:DUK), Hoosier Energy, an electric cooperative, Indianapolis Power & Light Company (IPL), a wholly-owned subsidiary of The AES Corporation (NYSE:AES), Northern Indiana Public Service Co. (NIPSCO), a wholly-owned subsidiary of NiSource Inc. (NYSE:NI) and Vectren Corporation (NYSE:VVC). We also deliver coal to two Florida utilities. We believe these Florida sales are an indication of the trend of ILB coal replacing CAPP coal that has traditionally supplied the southeast markets. 

2015 brought mild weather and a glut of low priced natgas.  Most of our customers were surprised by these conditions and purchased too much coal for 2015.  In an effort to assist our customers to balance their current needs and to secure long-term fuel supply, we agreed to modify several of our contracts.

To implement these modifications, production at our Oaktown complex has been increased and production at our Carlisle mine was decreased.  For the next couple of years, we expect Oaktown to represent more than 90% of our production.

Consequently, a large number of employees were transferred from Carlisle to Oaktown. Unfortunately, in late July, a reduction in force was made of 175 employees.

The table below shows our contracted tons. Some of our contracts contain language that allow our customers to increase or decrease tonnages throughout the year. The table represents the minimum and maximum tonnages we could deliver under existing contracts. In some cases, our customers are required to purchase their additional tonnage needs from us. We fully anticipate making additional sales.

Not all contract modifications are finalized but we have verbal and written communications for the following future sales (in thousands except prices):

		Minimum Tons To Be Sold						Maximum Tons To Be Sold						Average
		Priced		(Unpriced)		Total		Priced		(Unpriced)		Total		Estimated
Year		Tons		Tons		Tons		Tons		Tons		Tons		Prices
	2015		1,528				1,528		1,528				1,528	$	45.29
	2016(1)		5,568				5,568		6,424				6,424		43.34
	2017(2)		3,070		389		3,459		4,620		581		5,201		42.67
	2018		2,685		1,199		3,884		4,410		1,791		6,201		41.67
	2019		2,575		2,009		4,584		3,450		3,001		6,451		42.15
	2020		2,350		2,009		4,359		3,200		3,001		6,201		43.77
	2021				2,009		2,009				3,001		3,001
	2022				2,009		2,009				3,001		3,001
	2023				1,620		1,620				2,420		2,420
	2024				810		810				1,210		1,210
			17,776		12,054		29,830		23,632		18,006		41,638

______________________________

⁽¹⁾ For 2016, we estimate we will sell 6.5 million tons.

⁽²⁾ For 2017, we estimate we will sell 7.5 million tons.

Committed unpriced tons are firm commitments, meaning we are required to ship and our customer is required to receive said tons through the duration of the contract. The contracts provide mechanisms for establishing a market-based price. As set forth in the table above, we have 12-18 million tons committed but unpriced through 2024. 

13

We expect to continue selling a significant portion of our coal under supply agreements with terms of one year or longer. Typically, customers enter into coal supply agreements to secure reliable sources of coal at predictable prices while we seek stable sources of revenue to support the investments required to open, expand and maintain, or improve productivity at the mines needed to supply these contracts. The terms of coal supply agreements result from competitive bidding and extensive negotiations with customers.

Asset Realization

The Carlisle assets had an aggregate carrying value of $177 million at September 30, 2015. Considering the modifications to our coal contracts and the reduction in force as discussed in the MD&A section, we conducted a review of those assets for recoverability, and determined that no impairment charge was necessary. In conducting such review, we assumed (i) that natgas prices will start to increase in late 2016 (ii) Carlisle production will increase in 2017 and (iii) sometime in 2019, the Carlisle Mine will return to its normal production capacity of three million tons per year. If, in later quarters, we reduce our estimate of the future net cash flows attributable to the Carlisle Mine, it may result in future impairment of such assets and such charges could be significant.

Current Projects

All of our underground coal reserves are high sulfur (4.5 - 6#) with a BTU content in the 11,200 -11,500 range. 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.

As discussed below, the Ace surface mine is low sulfur (1.5#) with a BTU content of 11,400. We have no met coal reserves, only steam (thermal) coal reserves. Below is a discussion of our current projects preceded by a table of our coal reserves.

Reserve Table - Controlled Tons (in millions):

	2014 Year-End Reserves
	Annual
	Capacity		Proven		Probable		Total
Carlisle (assigned)**		3.3		43.7		9.5		53.2
Ace in the Hole (assigned)		.5		2.7				2.7
Oaktown 1 (assigned)*		4.0		30.3		14.1		44.4
Oaktown 2 (assigned)*		4.0		47.6		15.3		62.9
Bulldog (unassigned)				19.6		16.2		35.8
Total		11.8		143.9		55.1		199.0
Assigned								163.2
Unassigned								35.8
								199.0

^{* Oaktown 1 and 2 were acquired on August 29, 2014.}

^{** It is estimated that approximately 9 million tons of proven and probable Carlisle reserves will be mined from the Oaktown 2 portal in the future.}

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Carlisle Mine (underground) – Assigned

Our coal reserves at December 31, 2014 assigned to the Carlisle Mine were 53 million tons. The mine, located near Carlisle, Indiana in Sullivan County became operational in January 2007. The coal is accessed with a slope to a depth of 340'. The coal is mined out of the Indiana Coal V seam, which is highly volatile bituminous coal and is the most economical in Indiana.  The Indiana V seam has been extensively mined by underground and surface methods in the general area. The coal thickness in the project area is 4' to 7'.

Ace in the Hole Mine (Ace) (surface) – Assigned

In November 2012, we purchased for $6 million permitted fee coal reserves, coal leases and surface properties near Clay City, Indiana in Clay County. The Ace mine is 42 road miles northeast of the Carlisle Mine. We control 2.7 million tons of proven coal reserves of which we own .9 million tons in fee.  We mine two primary seams of low sulfur coal, which make up 2.6 million of the 2.7 million tons controlled.  Both of the primary seams are low sulfur (<2# SO₂). Mine development began in late December 2012, and we began shipping coal in late August 2013.  We truck low sulfur coal from Ace to Carlisle and/or Oaktown to blend with high sulfur coal. Many utilities in the southeastern U.S. have scrubbers with lower sulfur limits (4# SO₂) which cannot accept the higher sulfur contents of the ILB (4.5# - 6# SO₂). Blending high sulfur coal to a lower sulfur specification enables us to market our high sulfur coals to more customers. We also expect to ship low sulfur coal from Ace direct to unscrubbed customers that require low sulfur (1.5# SO₂). We expect the maximum capacity of Ace to be 500,000 tons annually.

