Good afternoon, and thank you for attending today's Hallador Energy first quarter 2022 earnings call. My name is Jason, and I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you'd like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to our host, Rebecca Palumbo, with Investor Relations. Thank you, Jason. Everyone, we appreciate that you took the time to join us today. Yesterday afternoon, we released our first quarter 2022 financial and operating results on Form 10-Q, which is now posted on our website. On today's call, we have Brent Bilsland, our President and CEO, and Larry Martin, our CFO. After the prepared remarks, our management team will be available to answer your questions. Before we begin, please note that the discussion today may contain forward-looking statements that are statements related to future, not past events. In this context, forward-looking statements often address our expected future business and financial performance. 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 differently from those we projected or expected. For example, our estimates of mining costs, future sales, legislation, and regulations. In providing these remarks, we have no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, as such may be required by law. For a discussion of some of those risks and uncertainties that may affect our future results, you should see the risk factors described from time to time in the reports we file with the SEC. As a reminder, this conference call is being recorded. In addition, a live and archived webcast of this earnings call conference will also be available on Hallador's website. We encourage you to ask questions during our Q&A. If you are on the webcast and would like to ask a question, you need to dial into the conference. That toll number is 1-844-200-6205, access code 643811. Now with the preliminaries out of the way, Larry, you can start. Good afternoon, everyone, and thank you, Becky. I'm gonna review our operating results. Before I start, I'd like to define adjusted EBITDA as operating cash flows plus current income tax expense, less the effects of certain subsidiaries and equity method investments, plus bank interest, less the effects of working capital changes, plus other amortization. Our net loss for the quarter was $10.1 million or $0.33 a share. Our adjusted EBITDA was $2.6 million, and we borrowed an additional $8.3 million of bank debt. Our bank debt at 3/31 was $120.1 million. Our net debt was $115.8 million, and our debt-to-EBITDA leverage ratio was 3.03 times. I would like to now turn the call over to Brent Bilsland, our CEO, for his comments on the quarter. Thanks, Larry. The world is in the middle of an energy crisis, which has increased prices of most everything related to energy. In Q1, Hallador was in the unfortunate position of having its sales price hedged so we could not take advantage of significantly higher market prices, while our input costs significantly increased year over year due to supply disruptions and inflationary pressure. Additionally, our productivity was low as we integrated and expanded the newer workforce. 1.4 million tons were shipped at an average price of $41.40 during the quarter. Q1 production costs were $39.54 per ton, which represented a $4.42 per ton increase over Q4 of 2021. During Q1, we generated $3 million in operating cash flow and increased our bank debt by $8.3 million. As of the end of March, our bank debt, as Larry said, was $120.1 million. Liquidity was $20.6 million, and our leverage ratio came in at 3.03, which was a violation of our covenant of 3.3 times. The company was successful in executing an amendment with our banks, loosening our debt-to-EBITDA covenant for Q1 and Q2. In May, we issued through two tranches of $5 million apiece, a total of $10 million in convertible notes to add to our March 31 liquidity of $20.6 million. Again, this is $10 million in addition to that number. The notes were purchased by parties affiliated with four of our board members and one unrelated party. We modified our existing sales contract during the quarter, resulting in our average sale price increasing for the balance of 2022 through 2025. As the sales market is the strongest it has been in many, many years, we anticipate negotiating additional price increases for 2022 and 2023 later in this year. On the production front, we improved mining productivity by 20% in April and May, which is leading to significant production cost improvements. These production cost improvements, coupled with our anticipated sales price increases, are expected to increase our margins from Q1 and return them to our historical greater than $10 per ton margins, by as early as June. Looking at the third quarter, we anticipate closing on the acquisition of the Merom Generating Station in Q3, subject to certain regulatory and financial approvals. Merom is expected to significantly add to the profitability of our company in 2022 and beyond. In the event we are unsuccessful in securing additional price increases later in the year and/or production cost improvements do not continue, and additionally, we are unable to close on the Merom transaction, we may seek an additional covenant waiver for Q3. Our current 2023 average sale price is already $4/ton higher than 2022. We improved that by $2, both by $2 