Greetings. Welcome to the Alliance Resource Partners, L.P. First Quarter 2023 Earnings Conference Call. At this time, all participants are on a listen only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Senior Vice President and Chief Financial Officer, Cary Marshall. You may begin. Thank you, operator, and welcome everyone. Earlier this morning, Alliance Resource Partners released its first quarter 2023 financial and operating results, and we will now discuss those results as well as our perspective on current market conditions and outlook for 2023. Following our prepared remarks, we will open the call to answer your questions. Before beginning, a reminder that some of our remarks today may include forward-looking statements subject to a variety of risks, uncertainties, and assumptions contained in our filings from time to time with the Securities and Exchange Commission and are also reflected in this morning's press release. While these forward-looking statements are based on information currently available to us, if one or more of these risks or uncertainties materialize, or if our underlying assumptions prove incorrect, actual results may vary materially from those we projected or expected. In providing these remarks, the partnership has no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, unless required by law to do so. Finally, we will also be discussing certain non-GAAP financial measures. Definitions and reconciliations of the differences between these non-GAAP financial measures and the most directly comparable GAAP financial measures are contained at the end of ARLP's press release, which has been posted on our website and furnished to the SEC on Form 8-K. With the required preliminaries out of the way, I will begin with a review of our results for the first quarter, then turn the call over to Joe Craft, our Chairman, President, and Chief Executive Officer, for his comments. First, let me briefly share how incredibly grateful I am for the opportunity to step into the role of Chief Financial Officer. I've called Alliance home for the past 34 years, having joined our predecessor company in 1989. Since then, I've served in a variety of roles within corporate finance and marketing, and I uniquely understand what makes this partnership great. I see tremendous opportunity for continued value creation as we build upon Alliance's strong financial operational foundation to be a reliable energy partner both for today and tomorrow. Now turning to the quarter, let me start by recognizing the dedicated efforts of our entire team that delivered the impressive first quarter results we are going to talk about today. The strong 2023 quarter performance was led by record coal sales price per ton sold, which rose by 43.6%, resulting in total revenues in the 2023 quarter increasing by 43% to $662.9 million compared to $463.4 million for the 2022 quarter. The year-over-year improvement in realized coal prices reflects the positive impacts of our contracted order book. Sequentially, coal sales price per ton was up 0.7% or $0.50 per ton sold. Turning to our royalty segment, coal royalty revenue per ton was up 12.5%. Lower commodity prices caused average realized oil and gas sales prices to fall 26% per BOE versus the 2022 quarter. Sequentially, coal royalty revenue per ton was up 14.6% and average realized oil and gas sales prices fell 18.2% per BOE. Coal sales volumes increased 3.8%, while coal production increased 0.7% to 8.5 million and 9.2 million tons, respectively, compared to the 2022 quarter. Oil and gas royalty volumes increased 39.5% on a BOE basis to new record highs, while coal royalty tons sold declined 8.9% year-over-year. It is important to note that we recast historical periods within our oil and gas royalty segment to include the JC Resources LP minerals interest acquisition that closed during the 2023 quarter as if we, rather than JC Resources, had acquired the assets in 2019. Segment Adjusted EBITDA expense per ton sold for our coal operations was $39.66, an increase of 23.7% versus the 2022 quarter, primarily due to inflationary pressures throughout the year. On a sequential basis, costs per ton were slightly lower. Our increased operating expenses in the 2023 quarter compared to the 2022 quarter were also impacted by increased sales-related expenses due to higher sales price realizations and higher labor-related expenses, maintenance costs, and materials and supplies costs. During the 2023 quarter, we had three longwall moves, including 2 at our Tunnel Ridge mine, which is an extremely rare event for us. These longwall moves, along with two prep plant fires that were contained and extinguished quickly, were some of the operational challenges that occurred during the quarter. Our net income and EBITDA rose sharply in the 2023 quarter, increasing 402% and 75.2% respectively over the 2022 quarter. These increases reflect higher sales volumes in both coal and oil and gas royalties, as well as higher price realizations in coal, which more than offset lower realized prices in oil and gas royalties, inflationary pressures and other cost impacts that I previously described. Turning to our balance sheet and uses of cash. Alliance generated $153.4 million of free cash flow before growth investments in the 2023 quarter, which represented a 17.7% decrease versus the sequential quarter, an increase of 208.4% year-over-year. The sequential decrease was primarily attributable to tons sold being 9% lower, due in part to strong shipments during the sequential quarter and a slight delay in our scheduled contract