The Ace mine is a multi-seam open pit strip mine. The majority of the seams are sold raw, but some of the seams will be washed prior to sales depending on quality. To convert the tons sold raw the in-place tonnage is taken times a pit recovery of 94% based on seam thickness. To convert the tons sold washed the in-place tonnage is taken times a pit recovery based on seam thickness then reduced by the projected plant recovery of 72%.

Oaktown 1 Mine (underground) – Assigned

We have 44 million tons controlled and rated proved and probable of the Indiana coal V seam. All reserves are located in Knox County, Indiana. Access to the Oaktown 1 mine is via a 90’ deep box cut and a 2,200’ slope on a 14% grade, reaching coal in excess of 375’ below the surface.  

Oaktown 2 Mine / War Eagle reserve (underground) – Assigned

We have 63 million tons controlled and rated proved and probable of the Indiana coal V seam. All reserves are located in Knox County, Indiana and Lawrence County, Illinois. Access to the Oaktown 2 mine is via an 80’ deep box cut and a 2,600’ slope on a 14% grade, reaching coal in excess of 400’ below the surface.

Our underground mines are room and pillar mines meaning that main airways and transportation entries are developed and maintained while remote-controlled continuous miners extract coal from so-called rooms by removing coal from the seam, leaving pillars to support the roof.  Shuttle cars or similar transportation are used to transport coal to a conveyor belt for transport to the surface.  The two Oaktown mines are separated by a sandstone channel.  The coal seam thickness ranges from 4’ to over 9’.  The mine’s wash plant has a capacity of 1,800 tons per hour.  The two mines are connected to a railway equipped to handle 110 to 120 car unit trains.  Coal is also transported via truck to customers.

15

Bulldog Mine (underground) – Unassigned

We have leased roughly 19,300 acres in Vermilion County, Illinois near the village of Allerton.  Based on our reserve estimates we currently control 35.8 million tons of coal reserves. A considerable amount of our leased acres has yet to receive any exploratory drilling, thus we anticipate our controlled reserves to grow as we continue drilling.  The permitting process was started in the summer of 2011, and we filed the formal permit with the state of Illinois and the appropriate Federal regulators during June 2012.  In July 2014, we were notified by the Illinois Department of Natural Resources (ILDNR) that our permit had been deemed complete which starts the timeline for the ILDNR public review process. It is our estimation that our permit will be approved in 2015.

Full-scale mine development will not commence until we have a sales commitment. We estimate the costs to develop this mine to be $150 million at full capacity of three million tons annually.

Unassigned reserves represent coal reserves that would require new mineshafts, mining equipment, and plant facilities before operations could begin on the property. The primary reason for this distinction is to inform investors which coal reserves will require substantial capital expenditures before production can begin.

Mine and Wash Plant Recovery Rates Used in Reserve Estimates

	Mine recovery			Wash plant recovery*
Carlisle		53	%		81	%
Bulldog		45	%		77	%
Oaktown 1		49	%		81	%
Oaktown 2		49	%		81	%

* Does not include out-of-seam material extracted during the mining process.

Liquidity and Capital Resources

Our maintenance capex budget for the 4^th quarter of 2015 is $4.5 million. Cash from operations should fund these expenditures.

We have no material off-balance sheet arrangements.

Capital Expenditures (capex)

Capex for the first nine months of 2015 was $27 million allocated as follows (in thousands):

Carlisle & Oaktown - maintenance capex (approximately $3.79/ton)	$	21,824
Other projects		5,285
Capex per the Consolidated Condensed Statement of Cash Flows	$	27,109

We expect maintenance capex/ton for the remainder of 2015 to be around $3/ton.

Results of Operations

In the third quarter, we made progress in lowering our cash costs going forward. Oaktown’s cash costs for the 3^rd quarter were $28.13/ton. Over the course of 4^th quarter 2015 and 1^st quarter 2016 our mining plan will lead us to higher recovery coal. Thus, we are still targeting $27/ton cash costs in 2016. Going forward we expect our SG&A to be $12 million annually and costs associated with Prosperity and Carlisle to be $7.5 million annually.

16

Beginning August 29, 2014, the tables below include the mines acquired from Vectren.

Quarterly coal sales and cost data (in thousands except for per ton data):

	4th 2014		1st 2015		2nd 2015		3rd 2015		T4Qs
Tons sold		2,275		2,146		2,078		1,791		8,290
Coal sales	$	99,992	$	97,073	$	95,323	$	81,332	$	373,720
Average price/ton		43.95		45.23		45.87		45.41		45.08
Wash plant recovery in %		67		67		69		69
Operating costs	$	67,367	$	66,152	$	68,280	$	56,995	$	258,794
Average cost/ton		29.61		30.83		32.86		31.82		31.22
Margin		32,625		30,921		27,043		24,337		114,926
Margin/ton		14.34		14.40		13.01		13.59		13.86
Capex		11,509		8,250		14,789		4,070		38,618
Maintenance capex		11,162		6,685		13,323		1,816		32,986
Maintenance capex/ton		4.91		3.12		6.41		1.01		3.98

	4th 2013		1st 2014		2nd 2014		3rd 2014		T4Qs
Tons sold		757		776		847		1,500		3,880
Coal sales	$	34,307	$	33,016	$	36,130	$	64,764	$	168,217
Average price/ton		45.32		42.55		42.66		43.18		43.35
Wash plant recovery in %		63		66		68		64
Operating costs	$	24,202	$	23,005	$	26,096	$	52,588	$	125,891
Average cost/ton		31.97		29.65		30.81		35.06		32.44
Margin		10,105		10,011		10,034		12,176		42,326
Margin/ton		13.35		12.90		11.85		8.12		10.91
Capex		7,834		2,936		6,190		5,200		22,160
Maintenance capex		2,721		2,650		3,974		4,756		14,101
Maintenance capex/ton		3.59		3.41		4.69		3.17		3.63

First Nine Months 2015 vs. 2014

For the first nine months of 2015, we sold 6,015,000 tons at an average price of $45.51/ton.  For the first nine months of 2014, we sold 3,123,000 tons at an average price of $42.88/ton. The higher average price for the first nine months of 2015 is due to the mix of our various contracts. As previously discussed, we expect prices for the last quarter of 2015 to average $45.29.

Operating costs and expenses averaged $31.82/ton in 2015 compared to $32.56 in 2014.

SG&A increased due to purchasing Vectren Fuels. SG&A as a percentage of coal revenue decreased from 5.4% to 3.4% and SG&A per ton of coal sold decreased from $2.31 to $1.57. Included in SG&A are non-cash charges related to RSU amortization of $1.8 million for 2015 and $1.6 million for 2014.