during the quarter. Additionally, we have available for sale about 25% of our coal production in 2023. Now, we assume we'll be shipping these tons to our newly acquired Merom Plant in 2023, as this is currently our highest value use of these tons. However, as a fallback position, these tons could be sold on the open market at prices today that would produce margins we currently expect would exceed $50 per ton. In summary, though we are disappointed with our first quarter results, we have never been more optimistic about the growth potential of our company. We have made material improvements on our sales price and cost structure in Q2. Additionally, we are making progress towards our goal of completing the Merom purchase in Q3 with a backdrop of extremely robust coal and power markets in 2022 and 2023. Traditionally, Hallador has generated $50 million of adjusted EBITDA annually. In 2023, with current coal prices and with the expectation we will close on Merom in 2022, we expect our 2023 adjusted EBITDA to grow to over $150 million. With that, I'll open up the call to questions. Thank you. If you'd like to ask a question, please press star followed by one on your telephone keypad. If for any reason you'd like to remove that question, please press star followed by two. Again, to ask a question, press star one. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking a question. We'll pause you briefly as questions are registered. Our first question comes from Neil Rowe as a private investor. Please proceed. Hi, Brent Bilsland. My question relates to on May second, and this information was released on May sixth. You had the write-up on the $5 million in notes to the related board of director parties. Then subsequent to that, over the last three weeks sometime, an additional $5 million has been provided by somebody not related to the company. Are the terms identical, or are they different from what the board got? Well, just to clarify, the first tranche was exclusively board members. The second tranche was three board members plus an unrelated party. All of those terms are materially identical. Okay. You talked about the sales going forward and getting more per ton of late, and the prospects look good. I was somewhat surprised on the 10-Q to see the news about how much of the sales in the first quarter had been hedged, therefore, the higher prices weren't taken advantage of. That's probably maybe my bad on not knowing the details of that. How much of the forward sales are already hedged versus being able to garner what the market is? Yeah. There's a couple different things at play here. On the coal side, you know, we've got, as I said, 25% of our sales position, which is about 1.7 million tons, is available for sale next year. If we were to sell that on the open market, you know, those prices would be at margins today of $50 a ton or more, which we've just not historically seen margins at that level, right? However, we think we're most likely to acquire the Merom Generating Station in the third quarter, and so the best use of those tons is to not sell them on the open market, but to deliver them to the Merom Generating Station and convert those into electrons. The power markets and capacity markets, which are the two main revenue streams for a power plant, are extremely strong. At the end of the day, that makes us more money. You know, that's why we haven't been out aggressively marketing those tons because we're holding them back for ourselves. We have no reason to believe today that we won't close on the power plant in the third quarter. Okay. Good. We Sorry, go ahead. We will be trying to, you know, modify some of our existing sales contracts with customers that we think will lead to price increases in the back half of 2022. You know, the equity raise was to make sure that we have ample liquidity on our balance sheet to, you know, make sure we kinda get to the promised land. We think that in prior calls, we had said it would not be profitable in 2022. We are reversing that statement to say it would be profitable in 2022. You know, this could be as early as July. You know, we're down to 35-40 days, something like that would be the earliest we could close on the plant. Again, we are waiting for financial and regulatory approvals, which we've made a lot of progress on. I don't wanna get into the details on that, but you know, but sitting here today, we're pretty happy. We think that both the existing business will be much more profitable in the second half of this year, and it'll be extremely profitable next year, and that the power plant is likely to add to profitabilities starting in the third quarter. Good. I have, if I may, another question. On the Merom plant, as I understand, it's gonna be Hallador's responsibility on any environmental liabilities and problems. I mean, what does that look like? This is sorta like getting into new territory, isn't it? What are the risks and how has that been evaluated, and what do you think might be the outcome? Well, just to clarify, we're not taking, you know, that those press releases say we are assuming certain environmental responsibilities, not assuming liabilities. That's a key word. We think that we have done a good job of drawing a line in the sand as to assets that we are taking and assets that we are not taking. We