shipments for the 2023 quarter. Our total and net leverage ratios were 0.44x and 0.19 x total debt to trailing 12 months Adjusted EBITDA, and our liquidity increased to $703.6 million, including approximately $271 million of cash on the balance sheet. The 2023 quarter was eventful for us on the capital allocation front, highlighting both the cash generating power of ARLP and the many options we have to attractively deploy it. During the quarter, we paid our quarterly distribution of $0.70 per unit, equating to an annualized rate of $2.80 per unit that we expect to maintain throughout the year. Our oil and gas royalty segment continues to be a valuable growth vehicle for Alliance as we completed the $72.3 million acquisition of oil and gas mineral interests discussed on the last call, and then separately purchased additional oil and gas mineral interests in the Permian Basin for $2.8 million during the quarter. In January, we announced that the board had authorized a $100 million unit buyback program. During the 2023 quarter, we deployed $18.2 million to purchase 860,000 units, leaving us with $81.8 million of remaining authorization on our unit repurchase program, which has no expiration date. Finally, in March, we opportunistically purchased $26.6 million of our outstanding 2025 senior notes in the open market slightly below par. We intend to prioritize additional purchases with available cash flows this year and next. As of yesterday, May 1, we now can call all or any part of our senior notes at par one of several options we will consider. Like I said, a busy quarter for capital allocation. The slowing of the economy and the mild start to winter reduced overall demand for both coal and natural gas in the United States during the 2023 quarter. Coupled with continued growth in domestic natural gas production, natural gas prices dropped significantly, both sequentially and relative to the year ago quarter. Lower natural gas prices affected coal burns due to more competitive gas-fired dispatch options for some of our customers, and to a lesser extent, reduced realized pricing in our oil and gas mineral segment. Despite these near-term challenges, we remain optimistic 2023 will be another record year for ARLP based upon the strength of our solid contracted coal sales book of business. Turning to our updated guidance detailed in this morning's release. Lower natural gas prices have resulted in some movement in the timing of contracted domestic deliveries and a shift in the mix between export and domestic markets. At the end of the 2023 quarter, our committed tonnage for 2023 was 34.3 million tons, or approximately 93% of our anticipated sales tons at the midpoint of our guidance range. Of that total, 4.2 million tons are currently committed to the export markets. As we discussed during our call last quarter, we anticipated that most of the sales activity for our unsold coal for 2023 would occur in the back half of the year, and that remains the case today. We do now expect that most of this available tonnage will be supplied to the export markets as domestic opportunities appear more limited due to the mild winter weather and current utility inventory levels. As the summer peak demand season plays out, we expect normal buying patterns to return. Sales pricing is anticipated to be lower than where we thought at the beginning of the year, so we have chosen to modestly adjust our outlook for average coal price realizations for 2023. We continue to anticipate ARLP's overall coal sales volumes in 2023 to be in a range of 36 million tons-38 million tons. 2023 total coal price realizations per ton sold are now expected to be in a range of $65-$67 per ton, a decrease of $2 per ton from our previous range, driven by lower pricing expectations for our uncontracted tonnage position. On the cost side, a laser focus on execution is helping offset the inflationary factors experienced in 2022. We still anticipate labor pressures, higher maintenance, materials and supplies costs, and higher sales-related expenses throughout 2023 compared to 2022. On our last call, we stated that we expect segment Adjusted EBITDA expense per ton to be higher during the first half of 2023 compared to 2022 levels before moderating in the back half of the year. That outlook still holds. For the 2023 full year, segment Adjusted EBITDA expense per ton is now anticipated to be in a range of $39-$42 per ton, a decrease of $0.75 per ton at the midpoint from the prior guidance range. Finally, as it relates to our oil and gas royalty segment, our initial 2023 guidance reflected the acquisition of mineral interests in 2,682 net oil and gas royalty acres in the Permian Basin for a cash purchase price of $72.3 million, which closed during the 2023 quarter. Recent performance on all of our acreage has exceeded our initial expectations, leading us to increase the midpoint of full year guidance for oil and gas volumes on a BOE basis by approximately 9%. The remainder of our guidance ranges remain essentially the same as previously discussed, with only minor adjustments in certain categories. With that, I will turn the call over to Joe for comments on the market and his outlook for ARLP. Joe? Thank you, Cary, and good morning, everyone. Before I start, I would like to express my appreciation to Brian Cantrell for his dedication to me and our partnership over the past two decades. I can tell Brian is already enjoying his retirement as he sent Cary and me an email this morning after we posted our earnings release, which he said, quote, "Outstanding first