17

Third Quarter 2015 vs. 2014

For the third quarter of 2015, we sold 1,791,000 tons at an average price of $45.41/ton.  For the third quarter of 2014, we sold 1,500,000 tons at an average price of $43.18/ton.

Operating costs and expenses averaged $31.82/ton in 2015 compared to $35.06 in 2014.  

As mentioned above, SG&A increased due to purchasing Vectren Fuels.  SG&A as a percentage of coal revenue decreased from 3.9% to 3.7% and SG&A per ton of coal sold for 2015 and 2014 were approximately the same at $1.67. Included in SG&A are non-cash charges related to RSU amortization of $586,000 for 2015 and $488,000 for 2014.

Net Income (Loss) per Share

	4th 2014		1st 2015		2nd  2015		3rd  2015
Basic and diluted	$	.33	$	.25	$	.23	$	.17

	4th 2013		1st  2014		2nd 2014		3rd  2014
Basic and diluted	$	.16	$	.12	$	.10	$	(.20	)

MSHA Reimbursements

Some of our legacy coal contracts allow us to pass on certain costs incurred resulting from changes in costs to comply with mandates issued by MSHA or other government agencies. We do not recognize any revenue until customers have notified us that they accept the charges.  

We submitted our incurred costs for 2011 in October 2012 for $3.7 million. $2.1 million in reimbursements were recorded in the first quarter 2013 and $1.6 million were recorded in the fourth quarter of 2013.  Based on past experience, we expect to collect the 2012 costs in 2015. We submitted our incurred costs for 2012 in June 2015. We expect to receive over $3 million; as stated above we do not record such reimbursements until they have been agreed to by our customers.

Income Taxes

Our effective tax rate (ETR) for 2014 was 4.5%. The low ETR for 2014 was due primarily to the reduction in the Indiana state income tax rate. For 2015, we estimate our ETR to be circa 25%.

40% Ownership in Savoy

We currently own a 40% interest in Savoy Energy, L.P., a private company engaged in the oil and gas business primarily in the state of Michigan. Savoy uses the successful efforts method of accounting. Our 45% ownership was decreased to 40% on October 1, 2014 due to the exercise of options by Savoy’s management. We account for our interest using the equity method of accounting.

Our share of Savoy’s income dropped due to the precipitous drop in oil prices. 

18

Critical Accounting Estimates

See Note 9, "Asset Realization", to our consolidated financial statements for a discussion of estimates pertaining to our Carlisle mine.

Other estimates are of our coal reserves and our deferred tax assets and liability accounts. The reserve estimates are used in the DD&A calculation, in our impairment test if and when circumstances indicate the need for measurement, and in our internal cash flow projections.  If these estimates turn out to be materially under or overstated, our DD&A expense and impairment test may be affected. Furthermore, if our coal reserves are materially overstated, our liquidity and stock price could be adversely affected.

We account for business combinations using the purchase method of accounting. The purchase method requires us to determine the fair value of all acquired assets, including identifiable intangible assets and all assumed liabilities. The total cost of acquisitions is allocated to the underlying identifiable net assets, based on their respective estimated fair values. Determining the fair value of assets acquired and liabilities assumed requires management's judgment and the utilization of independent valuation experts, and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates and asset lives, among other items. The fair value of our interest rate swaps is determined using a discounted future cash flow model based on the key assumption of anticipated future interest rates.

We have analyzed our filing positions in all of the federal and state jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. We identified our federal tax return and our Indiana state tax return as “major” tax jurisdictions.  During 2012, the IRS completed an examination of our 2009 and 2010 federal tax returns and there were no significant adjustments.  During 2012, the State of Indiana completed their examination of our 2008-2010 returns and no adjustments were proposed.  We believe that our income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change to our consolidated financial position. 

Yorktown Distributions

As previously disclosed, Yorktown Energy Partners and its affiliated partnerships (Yorktown) have made 11 distributions to their numerous partners totaling 7.3 million shares since May 2011. In the past, these distributions were made soon after we filed our Form 10-Qs and Form 10-Ks. Currently, Yorktown owns 7.85 million shares of our stock representing about 27% of total shares outstanding. Yorktown last distributed shares in August 2015.

We have been informed by Yorktown that they have not made any determination as to the disposition of their remaining Hallador stock. While we do not know Yorktown’s ultimate strategy to realize the value of their Hallador investment for their partners, we expect that over time such distributions will increase our liquidity and float.

If we are advised of another Yorktown distribution, we will timely report such on a Form 8-K.

New Accounting Pronouncements

None of the recent FASB pronouncements will have any material effect on us.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are not required to provide the information required by this item but it will be required in the Form 10-K.

19

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls

We maintain a system of disclosure controls and procedures that are designed for the purposes of ensuring that information required to be disclosed in our SEC reports is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our CEO and CFO as appropriate to allow timely decisions regarding required disclosure.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, our CEO and CFO concluded that our disclosure controls and procedures are effective for the purposes discussed above.

There have been no changes to our internal control over financial reporting during the quarter ended September 30, 2015 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 4. MINE SAFETY DISCLOSURE

See Exhibit 95 to this Form 10-Q for a listing of our mine safety violations.

ITEM 6. EXHIBITS

15	Letter Regarding Unaudited Interim Financial Information
31	SOX 302 Certifications
32	SOX 906 Certification
95	Mine Safety Report
101	Interactive Files

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	HALLADOR ENERGY COMPANY
Date: November 6, 2015	/s/	W. Anderson Bishop
		W. Anderson Bishop, CFO and CAO

20

EX-15

Exhibit 15 Letter Regarding Unaudited Interim Financial Information

Hallador Energy Company

We have reviewed, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the unaudited interim financial information of Hallador Energy Company for the periods ended September 30, 2015, and 2014, as indicated in our report dated November 6, 2015; because we did not perform an audit, we expressed no opinion on that information.

We are aware that our report referred to above, which is included in your Form 10-Q for the quarter ended September 30, 2015, is incorporated by reference in Registration Statement Nos. 333-163431 and 333-171778 of Hallador Energy Company on Form S-8.

We also are aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act.

/s/ EKS&H LLLP

November 6, 2015

Denver, Colorado

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Brent K. Bilsland, certify that:

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. 

November 6, 2015	/s/	Brent K. Bilsland
		Brent K. Bilsland, President and CEO

EX-31.2

Exhibit 31.2

CERTIFICATION

I, W. Anderson Bishop, certify that:

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. 

