HALLADOR ENERGY CO Q1 FY2025 earnings call

• The company is pleased with its first quarter performance, having achieved top-line growth, improved bottom-line results, and enhanced cash flow generation, reflecting the strength of its strategic shift to a vertically integrated independent power producer. • January and February were favorable due to colder weather and higher energy pricing, which led to increased dispatch volume. • Coal production improved during the first three months of the year as the 2024 restructuring efforts continued to take effect. • There has been meaningful progress in negotiations with a leading global data center developer, though it remains uncertain whether definitive agreements will be executed before the exclusivity period expires. The company is evaluating whether to grant an additional exclusivity period. • The company is actively exploring opportunities to acquire additional dispatchable assets to enhance scale, diversify the revenue stream, and strengthen its position in the evolving energy market. • It is currently evaluating the addition of natural gas co-firing at the Merom Power plant. While in the evaluation phase, co-firing with gas and/or coal would provide dual flexibility, help capitalize on favorable fuel cost scenarios, and enhance resiliency during periods of limited gas availability. • Approximately 3 million megawatt hours were contracted for the balance of 2025 at an average price of $37.20, and 3.4 million megawatt hours were contracted for 2026 at an average price of $44.43. • Coal operations are seeing improvements from the 2024 restructuring, with an expected production of approximately 3.8 million tons of coal this year, having delivered 1.1 million tons in the first quarter to Merom and other customers.

In the first quarter, electric sales amounted to $85.9 million, compared to $60.7 million in the prior year period. Coal sales were $54.8 million in the first quarter, versus $66 million in the prior year. The increase in electric sales was primarily due to new contracts in Q1 2025, higher energy pricing, and increased dispatch volumes. Coal sales declined as a result of the 2024 restructuring efforts. Electric sales contributed a significant portion to the total revenue, while coal sales also played a role in the overall financial picture.

• Approximately 3 million megawatt hours were contracted for the balance of 2025 at an average price of $37.20, and 3.4 million megawatt hours were contracted for 2026 at an average price of $44.43. • The company is optimistic about selling energy at higher prices in support of data center development and traditional wholesale customers in the future, including beyond 2026. • There is potential to increase coal production in the second half of 2025 or 2026 if market conditions support it.

• Uncertainty exists regarding whether definitive agreements will be executed with the data center developer before the current exclusivity period expires. • Forward-looking statements are subject to various risks, uncertainties, and assumptions, which could cause actual results to differ materially from projected outcomes.

Q: Given the request for an extension of the exclusivity period and other unsolicited offers, how should we consider renewing versus not renewing, and what would other potential customers compete on?

A: It is uncertain whether the deal will be completed before the expiration. The counterparty has requested an extension, and we are evaluating whether it is in the best interest of our shareholders to grant an extension or continue negotiating on a non-exclusive basis while considering other interests. We are encouraged by the interest from other parties despite making progress with the initial counterparty.

Q: With the EPR submitted by Hoosier having received approval, what are the final steps and other major considerations with the initial counterparty?

A: Our deal is in the final stages. The Hoosier's powered land development is a factor, but we should not overly focus on one powered land opportunity. Most major points have been negotiated, and now it comes down to the finer points being negotiated among the hyperscaler, developer, and other counterparties to align all aspects.

Q: Can you provide more color on the potential timing and capital intensity of natural gas co-firing, and if it is being pulled forward?

A: Current law requires co-firing by 2032, but the Trump administration is likely to roll back this requirement. We have been analyzing the feasibility of co-firing, having hired a contractor experienced in co-firing other power plants. We expect to update on the capital cost, timing, and feasibility in the future. It is feasible and probable to accomplish co-firing in a reasonable time frame, and this is currently in the early evaluation phase.