quarter. Congratulations. I'm sure you'll do well on the call today." Many of you know Cary, who has been by my side for nearly three decades, and I'm so appreciative of him enthusiastically agreeing to step up and assume the role of CEO. Cary, I welcome you to the call, and I think it's time to get ready. Yes. You ready to go? Yep. Like Cary said earlier, I also want to begin my comments by thanking the entire Alliance organization for their continued hard work and dedication toward posting outstanding results to start 2023. Their efforts helped us deliver year-over-year improvements in coal production, coal sales volumes, record realized coal prices, record royalty oil and gas volumes, and ultimately higher net income and EBITDA. I'm extremely proud of all that has been accomplished and thankful for the unwavering focus of our teams on creating long-term value for all of our stakeholders. Overall, this winter season was a mild one for our markets in both the United States and Europe, which makes it easy to forget the impact that severe weather events like December's Winter Storm Elliott can have on our nation's energy security, as well as the importance of having a reliable, diverse, affordable energy mix. It is during these extreme weather events that renewable resources, as well as natural gas, are frequently unable to adequately respond at the times they are most needed. Reserve margins and energy security in many regions of the country and in Europe are already tight. As economies continue to recover and advance initiatives to increase electrification, the demand and stress on the grid will likely be even more magnified going forward. There is critical need for a diverse mix of energy sources for decades to come. Time and time again, we have to remind stakeholders that the speed of transition away from all fossil fuels, as advanced by the Biden administration, is moving way too fast, is not practical, and will lead to energy insecurity if they keep trying to prematurely shutter fossil fuel power plants. Turning to our current outlook, Cary did a good job outlining our views on the current weakness in domestic coal demand caused by lower natural gas prices and how our guidance was adjusted as a result. As he stated, we remain optimistic 2023 financial results will be at record levels. Even though there is uncertainty caused by rising interest rates impacting the U.S. economy and recent mild weather and lower natural gas prices that soften the near-term domestic utility markets, we expect export demand to be sufficient to allow us to increase sales compared to last year. Relative to pricing, domestically, the market views the weakness in natural gas prices as temporary condition, as evidenced by the current forward curve rising steadily to over $3.50 per MMBtu by the end of 2023 and into 2024. We support that view as natural gas prices must rise to incentivize new capital investments. From a pricing perspective in Europe, mild weather caused API2 thermal delivered prices that peaked near $270 per ton in November to a pricing range today in the $125-$150 per ton range. I will emphasize that even in the face of this decline, seaborne thermal coal prices for our key markets are still an attractive option for our tonnage. We are fortunate that our robust cash flow generation positions us to continue improving our balance sheet and pursue attractive investments that are intended to meet the evolving energy needs of tomorrow. We are not just a coal company. Our successful investments in oil and gas minerals interest the last several years, along with the additional growth opportunities within our New Ventures activities, demonstrate our commitment to diversify our earnings and cash flows and grow ARLP in parallel with the transition underway in the energy markets we serve. ARLP has long-standing relationships with electric utilities, regulators, and other customers that position us to be a reliable energy partner of tomorrow and benefit from any changes to the U.S. power grid, creating additional avenues for growth. As I have said many times before, we do not view our future energy needs as a country as an either/or solution, but rather an and solution. In closing, I am proud of ARLP's impressive first quarter results and excited about the opportunities in front of us. Our operations are running well. Our coal contract book is heavily committed at attractive levels, and our financial position has never been stronger. Looking forward, we believe ARLP is well-positioned to deliver solid growth and attractive cash returns to our unit holders in 2023 and beyond. That concludes our prepared comments, and I will now ask the operator to open the call for questions. At this time, we will be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Nathan Martin with The Benchmark Company. Please proceed with your question. Thanks, operator. Good morning, Joe, Cary. Congrats on the quarter and great to hear you on the call, Cary. Thank you, Nate. Thank you. You guys built a little bit of inventory in the first quarter. I guess first, was that expected, or were there any logistical challenges to speak of? You know, how should we think about that sales cadence over the next three quarters, both domestically and in export side and maybe when those inventories could draw back down? I know you guys had previously signaled higher production and shipments in the back half. I think, you know, part of that was a bump from Gibson, so I'm assuming that's still the case. Just any additional color would be helpful. Thank you. Yeah. On the inventory, it