November 6, 2015	/s/	W. Anderson Bishop
		W. Anderson Bishop, CFO

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report (the "Report"), of Hallador Energy Company (the "Company"), on Form 10-Q for the period ended September 30, 2015, as filed with the Securities and Exchange Commission on the date hereof the undersigned, in the capacities and date indicated below, each hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

(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.

November 6, 2015	By:	/s/ Brent K. Bilsland
		Brent K. Bilsland, President and CEO
		/s/ W. Anderson Bishop
		W. Anderson Bishop, CFO

EX-95

Exhibit 95 Mine Safety Disclosure

Our principles are safety, honesty, and compliance. We firmly believe that these values compose a dedicated workforce and with that, come high production. The core to this is our strong training programs that include accident prevention, workplace inspection and examination, emergency response, and compliance. We work with the Federal and State regulatory agencies to help eliminate safety and health hazards from our workplace and increase safety and compliance awareness throughout the mining industry.  Sunrise has not had a fatality since its establishment in 2005.

Sunrise is regulated by the MSHA under the Federal Mine Safety and Health Act of 1977 (“Mine Act”). MSHA inspects our mine on a regular basis and issues various citations and orders when it believes a violation has occurred under the Mine Act. We present information below regarding certain violations which MSHA has issued with respect to our mine. While assessing this information please consider that the number and cost of violations will vary depending on the MSHA inspector and can be contested and appealed, and in that process, are often reduced in severity and amount, and are sometimes dismissed. We are currently contesting no MSHA citations.

Sunrise has not been issued written notice from MSHA of a pattern of, or the potential to have a pattern of, violations of mandatory health or safety standards that are of such a nature as could significantly and substantially cause and effect health or safety standards under section 104(e) of the Mine Act.

The table that follows outlines citations and orders issued to us by MSHA during the first nine months of 2015. The citations and orders outlined below may differ from MSHA`s data retrieval system due to timing, special assessed citations, and other factors.

Definitions:

Section 104(a) Significant and Substantial Citations “S&S”: An alleged violation of a mining safety or health standard or regulation where there exists a reasonable likelihood that the hazard outlined will result in an injury or illness of a serious nature.

Section 104(b) Orders:  Failure to abate a 104(a) citation within the period of time prescribed by MSHA. The result of which is an order of immediate withdraw of non-essential persons from the affected area until MSHA determines the violation has been corrected.

Section 104(d) Citations and Orders: An alleged unwarrantable failure to comply with mandatory health and safety standards.

Section 107(a) Orders: An order of withdraw for situations where MSHA has determined that an imminent danger exists.

Section 110(b) (2) Violations: An alleged flagrant violation issued by MSHA under section 110(b) (2) of the Mine Act.

Pattern or Potential Pattern of Violations: A pattern of violations of mandatory health or safety standards that are of such a nature as could have significantly and substantially contributed to the cause and effect of coal mine health or safety hazards under section 104(e) of the Mine Act or a potential to have such a pattern.

Contest of Citations, Orders, or Proposed Penalties: A contest proceeding may be filed with the Commission by the operator or miners/miners representative to challenge the issuance or penalty of a citation or order issued by MSHA.

 1

Carlisle Mine

	Section		Section		Section		Section		Section		Proposed
	104(a)		104(b)		104(d)		107(a)		110(b)(2)		MSHA
	Citations		Citations		Citations/Orders		Orders		Violations		Assessments
											(In thousands)
January		5		0		1		0		0	$	23.80
February		8		0		0		0		0		13.10
March		2		0		0		0		0		3.60
April		2		0		0		0		0		4.20
May		5		0		0		0		0		15.10
June		5		0		1		0		0		16.25
July		7		0		0		0		0		19.00
August		0		0		0		0		0		0.25
September		0		0		0		0		0		0.65
Totals		34		0		2		0		0	$	95.95

Ace in the Hole Mine

	Section		Section		Section		Section		Section		Proposed
	104(a)		104(b)		104(d)		107(a)		110(b)(2)		MSHA
	Citations		Citations		Citations/Orders		Orders		Violations		Assessments
											(In thousands)
January		0		0		0		0		0	$	0.00
February		0		0		0		0		0		0.00
March		0		0		0		0		0		0.10
April		0		0		0		0		0		0.00
May		0		0		0		0		0		0.00
June		0		0		0		0		0		0.10
July		0		0		0		0		0		0.00
August		0		0		0		0		0		0.10
September		0		0		0		0		0		0.00
Totals		0		0		0		0		0	$	0.30

 2

Carlisle Preparation Plant

	Section		Section		Section		Section		Section		Proposed
	104(a)		104(b)		104(d)		107(a)		110(b)(2)		MSHA
	Citations		Citations		Citations/Orders		Orders		Violations		Assessments
											(In thousands)
January		0		0		0		0		0	$	0.00
February		0		0		0		0		0		0.00
March		0		0		0		0		0		0.00
April		0		0		0		0		0		0.00
May		0		0		0		0		0		0.00
June		0		0		0		0		0		0.00
July		0		0		0		0		0		0.00
August		0		0		0		0		0		0.00
September		0		0		0		0		0		0.00
Totals		0		0		0		0		0	$	0.00

Oaktown Fuels No. 1

	Section		Section		Section		Section		Section		Proposed
	104(a)		104(b)		104(d)		107(a)		110(b)(2)		MSHA
	Citations		Citations		Citations/Orders		Orders		Violations		Assessments
											(In thousands)
January		5		0		0		0		0	$	12.80
February		9		0		0		0		0		12.20
March		1		0		0		0		0		2.10
April		2		0		0		0		0		4.40
May		3		0		0		0		0		6.90
June		0		0		0		0		0		0.20
July		3		0		0		0		0		12.15
August		9		0		3		0		0		71.15
September		7		0		0		0		0		18.50
Totals		39		0		3		0		0	$	140.40

 3

Oaktown Fuels No. 2

	Section		Section		Section		Section		Section		Proposed
	104(a)		104(b)		104(d)		107(a)		110(b)(2)		MSHA
	Citations		Citations		Citations/Orders		Orders		Violations		Assessments
											(In thousands)
January		1		0		0		0		0	$	1.15
February		3		0		0		0		0		6.20
March		4		0		0		0		0		2.20
April		2		0		0		0		0		1.80
May		2		0		0		0		0		5.55
June		4		0		0		0		0		7.00
July		6		0		0		0		0		12.55
August		6		0		0		0		0		9.00
September		7		0		0		0		0		11.10
Totals		35		0		0		0		0	$	56.55

