Alliance Resource Partners (ARLP) 31 Jul 232023 Q2 Earnings call transcript

Greetings. Welcome to Alliance Resource Partners L.P.

Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. this being note, Please Instructions] conference recorded. is [Operator

conference Cary Financial Marshall, will Thank now Vice to the turn Chief I Senior over President you. Officer. and

You may begin.

Partners Earlier operator, and operating and outlook market as we those morning, welcome, our you, discuss and second everyone. for now as Thank Alliance XXXX XXXX. and results, Resource conditions results released will financial perspective its quarter current this well on

remarks, we questions. will open to call your prepared the answer our Following

our of uncertainties remarks may Before in beginning, Exchange some a are reflected a time risks, that statements Commission forward-looking of our to also to and in and today subject the time reminder include contained Securities this with and release. filings morning's variety from assumptions press

statements no the us, events or from based projected or expected. available as so. our these future of are information, And more of required has statements, new forward-looking underlying currently information results revise a in if publicly materially those remarks, actual result or whether incorrect, or may otherwise, providing partnership or any update forward-looking uncertainties or law obligation to risks on do vary assumptions to we While materialize by these unless to if one these prove

of Form comparable on discussing financial the SEC and non-GAAP between directly at Definitions and furnished our to X-K. measures Finally, differences we will are also website be press of GAAP end reconciliations has measures the most certain ARLP's which the the financial on been measures. and these financial contained release, non-GAAP posted

second to Craft, his and Executive of a I way, the our Chairman, will call our for over of with Joe the With out turn required Officer, results the for then preliminaries review President comments. Chief quarter, the begin

versus which was the $XXX.X reflect coal X.X% were total positive contracted continues and $X.XX ton, price our The sales price improvement million, impacts due Our to our included per ton per in X.X% sequential revenues of prior the period. XXXX the quarter shift order up year-over-year was at per mine primarily which year by basis, driven Tunnel versus the of XXXX carryover consolidated down up quarter strong to performance was approximately or in Ridge XXXX On was ton. Appalachia. the This quarter in primarily a coal sales sequential higher-priced XXX,XXX higher tons book. X.X%

commodity royalties segment, year-over-year our In in by were lower and million, partially increases offset per as total royalty sequentially X.X% coal gas Royalty down ton. pricing down $XX realized oil X.X% was and revenue

XX.X% gas the average Coal BOE. sales royalties BOE were pricing and versus declined royalties oil Sequentially, quarter X.X% lower NYMEX versus ton prices as sequentially. and quarter XXXX sales the realized June X.X% increased average per prices royalty XX.X% peaked gas XXXX Specifically, and benchmark oil during XXXX. per per revenue WTI

volume, Appalachia. production build in XXXX increased in XXXX tons while X.X sequential sequential wholesales to in to relates at higher sales volumes quarter. the mine a to coal coal Tunnel volumes our longwall due quarter, Ridge XXX,XXX compared in coal X.X increased X.X% quarter, during X.X% tons, it resulting million tons million of the As to inventories in the the to this Compared volumes we were There to quarter. sales quarter, moves two whereas no had X.X% moves Appalachia decreased

activities and second during of acreage Jason due were and year-over-year. the higher completion XX.X% on royalty volumes net our the to Coal acquisition oil of [ph] gas mineral and royalty drilling declined a Belvedere tons half X.X% XXXX. increased sold gas interest basis on and Oil from BOE

price increase expenses to Turning costs XXXX X.X% as expenses of realizations. impacts by costs of Segment sales-related XXXX higher quarter. higher as were quarter, to per was expenses, expense operations $XX.XX, due labor-related supplies the well adjusted and sales primarily coal during partially lower the increased ton costs. EBITDA maintenance our the for materials These higher an versus offset due sold to

the ton primarily and Tunnel increased XXXX quarter due over realizations basis, strength quarter lower sequential mine. additional gas coal, in price the prices lower a net than higher in per offset more respectively, On on Ridge I were and oil cost previously EBITDA X%, Appalachia X.X% primarily XXXX described. to X.X% and along from with volumes royalties income realized pressures which inflationary the of our lower-cost the

of quarter $XXX.X before growth our of with sequential versus Now quarter. free X.X% million cash cash increase in turning had of another flow. balance XX.X% investments the to Alliance sheet cash and and year-over-year quarter, the an strong flow generation XXXX