was within our plan. As we move towards more export tonnage, you know, we have secured the infrastructure, the capacity at the ports, to be able to have our coal stored to be ready for vessels when they come in. Based on the size of the vessels, which are larger obviously than the rail cars, that does require when we have shipments towards an end of the quarter to have to build our inventory to meet the shipping schedules of these export movements. There was a couple of vessels that we had planned to ship in the first quarter that shipped in early the second quarter, and that's just a logistical timing issue. pretty consistent with what we were thinking it was going to be, but for those one or two day delays in shipping of those export vessels. As far as our production, it continues to be as planned. I think we have delayed the hiring for the second shift of the fifth unit at Gibson County. We're going to wait and see exactly where the market develops in the second quarter, where we do anticipate based on internal inbound calls we're getting from customers both in the export market and the domestic market, that there will be opportunities in the back half Rather than hire those people effective April 1 like we had originally planned, we delayed that to the second quarter to probably after miners vacation. We'll wait and see. We do have the ability to produce tons on weekends to meet that demand. A lot of, a lot of our production demand, just specific to that one unit, will be de-determined based on our outlook at the mid-year, and as we see, you know, where the weather is and what the gas prices are and what the export demand is. Thanks for that. You know, sales are committed. I mean, our sales are continuing to be targeted at the same range that we mentioned in the prior quarter. You know, at this moment in time, we're very comfortable that we'll be able to hit those targets, hit the midpoint of our range that we have in our guidance for you. Great. Appreciate that color there, Joe. It sounds like really just, you know, as expected timing-wise, it's had a vessel slip, but that's already shipped, so that's good to hear. You know, if I look ahead at your updated committed and priced tonnage for 2023 and 2024, it appears totals are actually a little bit lower versus where they were last quarter, looks like driven by, you know, lower domestic tonnage assumption there. Could we get some more color around that change? Maybe any additional thoughts on potential domestic deferrals? Yeah. In our contracts, our utility customers do have some flexibility to either flex up or flex down, their committed tonnage. When they do that, it basically carries forward, so it doesn't really release, those tons from the contract. It's just a deferral, into a subsequent period. With the natural gas prices, being where they were and therefore more of a demand issue that the utilities were projecting in the first quarter, they did, you know, several of the utilities did flex down under their contracts. That has opened the door for us to just ship more tons in the export market, which, in total actually is a higher price than we would have gotten had they taken the tons on under the domestic contracts. In other words, the export price netback is higher than the tons that these utilities elected to flex down in this quarter for, some parts of the 2023. That's why there was a change in the mix of the contracted tons for the calendar year 2023. Got it. That's great to hear that, actually able to flex up to a better margin. I guess along those lines, where are your export netbacks today, with API2 around $135? When you look at that and add in, you know, what we have still a few times that we can sell in the met market, I think the total netback will be somewhere in the same range as what we've guided as to our average sales price for the year in that $65-$67 range. Great. Very helpful. Then, you know, as we look ahead to 2024, how do we think about potential coal shipments? I mean, domestic demand seems like it could be under pressure. You know, you guys have highlighted the, you know, desire to pivot to the export market a little bit. I know I've asked this in the past, but how much could you ramp up export sales to offset, you know, any potential pressure on the domestic side? Then what's the potential to offset, you know, possible, you know, lower coal operations EBITDA with continued growth, you know, in your oil and gas royalty segment? As we look at the market, and we look at our contract book, most of our contracts are still with customers that are been long-term customers for ours. We would expect those contracts that do roll over into 2024 that expire, that we will be able to place those tons with those customers. Since the end of the quarter, we have reached an agreement on one of our contracts that's $1.3 million-$1.6 million, depending on how the flexing goes on those contracts, for a committed term of 18 months, with the option to the utility to extend that beyond that, for a term yet to, you know, that would be at least six months, if not another year or a year and a half, under that contract at prices that continue to give us comfort that we will be able to maintain our profit levels and profit margins to a level that's a very attractive level compared to our historic run rates. I think that as far as the export and then in addition to that specific contract, there are two to three other customers that have announced RFPs, so they're gonna be in the market this quarter to start placing tonnage. Most of those solicitations