Oaktown Fuels Preparation Plant

	Section		Section		Section		Section		Section		Proposed
	104(a)		104(b)		104(d)		107(a)		110(b)(2)		MSHA
	Citations		Citations		Citations/Orders		Orders		Violations		Assessments
											(In thousands)
January		0		0		0		0		0	$	0.00
February		1		0		0		1		0		0.60
March		1		0		0		0		0		0.50
April		0		0		0		0		0		0.00
May		0		0		0		0		0		0.00
June		0		0		0		0		0		0.00
July		0		0		0		0		0		0.00
August		0		0		0		0		0		0.20
September		0		0		0		0		0		0.10
Totals		2		0		0		1		0	$	1.40

 4

Prosperity Mine

	Section		Section		Section		Section		Section		Proposed
	104(a)		104(b)		104(d)		107(a)		110(b)(2)		MSHA
	Citations		Citations		Citations/Orders		Orders		Violations		Assessments
											(In thousands)
January		0		0		0		0		0	$	0.00
February		0		0		0		0		0		0.00
March		0		0		0		0		0		0.00
April		0		0		0		0		0		0.00
May		0		0		0		0		0		0.00
June		0		0		0		0		0		0.00
July		0		0		0		0		0		0.00
August		0		0		0		0		0		0.00
September		0		0		0		0		0		0.00
Totals		0		0		0		0		0	$	0.00

 5

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Investment in Sunrise Energy (Narrative) (Details)	Sep. 30, 2015
Sunrise Energy [Member]
Equity method investment ownership percentage	50.00%

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Investment in Savoy

9 Months Ended

Sep. 30, 2015

Savoy [Member]

Investment

(3)Investment in Savoy

We currently own a 40% interest in Savoy Energy, L.P., a private company engaged in the oil and gas business primarily in the state of Michigan.  Savoy uses the successful efforts method of accounting.  Our 45% ownership was decreased to 40% on October 1, 2014 due to the exercise of options by Savoy’s management.  We account for our interest using the equity method of accounting. 

Below (in thousands) to the 100% is a condensed balance sheet at September 30, and a condensed statement of operations for the nine months ended September 30, 2015 and 2014.

Condensed Balance Sheet
	2015
Current assets	$	11,709
Oil and gas properties, net		26,522
	$	38,231
Total liabilities	$	5,152
Partners’ capital		33,079
	$	38,231

Condensed Statement of Operations
	2015		2014
Revenue	$	10,887	$	32,135
Expenses		(11,156)		(19,423)
Net income (loss)	$	(269)	$	12,712

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Self Insurance (Details) $ in Millions	Sep. 30, 2015 site mi	Aug. 31, 2010 USD ($)
Self Insurance [Abstract]
Number of mining units with self-insured equipment	12
Area of self-insured mining units | mi	20
Mining equipment at historical cost | $		$ 250

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Other Long-Term Assets (Schedule of Other Long-Term Assets) (Details) - USD ($) $ in Thousands		Sep. 30, 2015	Dec. 31, 2014
Long-term assets:
Advance coal royalties		$ 6,506	$ 5,496
Deferred financing costs, net		5,461	6,507
Marketable equity securities available for sale, at fair value (restricted)	[1]	1,723	2,249
Other		2,782	4,597
Long-term assets		$ 16,472	$ 18,849

[1] Held by Sunrise Indemnity, Inc., our wholly owned captive insurance company.

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Net Income (Loss) per Share (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net Income (Loss) per Share [Abstract]
Net income (loss)	[1]	$ 5,144	$ (5,768)	$ 19,588	$ 826
Less earnings allocated to RSUs		(155)		(595)	(23)
Net income (loss) available to common shareholders		$ 4,989	$ (5,768)	$ 18,993	$ 803

[1] There is no material difference between net income (loss) and comprehensive income (loss).

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Vectren Fuels Acquisition (Narrative) (Details) $ in Millions	Aug. 29, 2014 USD ($)
Vectren Fuels [Member]
Business Acquisition [Line Items]
Business acquisition purchase price	$ 311

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Bank Debt

9 Months Ended

Sep. 30, 2015

Bank Debt [Abstract]

Bank Debt

(2)Bank Debt

To finance the August 2014 Vectren Fuels acquisition, we entered into a credit agreement with PNC Bank as administrative agent for a group of several other banks.  The credit agreement allows for a $250 million revolver and a $175 million term loan.  Our debt at September 30, 2015 was $266 million (term-$146, revolver-$120).  The maximum that we could borrow at September 30, 2015 was $311 million due to the covenants.  The credit facility is collateralized by substantially all of Sunrise’s assets and we are the guarantor.  Bank fees and other costs incurred in connection with this new facility were about $6.8 million, which were deferred and are being amortized over five years. 

All borrowings under the credit agreement bear interest at LIBOR (20 bps at September 30, 2015) plus 2.25% if the leverage ratio (debt/EBITDA) is less than 1X; LIBOR plus 2.5% if the leverage ratio is over 1X but less than 1.5X; LIBOR plus 2.75% if the ratio is over 1.5X but less than 2X; LIBOR plus 3% if the ratio is over 2X but less than 2.5X and at LIBOR plus 3.5% if the leverage ratio is over 2.5X.  The computed ratio at September 30, 2015 was 2.58X.  The leverage ratio is currently 3.50X.  We entered into swap agreements to fix the LIBOR component of the interest rate to achieve an effective fixed rate of no greater than 5% on 100% ($175 million) of the term loan and on $100 million of the revolver.  The term loan swap steps down in unison with the term loan payment and the revolver swap steps down 10% each quarter commencing March 31, 2016.  At September 30, 2015, these two interest rate swaps had an estimated fair value current liability of $2.5 million included in accounts payable and accrued liabilities.

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.  Any non-tax cash distributions from Savoy are required to be applied toward the debt.  The term loan requires quarterly payments with annual amortization at 10% (2015), 15% (2016), 15% (2017), 20% (2018), and 20% (2019) with a balloon at maturity.

The credit agreement matures on August 29, 2019, but we have the right to prepay the loan at any time without penalty.