X.X% Our remained ratios liquidity million approximately strong included total months total of which the cash end, at on trailing adjusted million XX to leverage debt $XXX.X and Total sheet. respectively, $XXX.X balance quarter of were net and times X.XX EBITDA.

robust Our cash-generating us options attractively many is power to capital. deploy affording

unit paid quarterly distribution equating of year. quarter, throughout year-over-year. the to per per XX% XXXX our level unchanged we to that is the This expect we sequentially rate During up $X.XX of distribution an annualized and maintain $X.XX unit,

senior Additionally, of XXXX. the outstanding notes we our to managing May remain prudently due balance committed

During XXXX, we notes. $XX.X another in at XXXX million And quarter, we redeemed July $XX the notes repurchased million senior par. of of senior

with on at the result, the As cash next original purchases additional senior We par several execute million in redemptions of intend and July notes a over the flows principal quarters. with ended available $XXX $XXX.X we to aggregate million issuance. remaining

full our XXXX the to release, As few like we discussing a guidance in minutes morning's I'd of year turn state spend to this current markets. detailed our updated

mentioned remained in natural particularly of both sequentially to the Natural first the gas season. summer burns natural more for during half the the winter affected in significantly As gas-fired declined to the our quarter. and prices States demand United start Lower year XXXX. coal due options and prices during for below demand year, we overall ago gas shoulder earlier and mild slower coal gas dispatch spring competitive customers, reduced

hot near historically doesn't high weather dramatically necessarily blanketing temperatures of grid high of the and burns are the coal when in summer run with respond. impact it customers' renewable XXXX adequately of during the end is sources patterns the Europe. seen as term the turn but have the can a units U.S. Since quarter, vulnerability unable we much our demand demand, of summer baseload typically peak A in portions to highlight and

control, change our and year weather XXXX into hot the it schedules consumption, based if remain fall, into will focus our upon heading results, normal and a Overall, be persists on Furthermore, inventories of another winter. burn can committed for optimistic accelerate contracted the coal strength reducing ARLP. relentless record cost we tons year-to-date

contract export We previous and guidance the anticipate shifted described now overall and between domestic just conditions a As market ranges, mild we caused of mix full tons, our markets. updated tons. I XX.X million XXXX the year range in movement to sales coal ARLP's XXXX volumes in to to some million from in the XX down XX million million XX range be of deliveries

been Illinois View our our move volume reflect volumes lower an and Basin at extended while adjusted have operations, Mettiki longwall Appalachia our volumes Gibson to at mine. River guidance reflects

full total, the export for is or levels XX% end export XXXX is at thereby attractive year that tonnage are anticipated tons XX.X of tons. million the markets. tonnage margins. tons million The to in to unsold of supplied still Of operations, be expected of currently sales cost our balance our generating X.X lowest committed Our XX% markets, to the primarily from committed quarter

per of last $XX the to new slightly we've modestly per to end coal the of be year $XX than ton our lower price $XX to the is range for range at anticipated update, pricing to of $X chosen for top realizations a previously. down Sales our $XX by average time adjust to ton versus

our execution per for by ton. to allows to ton range solid segment EBITDA side, our improve On of the $X us operations expense $XX cost from new team a adjusted per $XX to outlook

well we move higher of half our Ridge for as longwall the to costs back third in at in fourth Appalachia, due quarter anticipate Within do a move longwall normal the Tunnel quarter. year Mettiki the scheduled the mine the extended in as

lower volume and our XXXX. DD&A, are also royalty including our the year improvement we a our ranges outlook slight SG&A $XX full a and adjustments In number for reduction expenditures. we capital of total And gas made in a guidance in to million oil reiterating segment,

the the outlook comments his I will Joe and that, With to on ARLP. turn call Joe? for for over market

results coal quarter in half and Their and XXXX. post for solid to production, morning, realized by the I EBITDA. continued and gas improvements first thanking oil everyone. entire efforts to their want allowed the my of organization net which good helped comments Alliance and year-over-year begin income deliver Thank us prices, royalty for dedication, volumes, the you, hard coal us Cary, work and

gas increasing natural impressive per our The mild by was total a in have demand, higher to results for billion XX.X% been being first entering targeted coal slower this the year-to-date globally than expected resulting growth, XX.X%, $X.X Our and lower significantly both in domestically XXXX compared half strong weather coal sales rose and performance led year price markets period, due to billion which by lower in $X.X period. by to XXXX revenues we economic ton, despite the prices.