have been for at least a minimum of two years. One of them basically asked for bids for a period up to five years. We are continuing to be very confident that the demand for our product is going to be stable in the domestic market for the next three years for sure, based on our conversations with our domestic customers. On the export side, you know, we're planning to ship 6.5 million or so in 2023. Our highest level historically was around 12.2 or something, I believe. Correct. We could double that volume if necessary if the domestic market doesn't show up. We continue to believe that the export demand will be strong in 2024, comparable to what it is in 2023. You know, the one issue that could change that is back to what happens, you know, with the Russia-Ukraine situation, and how will Russian product be moving throughout the international markets, if there's a change with the sanctions, et cetera, that are impacting their shipments today and reducing their shipments. Because right now, you know, based on the sanctions they have, we think there's a floor on the price of the export product because at these levels, you know, Russia's not making any money, and they need that cash flow for the strength of their economy. Got it. Appreciate that. I'll go ahead and leave it there and jump back in the queue. Thank you for the time, guys. Yep. Our next question comes from the line of Mark Reichman with Noble Capital Markets. Please proceed with your question. Mark, your line is live. Not sure if you're on mute. Good morning. I was just wondering if you could provide a little more visibility on the comment on the several domestic customers that were seeking the sizable commitments for coal deliveries in 2024 and 2025. Just because I noticed, as, you know, as Nathan alluded to, that 2024, you know, committed end price kind of actually went down a little bit. What are the dynamics in the market right now, and when do you kind of expect those customers to really kind of step up? I think you said that some of those would be two-year contracts. Yeah. Like I mentioned, two to three of those. I know two for sure. There may be a third one that has indicated that they will be seeking coal for those time periods in this current quarter that we're talking. There will be others that'll come out in the third quarter. Again, based on our customer conversations, there are sufficient coal plants that will continue to run and will continue to be needed in the states where they operate, due to the capacity constraints in those states. They have to have the coal plants running no matter what the gas price is to meet their load. With electrification in these states growing, due to the growth anticipated in a lot of these battery factories and also EVs that are continuing to ramp, as well as other factors in a growing economy that will benefit from the Infrastructure Bill, the CHIPS Act, the Inflation Reduction Act, we anticipate the electric generation will grow over the next decade, for that matter. As a result, they're gonna need to keep these coal plants either running and/or those that remain that are trying to fill the void for some that have closed at higher capacities. Even though there may be some plants that go offline, we believe there's sufficient capacity with the current plants that we anticipate that will be open through 2035, that demand will be at a level set for us as a low-cost producer and a reliable producer, that we anticipate, as I said, at least the next three years is that we can see that our production and sales should be at the levels where we are currently, if not maybe tick up a little higher, depending on the export market. There are attempts, you know, by the Biden administration to put different regulations on our customers to try to convince them to close plants prematurely. You know, one of those rules is a air transport rule, which, the EPA, as you probably know, went in and denied numerous states almost overnight, basically saying that they denied their state plans as being inadequate and therefore requiring them to comply with a federal plan that would be more stringent. Yesterday we got some good news from coal producers' perspective and in a nation's perspective where the Fifth Circuit put a stay on those rules. We believe that the rules that the Biden administration are pursuing to try to fundamentally change the coal industry and the electric generation industry are in direct violation of West Virginia v. EPA that the Supreme Court passed or rendered, last year. We believe these coal plants are going to stay open. That would be even a higher boost to our forward consideration for what the demand will be. That's the way we see the demand picture. You know, weather's always a factor that is unpredictable, so I can't really comment on that as to what the weather is. The economy, you know, you help me. On the one hand, you've got a Fed trying to restrict production and growth, and on the other hand, you've got an administration trying to give away a lot of incentives to incentivize growth. I'm not sure where this economy's gonna play out as far as the timing of energy consumption. We're fortunate to have a solid relationship with our customers that are going to maintain and keep their plants open for the next decade. We've got a favorable relationship with them that I'm confident that we will continue to be their supplier of choice and allow us to maintain our production and sales, you know, at current levels for an extended period of time. Just the second question I had was, you know, revenues came in