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Asset Realization (Narrative) (Details) - Carlisle Assets [Member] $ in Thousands, T in Millions	9 Months Ended
	Sep. 30, 2015 USD ($) T
Impairment Effects on Earnings Per Share [Line Items]
Mine carring value	$ 177,000
Asset impairment charge	$ 0
Asset impairment assumption, normal production capacity per year | T	3

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Consolidated Balance Sheet - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 19,503	$ 13,469
Marketable securities	1,427	1,656
Accounts receivable	26,124	27,297
Income tax receivable	4,835	5,791
Coal inventory	10,704	19,722
Parts and supply inventory	12,982	14,919
Other	1,467	1,555
Total current assets	77,042	84,409
Coal properties, at cost:
Land and mineral rights	115,963	116,025
Buildings and equipment	346,493	323,758
Mine development	127,745	124,435
Total coal properities, at cost	590,201	564,218
Less - accumulated DD&A	(138,949)	(106,608)
Total coal properties, net	451,252	457,610
Other assets (Note 5)	16,472	18,849
Total assets	563,398	579,585
Current liabilities:
Current portion of bank debt	26,250	21,875
Accounts payable and accrued liabilities	28,922	28,105
Total current liabilities	55,172	49,980
Long-term liabilities:
Bank debt	239,783	284,470
Deferred income taxes	46,883	41,581
Asset retirement obligations	12,103	12,074
Other	2,110	1,605
Total long-term liabilities	300,879	339,730
Total liabilities	$ 356,051	$ 389,710
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.10 par value, 10,000 shares authorized; none issued
Common stock, $.01 par value, 100,000 shares authorized; 29,058 and 28,962, shares outstanding, respectively	$ 290	$ 289
Additional paid-in capital	92,123	90,218
Retained earnings	114,995	99,003
Accumulated other comprehensive income (loss)	(61)	365
Total stockholders' equity	207,347	189,875
Total liabilities and stockholders' equity	563,398	579,585
Savoy [Member]
Current assets:
Total current assets	11,709
Coal properties, at cost:
Investment in subsidiaries	13,787	13,896
Total assets	38,231
Long-term liabilities:
Total liabilities	5,152
Stockholders' equity:
Total liabilities and stockholders' equity	38,231
Sunrise Energy [Member]
Current assets:
Total current assets	2,325
Coal properties, at cost:
Investment in subsidiaries	4,845	$ 4,821
Total assets	10,456
Long-term liabilities:
Total liabilities	777
Stockholders' equity:
Total liabilities and stockholders' equity	$ 10,456

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Consolidated Statement of Stockholders' Equity - 9 months ended Sep. 30, 2015 - USD ($) shares in Thousands, $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	[1]	Total
Balance at Dec. 31, 2014	$ 289	$ 90,218	$ 99,003	$ 365		$ 189,875
Balance (in Shares) at Dec. 31, 2014	28,962
Stock-based compensation		2,362				2,362
Stock issued on vesting of RSUs	$ 1					1
Stock issued on vesting of RSUs (in Shares)	127
Taxes paid on RSU vesting		(543)				(543)
Taxes paid on RSU vesting, in shares	(45)
Dividends			(3,596)			(3,596)
Net income (loss)			19,588			19,588	[2]
Other	$ 14	86		(426)		(340)
Balance at Sep. 30, 2015	$ 290	$ 92,123	$ 114,995	$ (61)		$ 207,347
Balance (in Shares) at Sep. 30, 2015	29,058

[1] Accumulated Other Comprehensive Income (Loss)

[2] There is no material difference between net income (loss) and comprehensive income (loss).

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Investment in Savoy (Narrative) (Details)	Sep. 30, 2015	Sep. 30, 2014
Savoy [Member]
Equity method investment ownership percentage	40.00%	45.00%

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Investment in Savoy (Condensed Statement of Operations - Savoy) (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Revenue		$ 82,013	$ 66,322	$ 275,267	$ 140,549
Expenses		(76,203)	(73,531)	(249,146)	(139,546)
Net income (loss)	[1]	$ 5,144	$ (5,768)	19,588	826
Savoy [Member]
Revenue				10,887	32,135
Expenses				(11,156)	(19,423)
Net income (loss)				$ (269)	$ 12,712

[1] There is no material difference between net income (loss) and comprehensive income (loss).

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General Business

9 Months Ended

Sep. 30, 2015

General Business [Abstract]

General Business

(1)General Business

The interim financial data is unaudited; however, in our opinion, it includes all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the results for the interim periods.  The financial statements included herein have been prepared pursuant to the SEC’s rules and regulations; accordingly, certain information and footnote disclosures normally included in GAAP financial statements have been condensed or omitted.

The results of operations and cash flows for the nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for future quarters or for the year ending December 31, 2015.  To maintain consistency and comparability, certain 2014 amounts have been reclassified to conform to the 2015 presentation.

Our organization and business, the accounting policies we follow and other information, are contained in the notes to our consolidated financial statements filed as part of our 2014 Form 10-K. This quarterly report should be read in conjunction with such 10-K.

The consolidated financial statements include the accounts of Hallador Energy Company and its wholly owned subsidiary, Sunrise Coal, LLC (Sunrise), and Sunrise’s wholly owned subsidiaries.  All significant intercompany accounts and transactions have been eliminated.  We are engaged in the production of steam coal from mines located in western Indiana.  We own a 40% equity interest in Savoy Energy, L.P., a private oil and gas company, which has operations in Michigan and a 50% interest in Sunrise Energy, LLC, a private entity engaged in shale and coalbed methane operations in the same vicinity as the Carlisle Mine.

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Consolidated Balance Sheet (Parentheticals) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Preferred stock, authorized	10,000,000	10,000,000
Preferred stock, par value (in dollars per share)	$ 0.10	$ 0.10
Preferred stock, issued	0	0
Common stock, shares authorized	100,000,000	100,000,000
Common stock,par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, outstanding	29,058,000	28,962,000

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Investment in Sunrise Energy (Tables) - Sunrise Energy [Member]

9 Months Ended

Sep. 30, 2015

Condensed Balance Sheet

Condensed Balance Sheet
	2015
Current assets	$	2,325
Oil and gas properties, net		8,131
	$	10,456
Total liabilities	$	777
Members’ capital		9,679
	$	10,456

Condensed Statement of Operations

Condensed Statement of Operations
	2015		2014
Revenue	$	1,773	$	2,328
Expenses		(1,725)		(1,945)
Net income	$	48	$	383

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Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 05, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	HALLADOR ENERGY COMPANY
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		29,059,271
Amendment Flag	false
Entity Central Index Key	0000788965
Entity Filer Category	Accelerated Filer
Document Period End Date	Sep. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Trading Symbol	HNRG

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Other Long-Term Assets (Tables)

9 Months Ended

Sep. 30, 2015

Other Long-Term Assets [Abstract]

Schedule of Long-Term Assets

	September 30,		December 31,
	2015		2014
Long-term assets:
Advance coal royalties	$	6,506	$	5,496
Deferred financing costs, net		5,461		6,507
Marketable equity securities available for sale, at fair value (restricted)*		1,723		2,249
Other		2,782		4,597
	$	16,472	$	18,849