the was of in the operations for first improvement XXXX reflects due contracted throughout of XXXX realized $XX.XX, year-over-year sold the The Segment for per versus EBITDA inflationary primarily to year. half order adjusted the coal coal pressures increase XX% prices our our of an impacts positive book. expense period, ton

gas inflationary volumes period, offset respectively, Cary XXXX described. increasing period. increases Our EBITDA gas XX.X%, net higher more the and realizations and with which sales coal, as the pressures These in price that prices both in higher in as oil lower the realized coal income in well XXXX reflect and and rose oil royalties along sharply XX% over and royalties than previously

response domestic by As adjusted production prices. Cary year lower demand our also this lower gas natural in mentioned, lower driven for we targets have to

our operating guidance Gibson XXXX. in mine, units now January original one We four are the at down from production unit South

to have previously new had expansion At timing View. County plant mine from mode units and barge River View terminal. where the be shaft the will River In we connect of project accelerate River June, be mode groundbreaking construction now completed event to Henderson site, the the at of at XXXX. eventually the to we for conveyed the scheduled moved underground project through conveyors to a end is View, to This production some announced prep new

and and Committed plan uncontracted to we our range, XX% to updated tons markets. sales international any sell of tonnage into primarily guidance represent priced XX% remaining currently

changed, market per not previously sales than upon our downward pricing has ton Accordingly, the top opportunities has view coal sales volume export sold the volatile adjusted recent of our expected. of more we end analysis. been have range While price

expenses sold On we the year lowering ton by severely find estimates same as the are per environment. ways a the continues reduce to amount for our to team volatile also in positive side, cost our inflationary

period. time additional to quarter, be XXXX to tons an XXXX agreed multiple delivered with X.X sell XXXX we over the the coal for million customers During to

see we we guidance, our in XXXX. As in updated meaningful can sales tonnage committed

expect continue in activity We the to coming months. contracting

of of XXXX As have last increase domestically an the we to and million update. markets, from international million end the to committed X.X in sell representing second our X.X tons tons million of tons XX.X quarter,

of XXXX. and We also committed for delivery priced and tons XXXX total X.X a in million

continue certainty customers to across we market all contracting the Our value conditions. supply of provide

The are not quarter on modest this revisions achieve track to view year. still this have we that our results guidance changed financial record

As and and we are price our acquisition pursued and by our in oil the curves XXXX, recent being encouraged by look beyond the royalty Group, for forward New growth we oil increase segment. prospects Ventures gas opportunities gas

growth record Many seeing next being online over next to as in significant several are of the come over years. are for also facilities stability coal projecting demand electricity of new demand the manufacturing years. several are announced numbers our customers We

announced these to customers. The plants coal-fired needs of the stakeholders increased projects in of energy the concerns for premature All loads, of large of closing the should power States. electricity Eastern to United demand electrical adding lead responsible require meeting their exceptionally the the rising reliability slowing

over to in years our growth We online higher next XX prices, X coal the also will segment support stable expectations the gas coming the demand next years. domestic expect LNG natural further X for supporting over terminals

solid the in ARLP's of and results us. encouraged closing, with first pleased front by In I'm half opportunities

tomorrow. contracted heavily improving continue balance to and book cash investments positions our meet at us our attractive energy evolving continue levels flow to the generation coal and pursue We to to of add robust needs attractive sheet our

we and in forward, is ARLP solid growth positioned beyond. unitholders and well returns cash our Looking deliver to to XXXX believe attractive

comments, will prepared I for open now the to call the our concludes questions. operator ask That and

Instructions] Thank question Martin Benchmark proceed. is Company. Nathan from first you. Our [Operator with Please

Cary. Joe, Thanks questions. morning, my Hey, good for taking

Morning.