are purchasing a power plant, a rail facility, and a CCR-certified landfill. We think all of those individually and together are assets. I think from that perspective, you know, we've worked very hard to make sure that we have not stepped into huge exposures on the environmental front and that we have paths to create value out of all three of those assets. Very good. I've got one last question, if I may. Sorry to keep running here. When and- Go ahead. The longer things go as they are and if you get the Merom plant and it goes on and on, a lot of things are going on in the country where the prospects of maybe things being as they are for with the need for energy could go on a lot longer than some of the talk has been in recent years. Having said all that, the end game where you convert to solar power and your understanding of how that would work or who the experts gonna help with that, what are gonna be the costs? It's my understanding it goes from day one, it isn't that way, and then suddenly it's solar. What, how do you view that out in the future? Again, it seems like more and more out there in time, but eventually how that would all work. Yeah. Our goal today is to acquire the coal-fired power plant and to run it as a coal-fired power plant as long as the market signals are telling us that that's what should be done. The thing that's kind of raised its ugly head here, I mean, you had a FERC commissioner last week out saying that the transition to renewables has happened too fast. It is defying the laws of physics of what is possible. I think what everyone is realizing is the country has been in a tremendous pace to shut off generation, to close generation that has an on switch. You can turn on a coal-fired power plant, a gas-fired power plant, a nuclear power plant. But a solar panel and windmill don't have an on switch. You can't turn them on. They come on when the wind blows and the sun shines. Solar goes home every night. Batteries are what the world is looking to kind of, you know, move electrons from times of, you know, scarcity to demand. But the scale of that. There's, you know, some idiosyncrasies to the technology of that is not fully ready to be realized yet. In the meantime, the grid operators are all struggling to keep the lights on. You've seen MISO come out, which is, you know, the area, you know, it's 15 states, one Canadian province that the Merom Power Plant happens to sit in, as do our mines, and say that there may have to shed load this summer. They declared an emergency alert January first, second, third. They've had some other events of warnings since then. The grid operators, whether it's PJM, MISO, ERCOT, CAISO, are all warning that we've kind of gone through our reserve capacity, right? Renewables work pretty well. I, you know, I'm not making an argument that we're not transitioning there as a country because I think we are. Today, they need something to back it up. You know, eventually transmission lines will get better and batteries will get better and this will work out. You know, is that 10 years? Is it 20 years? Our president says that we're gonna be 80% renewables in 6 years. I don't think that's possible. Our grid operators say we might hit 80% in 28 years. I think that's realistic. Where will the Merom Power Plant cease to make economic sense? None of us know the answer to that today. I think it's longer than most people think. We just saw the capacity markets. You know, for the March auction, the capacity markets in MISO hit the maximum legal limit, and not everyone got filled at the maximum legal limit. There is a capacity crisis going on in MISO, in my opinion. What that does is, it helps the economics of all generation that has an on switch. Eventually, that will not be the case. We can't say today what year that is. We have designed a structure with our counterparty that when Hallador decides that it's no longer economic to run the plant, then we have a PPA in place with Hoosier Energy to convert the interconnection to renewable power. They have rights to purchase a certain percentage of that energy. I... You know, there's some proprietary things in there, so I can't speak to all of it. At that point in time, we will look to redevelop that asset. Where I think the great value is, if you look at the transition today, every time a power plant is retired, regardless of what form that power plant is, all the renewable developers race to acquire property or lease property around that asset because they want to reuse the substations, and they want to utilize the existing transmission lines of the grid. Well, as time goes on, when you transition to renewables, it takes, you know, roughly 3-4 times as much renewable to create the same amount of electrons as baseload power. There aren't today 3-4 times as many transmission lines and substations. That means once the existing infrastructure gets filled up, which I think we're flirting with that limit today, then that means new interconnections, new transmission lines, new substations all have to be built, and that's at a much higher cost. One of the advantages that we have at Merom is we have the rights, so to speak, to reuse the existing substation and have access to those transmission lines. That creates a considerable cost advantage, and it adds a lot of certainty because those