____________________

*Held by Sunrise Indemnity, Inc., our wholly owned captive insurance company

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Consolidated Statement of Operations shares in Thousands, $ in Thousands		3 Months Ended			9 Months Ended
		Sep. 30, 2015 USD ($) $ / shares $ / T shares		Sep. 30, 2014 USD ($) $ / shares shares	Sep. 30, 2015 USD ($) $ / shares shares	Sep. 30, 2014 USD ($) $ / shares shares
Revenue:
Coal sales		$ 81,332		$ 64,764	$ 273,728	$ 133,910
Other		753		237	1,625	717
Revenue		82,013		66,322	275,267	140,549
Costs and expenses:
Operating costs and expenses		56,995	[1]	52,588	191,427	101,689
DD&A		10,648		6,979	32,756	17,131
Coal exploration costs		381		716	1,581	1,907
SG&A		3,003		2,511	9,427	7,220
Interest	[2]	5,176		1,825	13,955	2,687
Acquisition deal costs				8,912		8,912
Costs and expenses		76,203		73,531	249,146	139,546
Income (loss) before income taxes		5,810		(7,209)	26,121	1,003
Less income taxes:
Current		680		(157)	1,231	4,244
Deferred		(14)		(1,284)	5,302	(4,067)
Income taxes		666		(1,441)	6,533	177
Net income (loss)	[3]	$ 5,144		$ (5,768)	$ 19,588	$ 826
Net income per share: (Note 7)
Basic and diluted (in Dollars per share) | $ / shares		$ 0.17		$ (0.20)	$ 0.65	$ 0.03
Weighted average shares outstanding:
Basic and diluted (in Shares) | shares		29,044		28,772	29,011	28,766
Net change in the estimated fair value of interest rate swap		$ 1,251			$ 1,858
Savoy [Member]
Revenue:
Equity income (loss)		(93)		$ 1,217	(110)	$ 5,731
Revenue					10,887	32,135
Costs and expenses:
Costs and expenses					11,156	19,423
Less income taxes:
Net income (loss)					(269)	12,712
Sunrise Energy [Member]
Revenue:
Equity income (loss)		$ 21		$ 104	24	191
Revenue					1,773	2,328
Costs and expenses:
Costs and expenses					1,725	1,945
Less income taxes:
Net income (loss)					$ 48	$ 383
Oaktown [Member]
Weighted average shares outstanding:
Operating costs per ton | $ / T		28.13

[1] Oaktown's operating costs for the 3rd quarter 2015 were $28.13/ton.

[2] Included in interest expense is the change in the estimated fair value of our interest rate swaps. For the nine and three months ended September 30, 2015 such amounts were $1,858 and $1,251, respectively.

[3] There is no material difference between net income (loss) and comprehensive income (loss).

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Self Insurance

9 Months Ended

Sep. 30, 2015

Self Insurance [Abstract]

Self Insurance

(6)Self Insurance

In late August 2010, we decided to self-insure our underground mining equipment.  Such equipment is allocated among 12 mining units spread out over 20 miles.  The historical cost of such equipment is approximately $250 million.

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Other Long-Term Assets

9 Months Ended

Sep. 30, 2015

Other Long-Term Assets [Abstract]

Other Long Term Assets

(5)Other Long-Term Assets (in thousands)

	September 30,		December 31,
	2015		2014
Long-term assets:
Advance coal royalties	$	6,506	$	5,496
Deferred financing costs, net		5,461		6,507
Marketable equity securities available for sale, at fair value (restricted)*		1,723		2,249
Other		2,782		4,597
	$	16,472	$	18,849

____________________

*Held by Sunrise Indemnity, Inc., our wholly owned captive insurance company.

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Investment in Savoy (Condensed Balance Sheet - Savoy) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current assets	$ 77,042	$ 84,409
Total assets	563,398	579,585
Total liabilities	356,051	389,710
Total liabilities and stockholders' equity	563,398	$ 579,585
Savoy [Member]
Current assets	11,709
Oil and gas properties, net	26,522
Total assets	38,231
Total liabilities	5,152
Partners' capital	33,079
Total liabilities and stockholders' equity	$ 38,231

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Net Income (Loss) per Share (Tables)

9 Months Ended

Sep. 30, 2015

Net Income (Loss) per Share [Abstract]

Computation of Earnings per Share

The following table sets forth the computation of net income (loss) allocated to common shareholders for the nine and three months ended September 30, 2015 and 2014 (in thousands): 

	Nine months ended September 30,				Three months ended September 30,
		2015		2014		2015		2014
Numerator:
Net income (loss)	$	19,588	$	826	$	5,144	$	(5,768)
Less earnings allocated to RSUs		(595)		(23)		(155)
Net income (loss) allocated to common shareholders	$	18,993	$	803	$	4,989	$	(5,768)

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Asset Realization

9 Months Ended

Sep. 30, 2015

Asset Realization [Abstract]

Asset Realization

(9)Asset Realization

The Carlisle assets had an aggregate carrying value of $177 million at September 30, 2015.  Considering the modifications to our coal contracts and the reduction in force as discussed in the MD&A section, we conducted review of those assets for recoverability, and determined that no impairment charge was necessary.  In conducting such review, we assumed (i) that natgas prices will start to increase in late 2016 (ii) Carlisle production will increase in 2017 and (iii) sometime in 2019, the Carlisle Mine will return to its normal production capacity of three million tons per year. If, in later quarters, we reduce our estimate of the future net cash flows attributable to the Carlisle Mine, it may result in future impairment of such assets and such charges could be significant.

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Net Income (Loss) per Share

9 Months Ended

Sep. 30, 2015

Net Income (Loss) per Share [Abstract]

Net Income (Loss) per Share

(7)Net Income (Loss) per Share

We compute net income (loss) per share using the two-class method, which is an allocation formula that determines net income (loss) per share for common stock and participating securities, which for us are our outstanding RSUs. Outstanding RSUs have been excluded from the calculation of diluted weighted average shares outstanding because the impact would be anti-dilutive.

The following table sets forth the computation of net income (loss) allocated to common shareholders for the nine and three months ended September 30, 2015 and 2014 (in thousands): 

	Nine months ended September 30,				Three months ended September 30,
		2015		2014		2015		2014
Numerator:
Net income (loss)	$	19,588	$	826	$	5,144	$	(5,768)
Less earnings allocated to RSUs		(595)		(23)		(155)
Net income (loss) allocated to common shareholders	$	18,993	$	803	$	4,989	$	(5,768)

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Vectren Fuels Acquisition

9 Months Ended

Sep. 30, 2015

Vectren Fuels Acquisition [Abstract]

Vectren Fuels Acquisition

(8)Vectren Fuels Acquisition

On August 29, 2014, we consummated the acquisition of all the common stock of Vectren Fuels, Inc. for $311 million, which was accounted for as a business acquisition requiring measurement of acquired assets and assumed liabilities at their estimated fair value in applying purchase accounting.  The estimated fair values are based on market participant assumptions.  