Morning.

great job the on First, cost side.

first to little than quarter, shipments a based XQ especially However, similar production. bit I the lower expected, on

maybe of So question a multipronged to bit a start.

built. additional the inventory of behind million tons anything First, X.X

reduced mention did export guys You sales.

in look up further And second you any risk in utilities with Second, expect based XQ, will shipments there to then sales finally, half? to What Thanks. half point? the at you like feel over conversations confident pick cuts do is XQ? sales first on do that the guidance your cadence the this

to to to try remember all try your questions. So I -

running So and give up follow And primary a a our make reason I'll let the then you as of covered on increase if the specifically ton a me go the you I XXX,XXX and sure But that here, that's clip ahead second was level. production I through the quarter. first to stream for answers everything to half, see result, our to inventory higher asked.

what contract. running contract So has has - our are book consistent ratable been with been actual consistent the under run our requirements

at the of deal because right our we look under there's always look and contracts, with. issues at good that really should we're people if which have certain at So average rate, we what to be our is contracts XX% ratable

very the And contract we second we to we our customers look the expect terms half. to half, the first about feel adhering good So the as same. in

I that asking constantly for customers a there think are deferrals. us that are few

and thing for for However, what them that in XXXX, this year. do I same we our believe they they us customers should all the understand appreciate did

guess, As issue, through we I into think export the the gets biggest timing, on it market.

of a some lumpy, volume. that of to well, a take by first definitely The not does couple half the but volumes timing little. as in the somewhat customers is have much, and the We by committed that impact are

with end million other to When timing of grow carryover year, most into normal. year, we tied to not would we're I of beyond our tons would As that guidance, tons be shipments about X.X and X.X entered that million the anticipating inventory. to the vessel was of we of expect methods. look what had and just of this about we

our what factor the measure We demand be greater wouldn't be. possible on And the contract our as at expect in guidance to track XXXX saw last the to believe coal of when don't we're current this I is, variability would way we contracts I think look we takes So export think we year, the for trying comparison, there's - under one think ton that. XXXX, year. we lot what our to we would and you for was always but It's tonnage. things time for last as starting what look it last at a defer than delay compare about encouraging against XXX,XXX to customers months, we change, we signs to and XX this year, any

comparisons not in coal you the half in significant when at see shipments you're in we saw what to So our first looking view. as 'XX versus going start the 'XX, on difference

July, hot it's this like abate seem going to in We've soon. seen spell that and anytime doesn't

The at we this economy, year, is be how curve positioned So going we running depending XXXX. and exactly that we're into happens positive burns. natural the the is into approaching wave think believe long which well heat really to in for constructive the what XXX gas winter, still going coal end of and goes that's on forward the

overall, under So guidance our willingness terms our customers that we've not there adjustments and demand. pleased their optimistic with to that the take should I'm the of be continue contract. on further any I'm very to given

be, production. will prepared down our comments, we We slowing as in said

the projecting. for want fourth So cadence third you that the on to Cary, specifically don't I if quarter comment know on sales we're and quarter

Yes.

you each yes, would our quarters. the as anticipated one in to ship look fourth third volumes the of quarters. think, two pretty look it's that at between I we a the quarter, anticipate in you and ratable at what is the expectation take just When

the we back did and overall in our take a half first shipments would in look you when year. I guidance, into of pretty equal at the quarter be fourth anticipate to the and what So third

our year, what year It's not and and this well. this expectation last we really well. time result to that's unusual We in at similar were last that for experienced the year as was a that as situation,

do puts things great regulations it'd EPA talked some potential maybe there, the looked production job over look and 'XX as XX there's get we securing affect as ahead, and maybe additional we few next and on the demand ahead? And flowing the to then still thoughts like out be And Joe, production your the but rate you achievable those overall it Really 'XX 'XX tonnage And to at takes, know that's I you online color side. million for maybe appreciate years? just you looking run feel some ton even you coming of your beyond obviously guys. U.S. coal how good around. industrial this on think 'XX. for Great. called about that is