rights already exist and those assets already exist. We think we've found a way to, you know, basically have a very valuable asset in our interconnection rights at the end of the plant life, whenever that day may be. I hope that answered your question. I know long, long. No, that's a great answer. Thanks very much. Thank you, Neil. Well, it looks like we have another investor in the queue. Our next question comes from Eric Wagner. Please proceed. Yes. Hi, guys. You guys doing a great job. Keep up the good work. Two quick questions. With the acquisition of the utility plant, how dilutive will that be to the existing stockholders? The other question was, when you've been doing your hedging, is that amount or level of hedging determined by the bank loan? Or how do you come up with the amount of hedging you need to do to, you know, keep the business going? Well, under our current PPA with Hoosier, they are acquiring all of the energy and capacity from the date that we close, which again, that's not an exact known date, until the end of May 2023. You know, we're not really hedged. We have set the price and terms of those electrons with a counterparty, which is Hoosier, the seller of the asset. Okay. We have PPAs with them that extend from June 1, 2023 through the end of 2025, you know, for certain amounts of energy and capacity. They you know rely on the plant, they just don't rely as heavily on the plant. It's roughly like 1/3 of the capacity and 20-some odd% of the energy. Okay. As far as hedging beyond that, you know, that is something we're evaluating now as to how much hedging we want to do or not do. You know, as long as we have bank debt, we like having certain amounts of forward sales. That being said, one thing that is happening here is, you know, we are converting fuel, coal that we produce today into electrons. I would say that the electron market, because we can sell day ahead at MISO, is a much more liquid market than the coal market. From that perspective, I think the liquidity of our sales opportunities has improved dramatically with the acquisition of the power plant. Okay. Thank you. Thank you, Eric. Our next question comes from Robert Baker. Please proceed. Oh, hi. Thank you for taking my call. Can you hear me okay? Yes. Thank you. Hello? Yeah. The first question I had is regarding the operating costs for the most recent quarter and actually over the last several quarters. I know from previous quarterly calls a portion of that is attributed to just hiring new or increasing headcount and getting productivity up. How much of the increase in costs over the last four quarters from roughly $30 up to about $39.5 this quarter could be attributed to productivity? You've also mentioned some issues with the supply chain, and I'm presuming that means supplies, equipment and so forth. If you could just speak to some of the individual factors that have driven the increase in costs. Yeah. A couple different things going on there. From an input perspective, you know, we're seeing inflationary pressure, and that's where our existing supplier says, "Hey, this widget now costs 20% more." Right? We expect that cost increase to be, you know, I don't know if permanent is the right word, but I expect that to last for another couple of years just because we're just seeing inflation everywhere, right? The gas pump to food to everything, labor. Another type of input pressure we're seeing is a supplier will come to us and say, "I can only fill 80% of your order." Right? If you want roof bolt glue, I can only get you X amount of roof bolt glue or metal plate, you name your item, right? that forces us then to go out to a non-traditional supplier who knows these items are in short supply, and that person will say, "All right. I can get it for you, but it's gonna cost three times what you normally pay." We expect that type of inflationary pressure to dissipate as the supply chains, you know, kind of get caught up. You've got a lot of different factors at play here. You know, we've seen disruption from the invasion of Ukraine to the lockdowns in Shanghai, which, you know, it's always surprising to see, you know, some vendors saying, "Well, gosh, we can't get a material out of Shanghai that we normally rely on, so we're going other places." All of this from, you know, freight surcharges, all of this has led to cost pressure on the inputs. Which, to answer your question, I would say the input price increases we've seen has been about half of our cost increases. The other half has been on the labor side. You know, we've had, in September of 2021, we started hiring a lot more workforce as we responded to the increased demand for coal. I would say, you know, the increased demand for coal was happening late in the third quarter, early in the first quarter of last year due to the reopening of every market from the COVID kind of slowdown. Then we saw the invasion of Ukraine in February that really just set an already tight energy market on fire, right? I mean, last night, I think the forward strip on natural gas was $8 for the year. For the forward 12 months, $8. It's been decades since we could say we saw gas prices that high, which means coal plants are gonna dispatch in front of gas everywhere at much, much, much higher coal prices, right? Plus, we're seeing so much coal go to export. Come