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Investment in Savoy (Tables) - Savoy [Member]

9 Months Ended

Sep. 30, 2015

Condensed Balance Sheet

Condensed Balance Sheet
	2015
Current assets	$	11,709
Oil and gas properties, net		26,522
	$	38,231
Total liabilities	$	5,152
Partners’ capital		33,079
	$	38,231

Condensed Statement of Operations

Condensed Statement of Operations
	2015		2014
Revenue	$	10,887	$	32,135
Expenses		(11,156)		(19,423)
Net income (loss)	$	(269)	$	12,712

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Bank Debt (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Debt Instrument [Line Items]
Maximum leverage ratio	350.00%
Leverage ratio	258.00%
Debt maturity date	Aug. 29, 2019
Interest rat swaps net fair value	$ 2,500,000
PNC Bank [Member]
Debt Instrument [Line Items]
Closing costs of debt	$ 6,800,000
Loan initiation amortization period	5 years
Credit agreement, amount outstanding	$ 266,000,000
Credit facility, maximum borrowing capacity	311,000,000
Revolving Credit Facility [Member] | PNC Bank [Member]
Debt Instrument [Line Items]
Credit agreement, amount outstanding	120,000,000
Credit facility, maximum borrowing capacity	$ 250,000,000
Term Loan [Member] | Debt Instrument, Redemption, Period Five [Member]
Debt Instrument [Line Items]
Loan annual amortization	20.00%
Term Loan [Member] | Debt Instrument, Redemption, Period Four [Member]
Debt Instrument [Line Items]
Loan annual amortization	20.00%
Term Loan [Member] | Debt Instrument, Redemption, Period One [Member]
Debt Instrument [Line Items]
Loan annual amortization	10.00%
Term Loan [Member] | Debt Instrument, Redemption, Period Three [Member]
Debt Instrument [Line Items]
Loan annual amortization	15.00%
Term Loan [Member] | Debt Instrument, Redemption, Period Two [Member]
Debt Instrument [Line Items]
Loan annual amortization	15.00%
Term Loan [Member] | PNC Bank [Member]
Debt Instrument [Line Items]
Credit agreement, amount outstanding	$ 146,000,000
Debt face amount	$ 175,000,000
Sunrise Coal [Member] | PNC Bank [Member]
Debt Instrument [Line Items]
Percentage decrease in amount of debt with maximum interest rate per quarter after commencement date	10.00%
Date that the percentage of debt with a maximum interest rate begins to decrease quarterly	Mar. 31, 2016
Sunrise Coal [Member] | Maximum [Member] | PNC Bank [Member]
Debt Instrument [Line Items]
Interest rate maximum	5.00%
Sunrise Coal [Member] | Revolving Credit Facility [Member] | PNC Bank [Member]
Debt Instrument [Line Items]
Amount of debt with maximum interest rate	$ 100,000,000
Sunrise Coal [Member] | Term Loan [Member] | PNC Bank [Member]
Debt Instrument [Line Items]
Amount of debt with maximum interest rate	$ 175,000,000
Leverage Ratio Less Than 1 [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Debt, interest rate spread on variable rate	2.25%
Leverage Ratio Between 1 and 1.5 [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Debt, interest rate spread on variable rate	2.50%
Leverage Ratio Between 1.5 and 2 [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Debt, interest rate spread on variable rate	2.75%
Leverage Ratio Between 2 and 2.5 [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Debt, interest rate spread on variable rate	3.00%
Leverage Ratio Above 2.5 [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Debt, interest rate spread on variable rate	3.50%

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Investment in Sunrise Energy (Condensed Balance Sheet - Sunrise) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current assets	$ 77,042	$ 84,409
Total assets	563,398	579,585
Total liabilities	356,051	389,710
Total liabilities and stockholders' equity	563,398	$ 579,585
Sunrise Energy [Member]
Current assets	2,325
Oil and gas properties, net	8,131
Total assets	10,456
Total liabilities	777
Members' capital	9,679
Total liabilities and stockholders' equity	$ 10,456

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Consolidated Statement of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Operating activities:
Cash provided by operating activities	$ 76,573	$ 20,730
Investing activities:
Capital expenditures for coal properties	(27,109)	(14,326)
Acquisition		(319,762)
Other	478
Cash (used in) investing activities	(26,631)	(334,088)
Financing activities:
Dividends	(3,596)	(3,593)
Bank borrowings		350,000
Payments on bank debt	(40,312)	(20,375)
Other		(6,884)
Cash (used in) provided by financing activities	(43,908)	319,148
Increase in cash and cash equivalents	6,034	5,790
Cash and cash equivalents, beginning of period	13,469	16,228
Cash and cash equivalents, end of period	$ 19,503	$ 22,018

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Investment in Sunrise Energy

9 Months Ended

Sep. 30, 2015

Sunrise Energy [Member]

Investment

(4)Investment in Sunrise Energy

We own a 50% interest in Sunrise Energy, LLC, which owns gas reserves and gathering equipment with plans to develop and operate such reserves. Sunrise Energy also plans to develop and explore for coal-bed methane gas reserves on or near our underground coal reserves. They use the successful efforts method of accounting. We account for our interest using the equity method of accounting.

Below (in thousands) to the 100% is a condensed balance sheet at September 30, and a condensed statement of operations for the nine months ended September 30, 2015 and 2014. 

Condensed Balance Sheet
	2015
Current assets	$	2,325
Oil and gas properties, net		8,131
	$	10,456
Total liabilities	$	777
Members’ capital		9,679
	$	10,456

Condensed Statement of Operations
	2015		2014
Revenue	$	1,773	$	2,328
Expenses		(1,725)		(1,945)
Net income	$	48	$	383

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Investment in Sunrise Energy (Condensed Statement of Operations - Sunrise) (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Revenue		$ 82,013	$ 66,322	$ 275,267	$ 140,549
Expenses		(76,203)	(73,531)	(249,146)	(139,546)
Net income (loss)	[1]	$ 5,144	$ (5,768)	19,588	826
Sunrise Energy [Member]
Revenue				1,773	2,328
Expenses				(1,725)	(1,945)
Net income (loss)				$ 48	$ 383

[1] There is no material difference between net income (loss) and comprehensive income (loss).

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General Business (Details)	Sep. 30, 2015	Sep. 30, 2014
Savoy [Member]
Equity method investment ownership percentage	40.00%	45.00%
Sunrise Energy [Member]
Equity method investment ownership percentage	50.00%