pretty much in line with our expectations. Operating expenses were actually lower. You know, in just looking at your guidance, while you've kind of trimmed the coal sales price per ton sold, you also trimmed the segment Adjusted EBITDA expense per ton sold. Kind of what do you think are the biggest pieces to watch on that operating expense line, and how do you see that evolving, you know, for the remainder of the year? You know, everything ties back to inflation. We have seen, you know, our supply costs sort of peak and start declining in several key areas. You know, the one area that is holding firm is labor. We're continuing to have difficulty finding people. We also see competition from the Infrastructure Bill and some of the growth that is occurring because of some of these subsidies that I talked about earlier. What we're seeing in our areas of operation that there continues to be solid opportunities for employees or for workers to work. You know, whether we can get people in the workforce to meet those jobs or whether we're gonna have to continue to have a shortage of workers, that's the one area that I would say that's hard to predict. We're not looking at that going down. On the supply side, the other issue that could be a variable factor is what our oil price is gonna do. Are they gonna go to $100 or are they gonna go $60? You know? That's another... You see analysts projecting different numbers. We're hedged on diesel for this year, so we should not be impacted by the diesel costs for the remaining of the year. That would be an issue going into next year, depending on where diesel prices go. Okay. Those would be the main things. Supply chain, we're in a lot better position this year than last. When you look at supply chain, that tends to increase your cost somewhat because of the need to potentially buy some more items that and then have storage costs for those items, et cetera, that increase your costs. We're seeing supply chain be normalized for the materials and supplies we need to run our business. That's another factor that impacts our costs. The material ones are wages and I'd say oil prices and steel prices, but they've come down, so, and other consumables have come down. Okay. Well, thank you very much. That's really helpful. Thank you. Our next question comes from the line of Dave Storms with Stonegate. Please proceed with your question. Good morning, and thank you. With the average selling prices in Appalachia going up a little bit and the Illinois Basin going down a little bit, can you talk just a little bit about what drove kind of that dislocation there? Well, they serve different markets. One, I think that you've got our Mettiki mine serves both the metallurgical market as well as the steam market, but that benefits from the met market being at a higher sales point and stable for us. Our MC Mining product is also a very attractive market or a product for the export market and demands the premium and is really not priced off natural gas prices. Our Tunnel Ridge operation in Appalachia is basically sold out, so they haven't really had any impact on having any open tonnage into the market relative to natural gas prices. In the Illinois Basin, we had some excess supply where we did in fact have to sell some product at reduced prices compared to, you know, prior periods or prior year, I guess it was. Yeah. I think the other important point that Joe is alluding to there is if you look at a mix issue, you know, in the most recent quarter, Tunnel Ridge did have two long haul moves during the quarter. When you look at from a volume perspective, our MC Mining and our Mettiki operations did have a little higher percentage going in there. When you look at that from both a revenue per ton as well as cost per ton, it does get skewed a little bit in the existing quarter because of those two factors. You know, if you look going forward, you know, Tunnel Ridge, like I mentioned, had two long haul moves. Their next long haul move is not until December. I think what you'll see going forward is, you know, more of a normal mix and a bigger mix in relationship to Tunnel Ridge overall. You'll see it both on the sales price and the cost side going forward. We've tried to kind of account for that in our total guidance ranges going forward on both the revenues and cost side as well. Understood. That's very helpful. I also noticed on your guidance that you increased your acquisitions in gas royalty about $30 million based on, you know, the anticipated ground game acquisitions. Is there any sense of the pacing for that acquisition? Well, you know, we sort of planned it to be sort of you know, ratable over the year, but it will be totally dependent on the opportunities that present themselves. It's hard to predict exactly what it's going to be. The way we planned it in our planning was to do it on a ratable basis for the year. I think as you look at the first quarter, you can see, you know, the ground game was at $2.8 million, you know, for the first quarter. You know, like Joe mentioned, I think the opportunities will play themself out over time. I know there is quite a bit of activity in terms of what they're looking at. As we look at the full year guidance, we still feel very comfortable in terms of being able to transact on that ground game. Like Joe said, it's gonna be a little lumpier than the way we had originally planned it, and will likely come in, you know, different spurts throughout the quarters. There was the earlier question on, you know, what we anticipated our growth would be in that segment, I don't