back to the labor front. We've hired, you know, 120 new people, right? Roughly 20% of our workforce. We've seen a lot of turnover in those new 120 people. Our existing workforce, we've not seen as much turnover, right? Those people are more ingrained to our way. It's one thing just to train 120 people. It's another thing to train 120 people that's probably turned over once in the last six months. It takes us a while to get those people ingrained to our way and see the productivity increases. We saw a 20% productivity increase in April. I've seen those financials, so you know, the cost improvement there was significant, arguably better than I was expecting. We've not released what that is yet because we wanna look at May and make sure that that's gonna be the improvement that we think we see. You know, as we talk about what does our business look like for the balance of this year? You know, it's kind of three fronts, right? It's keep our cost structure in line, increase our average sale price for the coal that we're getting, and then close on the Merom plant. Those are the three buckets that all lead to much better profitability. On one hand, we've got this very unusual time in our company where our first quarter results were poor, and yet we feel we are, you know, possibly a month away from having significantly better results. We have even more confidence that come 2023, that our company looks to be three times more profitable than it's historically been. Our game plan is to make sure we pack enough liquidity around our company to make sure that we make it to the promised land. That's the game plan I think we have in place, and that's what we're working on. You know, again, even when you look at cost increases that, you know, may be permanently $5, $4 a ton higher than they were a year ago. We're looking at sales prices that are, you know, $80, $90, over $100. I mean, tell me your timeframe, right? But we're talking about dramatically higher prices. As we reopen and reprice our existing production, the results are gonna be dramatic to the profitability of the company. You know, so then if you look at what does that do to the stock price a year from now if we are at $150 of EBITDA, right? I mean, look at the multiples coal companies typically trade at, less the debt, and you have a dramatically higher valuation for this company. You know, from that perspective, I think we're on the cusp of dramatically better things. Great. Okay. Thank you. A couple follow-ups to that if I understood it correctly. Has the turnover of the new hires improved? Like you were saying, roughly 120 new people, there was a fair amount of turnover there. As you've replaced the turnover, has that kind of attrition that comes from people joining and then moving on for whatever reason, has that improved over the last six months or so? I think it's marginally better. I think that higher interest rates and higher inflationary prices will eventually slow this economy down. That's why our turnover and our, you know, growth in people will improve. When exactly will that happen? It's hard to put an exact number on it. I think it happens gradually, you know, between now and the end of the year. Okay. In terms of supply chains and obtaining equipment or consumables or however they're referred, is there anything that concerns you about being able to obtain everything you need where it's not just, you know, you have to pay a price that's two or three times more than you normally would, but it's just not available at any price? Oh, I think we worry about that every day. That's our job to worry about that every day. We're in a period of time where you have to fight and work at getting your inputs. Because of that, I mean, we are, you know, we are trying to carry higher inventory levels to make sure we don't run out of anything. So far the industry's done a good job of making sure nobody's run out of anything. I wouldn't say we've stopped worrying about it. Yeah. Fair enough. You haven't experienced anything like that directly at being unable to obtain equipment needed or anything? So far we've been able to obtain everything. I wouldn't say it wasn't without a struggle. We definitely have paid premium prices. That's the part that we think that, again, higher interest rates, higher inflationary costs eventually slow this economy down, right? That's why they're raising rates, is to try to get that in check. The problem is, you know, walling off Russia is a, I don't know, once in a lifetime event. I mean, you're talking about the world's largest exporter of natural gas, the second largest exporter of oil, the third largest exporter of coal. When Europe says, "We're no longer gonna use these BTUs," they're gonna source that from somewhere else. They're looking at the Middle East, they're looking at Africa, and they're looking at the United States. Those are the three closest markets to Europe to replace Russia. We've seen an underinvestment in fossil fuels for the last five years in the United States. Now we're at a period of time where all of that industry is being asked to ramp up and ship every last BTU that you can. I don't care if it's coal, I don't care if it's gas or it's oil, right? Europe is saying, "We're willing to pay a premium price to make sure we don't freeze this winter, even if we have