will we yet So got at determined question, we've rate a plus. believe that the we to over the been over to dozen solicitations have yes, answer most in years. the next at tonnage. out negotiations look 'XX for them Most for is million our probably and market run period a to do of be your half book several similar back fill we their sustainable When first that the are customers be the believe $XX are X-year in half, of

want do that believe go we base our higher to market. a million future, to could for on at and ability depending plans customer the maintain minimum. So the It see export we $XX our the their do what with in we

following X.X So half solicitations are that, if export year. the tons number to we're million next $XX export on up possible depending back this the over successful something the the down million, ability in year back targeting on market. It's we year to flex some that the go into about and would with market

in often was rules, major force everything that to versus violation. are is specifically questions year The We Supreme trying there the [ph] that they're essentially this the accelerate Virginia decision transition. to believe in So of they West the the result out doing by EPA Court. last EPA, EPA

to of rules So coming to legal there's on prevent going those from lot effect. a try activity into

projections some both close with signs to that as demand. I demand well don't gas. electricity the think continue that to administration for the still fossil and as trying give we you far and different to natural there warning plants all are electricity. I our grow that are growing to That's that for in understand utilities quite generation still as the There's fleet. to can pressure that maintain of engaged need fuel that several RTOs meet the coal as believe

about we we So about were output. transition about concern our Elon are week, hearing - a at saying. the electrical and we that we're math, and We the Pacific basically the in investments saying understand load. utilities we're just electric investor-owned good is And in the electricity pretty by basically believe demand. feel a He's headlines opportunities are that's was Last at how that to of make looking of good urgency future, know Electric spoke demand to compared just he much I but area what be. quite will and thing bit everything same tripling demand this feel that for electricity there's the people insufficient to require Elon biggest the don't definitely Gas a is we're Musk his low there seeing Summit. predictions don't going of

coal the plants. replacements And in so getting still for and delay you see

his your is getting But level to raised you production policy. beliefs. customers caution delayed think we hopefully, that we're think and saying we're going from some there's President double down hearing practically the that's just need decade for I maintain on be what talking next But speaking, to to in and the continue now. being to we continues Biden So by to industry, it's input

little are tons, current management engineering the rules hopefully, this have million wait we good We'll what demand engineering - the see at XX where politics at and But over bit. at saying. saying to grow feel can about our we or it officers staying a the and

maybe I if Very finally, last Thanks. one And then just helpful, could Joe. question. ask

some in position, or on liquidity side cash you the Can mentioned would on ability the opportunities Venture thought size great your at the gas investments. your timing oil guys affording talk look be maybe and you any is guys marketplace of about in seeing multiple New those currently, are well. to as the You side? you And

all is oil gas EBITDA still as what is to prior and before, committed and into On the reinvesting oil everything year's that same we and continuing we've gas we're the the space. to side, and be indicated you

probably So competing with through to invested in the well, the $XX second leaves as packages. our million call we've for $XX what ground around $XX so, or is it million game quarter, we had opposed we and guidance million that

of And closed million we just we've completed investments. $X July, $X of that in And around first the half. million in

so there. As we we we are would think of balance or there's there we're million year, the the look $XX - to opportunities another - so, out

be So expect to our segment. and royalty will gas investments in we I would those in complete that segment, able oil our

to on positive continue that long be term. We segment for the

we to don't continue We into will think vehicles, changing oil in it's grow. the the as just grow vehicles as I see record world in fast really belief electric not with levels. electric We see We're the to going believe. that even at demand convert that

flow to getting, we what attractive. which to we and demand with the comparable invest returns But we've to the that continue cash be oil, believe opportunities been get find see great that and we'll for refining to them world

think pricing, With is to which domestic on, natural also will be operations. LNG as should going segment, our the we our benefits well, only with but coming not there which demand gas, impact coal benefit growing terminals royalty

the to as On perform is Matrix expected. New side, Venture previously continuing we

are looking Ventures the opportunities to invest several area. also in at We New

you service better I talking earnings talk our that by on you next is the opportunities to opportunities and about to solutions Tennessee, which Michigan right from with and give are today, focus have about on Kentucky, the investments right hopefully, which the battery cetera, the issues, into color nothing energy Our batteries, continued there. aspects down we're through to territory. we'll now are et basically able itself get call, presenting Indiana, that other of storage belt in primary Ohio, be

of in Great. leave those Best there, it half. Joe. comments, Really appreciate second guys. the I'll luck

you. Thank

Our Capital Mark with proceed. next question is from Noble Please Markets. Reichman

can thank Good going I you for morning me? - was hear you and to taking question. my

Yes. hear can We you.