think I answered that question. But we are committed to continuing to invest in that segment, effectively redeploying what their prior year EBITDA is. As we look into the balance of this year and then going into next year, we would expect to continue to be investing sizable dollars into that segment. That's very helpful. Thank you. One more, if I could. Just with the, you know, the potential for the U.S. dollar to keep weakening, how does that impact any outlook you have on export sales? It obviously improves our opportunities and it affects on what our competition is. You know, since most of the contracts are priced in dollars, that does give us a benefit. Perfect. Thank you very much. Our next question comes from the line of David Marsh with Singular Research. Please proceed with your question. Hi, good morning. Congrats on the quarter, guys. Thanks for taking the question. Thank you, David. Just wanted to start with, just a quick question on the oil and gas royalty side. Looked like the dollar price for BOE was down a good bit sequentially. Could you just discuss that a little bit? I was just a little surprised by that given that oil has kind of hung out in the $70 range for the most part, and just curious what drove that reduced number and what that number might look like going forward for the second quarter. Yeah, I think, you know, as you just look at it, you know, we don't hedge our oil and gas or oil and gas royalty side of it. It's just dependent upon where the pricing measures are for the product during that period of time. If you look just sequentially quarter-over-quarter in terms of our realizations, it was 9.7% lower on the oil side of it, you know, and 65% lower on the gas side of it. You know, as you look into the fourth quarter of last year on the gas side, by way of example, you know, you had pricing in excess of $5. You know, as you kinda move back in to where our netbacks were in the first quarter and look at where those realizations were, you know, the actual netback ends up being, you know, under $2 for us over on the gas side of it. It's just a matter of what the commodity price index are doing at that particular point in time. That's the result of the differing flows, you know, related to those commodity price indexes. It's more of just that component of natural gas, even though it's a smaller percentage than oil, it's still a percent that- Yeah does impact the total price. Right. Okay. Understood. I just you know, as I was reading through it said 75% oil, I was just. Right A little surprised the realization was so low. I appreciate that. Yeah. No, no, that's right. I mean, when you look sequentially, our oil price realization is down about 10% though. Got it. Got it. With regard to the debt side of the balance sheet, congrats on the repurchases in the open market below par. That's a great win for the company and for unitholders, I believe. Thank you. I just was looking at the balance sheet, so sequentially, your debt was higher. Is that as a result of the acquisition? No, Ed, it's not really a result of the acquisition. We just redid our credit facility that we closed in January. As a part of that new credit facility, it had two components to it. It was a $500 million credit facility in total, $425 million of that was a revolver, and $75 million of that was a term loan. When we entered into that credit facility, you know, the term loan component was an important part, and we felt like it made sense to have a term loan component. Basically, we've got some capital expenditure needs within our coal operations that we announced related to Riverview, just in terms of some extensions into some new reserve areas. By, you know, entering into that term loan component, it matched up what the capital needs were gonna be associated with that. We elected to enter into a term loan facility, you know, associated with that. That's why it's higher quarter-over-quarter. It's just related to that term loan component. The repurchases that we did, as you mentioned, were on our senior notes that are due in 2025. Right. Okay. That makes sense. I'm sure the banks appreciated you locking into some amount of borrowing right out of the gate. They did. Just the last question, just if I could circle back and kind of piggyback on the last caller? With regard to the acquisition side, I mean, can you just talk about the environment and what you're seeing in terms of opportunities being presented to you? Are you continuing to see kinda mostly opportunities in places like the Permian, or have you expanded the, you know, the search beyond that? Is it again, still primarily around oil and gas assets as opposed to anything else? Yeah. There are opportunities presented to us in all the basins that we evaluate, but our primary focus has been on the Permian, both the Delaware and the Midland Basins. That's where our focus will be. Again, we're willing to look at other basins. We evaluate those Most of the things we prioritize currently, as being attractive to us are in the Permian. I was just curious the as to whether or not some folks might be kind of interested in exiting positions in the Haynesville, given the weakness in that gas, which might present a really interesting opportunity. As I mentioned, we're evaluating opportunities in all basins, so we're not exclusive to one. We look at the capital we've got, available to us, and then we try to assess the return opportunities and try to prioritize where we feel like we can have the best long-term investment. Of the opportunities being presented and the ones that we're