to do that with government money." It's created this bonanza that for the energy, for the fossil fuel energy industry. You know, the good news is our margins are going up. The bad news is, it's hard. You have to fight harder to get all the inputs to make that profitability happen. We're up to the task. It is something we work on every day. You know, and quite frankly, it's been going on for a little while, which is why you've seen input prices kind of, you know, our cost structure creep up. We were not expecting it to creep up as much as it did in the first quarter, but we are very focused on that now, and I think we have a good plan to widen those margins back out. Well, A, they're widening out now just due to our April results and what we see as price increases starting in June and beyond. Okay. Thank you. One last question. I just wanna make sure I understood something here correctly. When you were speaking earlier about, you know, using the tonnage for the Merom plant instead of selling it into the market, and you'd mentioned a $50 a ton margin. Is that selling the coal for $50 a ton or the margin would be $50, so you'd sell it for X and after costs it would be $50 a ton? I'm talking about the margin, not the sales price. I wanna clarify something. Those are the prices that we would receive if we didn't take it to the plant and we sold it on the open market. We wanna take it to the plant because we think it's a higher value at the plant. Now those markets change every day, and we may sit here 3 months from now and say, "No, it makes more sense to sell those tons." You know, that's one of the things that the plant gives us is that kind of optionality. It looks to me as if the plant will, you know, 99 times out of 100 be the best use of those tons, just from a freight perspective. That may not always be the case. Again, we have that optionality, and we think we're taking them to the plant because it's a greater value than selling them on the open market. We just wanna clarify that we have that option. Right. Okay. Given this instance of $50 a ton margin currently, what would the equivalent margin be for the tons going to the plant instead of being sold in the open market? Well, that's not something we've disclosed. Quite frankly, it gets a little complex because are we talking about, you know, power prices that we've agreed to sell to our bilateral contracts? Are we talking about spot prices on the market? Right. Okay From that perspective, because the plant acquisition is not closed, we have not discussed that. I think our point is, it's a better use to take them to the plant. We think that's more profitable than $50 per ton margin. From that perspective, that's our plan. You know, I think at a high level, we've talked about we expect EBITDA next year to grow over $150 million of adjusted EBITDA. Do the math. I think it's a unique opportunity to profit in a very short order when we're talking about, what? You know, seven months from now, we'll be on a pace. Right. If not before. We really think before because we really think we're gonna be closing on this plant in the third quarter. Okay. Great. Thank you. I appreciate you answering those questions for me. All right. Thank you for your time. As a reminder to ask a question, it is star one. Our next question is from John Moran with Robotti & Co. Hi, Brent. I just had a question about your liquidity and whether or not the $10 million you raised is sufficient. It seems like all that would do is replace what you sort of would have generated typically in the last couple of quarters. It also seems only logical that the banks are gonna want more liquidity if you bring Merom into the mix. That's the first question. Second is just around that negotiation with your banks. Because if you say that you can make a $50 margin on the 1.7 million tons that are not sold next year, if I'm the bank, and you could do that today, is that not a difficult negotiation? I mean, it seems like they could be in a position where they really don't have much risk left in the loan if you simply sell those tons today. I don't. They, you know, they don't care about the company beyond the loan, I wouldn't assume. Anyway, those two questions. From a liquidity perspective, you know, we may add more liquidity. You know, I think, again, we think that the closing of the plant materially improves our company. We think that we could be as close as 35 days away from that. Again, it's subject to regulatory approvals and financial approvals. We're in conversations with our banks about, you know, what that looks like today. Those conversations are positive. We have a game plan for that. As far as, is the bank gonna force us to sell coal on the open market? The bank, I think, would always, as all of us would, will always support what's the highest value position for those tons. From that perspective, no. I think they are encouraging us, to, you know, use our assets to the most profitable position. Banks don't want to tell you how to run your company. Okay. Maybe just one. They want to make sure that. Maybe just one more. You kind of referenced that this optionality that you would have if you succeed with Merom. Do you really have optionality or do you have to run Merom at 100% once you own it? And if so? I think we have. Can you buy coal from third parties or can you buy profitably from third parties to run Merom? The majority of the tons going to that plant this year once we own it will not be from Hallador. Next year will be a mix between Hallador and another supplier's tons. Do we have to run that plant wide open? We have obligations to our counterparty to produce so many electrons under our PPAs. We have to have enough fuel to do that and to meet our capacity requirements with MISO. After that point, if it was more profitable to sell the tons, we could do so. If it was more profitable to run the plant, we could do that. You know, all we're trying to say is the plant does gain us flexibility. You know, the thing we... You know, we have people call us up and say, "Well, you don't have all your approvals yet, so you don't know you can close on the plant." We say, "Well, in the unlikely event that we didn't close on the plant." As a fallback position, we could sell these tons and still be much more profitable than we have historically been next year. What we're trying to say, maybe I'm doing a poor job of it, is we have multiple tracks to profitability later this year and next year. That's something that I think the bank looked at that and say, "Well, gosh, this amount of profitability coming down the pipe, you know, could we be debt-free, you know, late next year or early in 2024?" I think those things are possible. From that perspective, you know, the banks are happy about we are right on the cusp of profitability improving. For the two-- two thousand and twenty-three tons- We should own this as well. For the 2023 tons that you're renegotiating, are you giving away anything for that? Are you trading volumes in outyears to do that? Are you giving up anything for that? Or what is your leverage over your customers for these renegotiated tons? Mostly, we've been doing just blend and extends, you know, where we will sell them more tons in outer years. Okay. Don't forget, you know, at most, half of our production will be going to Vera. The other half will be sold on the open market. As we go out into 2023 and 2024 and 2025, we dramatically open up. Well, not dramatically. We open up on some of those tonnage. We have customers now who are saying, "Oh my gosh, look at the gas forward curve for the next three years. You know, it's flirting, it's over $5 and flirting with $6." If you're a utility who's struggling to get tonnage now and you see all these, you know, this gas curve, it just keeps improving. We are seeing utilities start to talk about. It's almost flipped, where they've gone from we wanna stay really short contracted to now they wanna go longer contracts. You know, we're seeing some business getting repriced at, you know, prices I've never seen in my career, and I've been doing this 18 years. You know, we've got people in our sales department who have been doing this for 35+. These are the highest prices we've ever seen. You know, when you're into those negotiations, and a customer comes to you and says, "Look, I need more tons for 2023. I need more tons for 2024," that offers us an opportunity to say, "All right, you know, can we blend and extend these prices? I'll sell you more tons in the outer years, but I want some of that price increase in 2023." Maybe I've got to sell a few tons in various windows to make that work. Those are the type deals that we're. I don't think we're giving up anything. I think we're just doing new business at much higher prices, as is everybody else. I mean, there is an energy crisis going on. The country of Russia has been shut off from Europe or restricted from Europe, and those markets which have, for decades, gone to Russia are looking for new suppliers. The United States is on that shortlist. Thanks, Brent. Thank you. Our next question comes from Ted Waters, another private investor. Please proceed. Hi, Brent. I had a question about your 2023 adjusted EBITDA. If you can hit $150 million, what would your free cash flow look like? Basically looking at what would your ability to pay down debt in 2023 if you could hit those numbers? Thank you. Larry would probably have a more accurate opinion of that, so I'll let him answer this one. I don't have our free cash flow calculated, but with our current projections and Brent's numbers that he was talking about with EBITDA, we would be net debt-free in the fourth quarter next year. Would you start to be able to hedge some of those electrons once you close the plant for 2023? Yeah, we would be. Oh, yeah. in a position to do that. We can't do that today until we acquire the plant. Great. Thank you. We have interested parties, for sure. Correct. There are no more questions waiting at this time, so I'll pass the call back over to the management team for any closing remarks. Well, hey, I wanna thank everyone for their interest in Hallador, and again, just reiterate how excited we are about the future. Not gonna say that it's not gonna be a bumpy path to get there, but it's just we see so much opportunity, and I think we're positioning ourselves to take advantage of that opportunity in very short order. I thank everyone for their interest, and look forward to talking to you on our next call. Thank you. That concludes the Hallador Energy first quarter 2022 earnings call. Thank you for your participation. You may now disconnect your lines.