looking at right now, they're more Permian based. That doesn't mean that there won't be some new ones that come in that we look at that the price expectations could be met to where we could take advantage of the lower price today. You know, we're not finding too many people that wanna lock in at these low gas prices when they're trying to sell their properties. Right. Right. Okay, last one from me. Cary, just quickly, I noticed your interest income increased nicely in the quarter. Could you talk about what you're doing with the cash in order to generate some incremental interest income and just, you know, how liquid those investments are? Sure. Yeah, interest income was up, you know, on the quarter. You know, it's just a matter of, you know, where interest rates have been going. Most of the cash that we have, you know, on the balance sheet today is invested in money market accounts. It's all very liquid. You know, as you know, short-term money market accounts have been increasing, you know, with the increase in interest rates, you know, over the period of time. We do have, you know, a modest amount of our overall cash that's on, you know, more bank balance sheets that may earn a little bit lower rate than what you get on existing money markets today. Out of our total, you know, roughly 75%-80% of our cash balance is in money market accounts with others in, you know, very short term, very liquid, you know, availability at our other banking relationships. Great. Thank you guys. Appreciate it. Thank you, David. Our next question comes from Nathan Martin with Benchmark Company. Please proceed with your question. Hey, guys. Thanks for taking my follow-ups. If I just look out maybe over the next few years, do you guys see any big changes related to your domestic customer base, maybe with, you know, regulations on the horizon, anything like that? What percentage, you know, of your domestic business is recurring at this point, if you have that number? As we look at the export side, you know, you mentioned you secured some additional capacity at the ports there. I think, Joe, you said you expect to export around 6.5 million tons this year, but had maxed out over 12 million historically. You know, do you have the capacity to get close to that 12 million ton number now if the demand is there? Are there other items, you know, you guys would have to address first? We have the capacity. We obviously don't have the production. We don't have that. Our unsold position is only a couple million tons so for this year. We would have the capacity from a logistics standpoint to be able to ship at that rate if we elected to do so. I think as far as looking at our customer base, we don't really see any substantial changes that are on the horizon. There are some customers that in their IRPs that are looking at retirements in the 2028 time period that could tweak what our mix is among the various customers. As I said earlier, even with some of those closures, the other plants that they remain to keep open, they've assured us that they are still going to need coal volumes, pretty much consistent with what they've been taking, because they would be utilizing the remaining coal plants at higher capacity factors. For the next five years, we don't really see any shifts, in our customer mix. Great. Appreciate that. Cary, I know you mentioned the expectation to maintain the current $0.70 per unit quarterly distribution throughout this year, but any thoughts on where that distribution could go looking forward? Joe, I think you previously mentioned a target coverage ratio of 2.2x - 2.5 x. Does that still hold true? Where do, you know, potential unit repurchases kind of fit into the capital return equation? Yeah. I think, just in terms of distribution coverage, you know, which you talk about, you know, beyond 2023, you know, that's still, you know, where our view is in that 2x-2.5 x range, in terms of distribution coverage, going forward. That's where we would tend to focus. Obviously, we haven't provided detailed guidance on any of that into 2024. Typically, we'll do that as we get closer to the end of the year, but that gives you a pretty good sense as to what we would look for distribution levels going forward. I think rather than the stock buyback, I think our primary focus right now would be on buying back our bonds. As we look at our credit agreement and, you know, what the underlying covenants are under that agreement, you know, there is an expectation that we will retire those bonds within a certain time period, which it makes sense for us to do anyway, given the reborrowing cost of trying to go back and replace those bonds. I believe we mentioned that as of May 1, we have the ability and flexibility to either continue to do what we've been doing, buy them in the market, or, we can redeem those at par under our current credit agreement. Under our senior notes credit agreement. Great. Thanks. Thanks again for the time and thoughts, guys, and best of luck for the rest of the year. Appreciate it, Nate. We have reached the end of the question and answer session. I'll now turn the call back over to Cary Marshall for closing remarks. Thank you, operator. To everyone on the call, we appreciate your time this morning as well, and also your continued support and interest in Alliance. Our next call to discuss our second quarter 2023 financial and operating results is currently expected to occur in late July, and we hope everyone will join us again at that time. This concludes our call for the day. Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.