Okay.

I dial other having on the server on iPhone had with we So problems phones. my because to in were the

question low your at even at like looking guidance, the of have the still the So sales mean looks end you're second is going sales, it I me I have modestly to in half. higher to

think fell has I really the price. relatively really wildcard me, considerably steady, guidance only Appalachia pricing quarter pricing shaved versus For the is at basis your end. second suggests in the that basin on but Illinois been the off total first the $X quarter. But top a

just So between of expectations could you maybe the on remainder the for illuminate basins year? your pricing the

Yes.

totally international focused we're on So markets. the

much spot market. to Kentucky So sell anyway. doesn't there no have any XXXX. we And if mine product, activity anticipate is really a and really don't don't one year there's the open those that there'll market premier basically the We off have thermal you for at trade look to indexes. East be in this really We it

back parts a as in really the pricing a balance decrease down that's these reduction export at that, there's that on planning of some market a pricing, solve to back getting sales. for the basis, lot you're the as net good of a build logistics that export to and our in mine. When far of we're different So the reflects transportation delivered so the can at looking API-X moving of in

are year, those we we back several tons. we estimated place what believe partners be And going with volumes. when and those of on priced conservatively export our to going we're got think we've those this that half trading the in confident can So we conversations sales we for opportunities

and as we can based as stays on right with see So feel there's guidance we hard our it's conversations would that is have, we guidance. catalyst it good surprises. demand about really we to to about where execute our now, good And very consistent But always long feel continue change now. what the

quarter and what Appalachia Well, kind not remains pricing the implies quarter. I guess expect Illinois but I rebound to is fourth but the maybe in the pricing the a assuming at quarter, an high in third of Appalachia, you as Basin relative getting in of second improvement constant. kind in relatively as maybe it would mean, I'm first

right think Illinois basin I now, weaker little half. a the in I second have

I I just stands and think price around quite as full year a bit a coal said, than of But sales fourth model quarter Appalachia now, thinking? third the per like quarter Is on with you're quarter. that ton the in the does basis. I'm consistent that the kind XX in the higher But imply what second

of as pricing look we I the second second in we look quarter. look Mark, kind to particular where slightly But know half were higher. as we of side we from at Appalachia quite the as where we speaking, in than the it on. second where area zeros at at our think by on quarter. Yes. what you back of Generally the anywhere year, piece in related It's we kind were a mean higher X% bit that I than the the half to don't of higher anticipate Appalachia, X% do it guidance being the in

fair... Okay. that's And

Mark. contracts too, are And those

So and book domestic mean and delivered what market we're like expected looking at is our on for contract projecting because side not looking I on the contract... to the be it's we're

Yes, it's due reduction, was previous G&A. your the this got question that's pretty I guidance. spend? $XX firm. first mean full I just second the XX% that firm. you expense were not the expenditures. you there. just any guess lowering But on And It's do then of visibility attribute point, mean, At good guidance and decided I the year you almost you've what of G&A second the pretty Or your to with would - you that expenditures there quarter track that kind - your to were million guidance? expecting

and when that side. I you year get of the G&A, that are results impact we results year just terms the at full back the in it's to and think anticipated G&A what really had into on works looking what full impact

of terms kind spending was your So significant kind full But it guidance. pretty on year based in like adjusted previous that guidance - I made $XX that, of Well, the million. tracks first was mean kind with around $XX of to and said, Okay. that of the new relative half million you I

lastly, just then one. question and was this think kind And to I good earlier, of that a goes Nathan's

flow, about million, on free very have what, You very cash strong the million, $XXX coverage dividend. strong $XXX roughly

So kind you down thinking recently. how about just allocation? you know kind are capital basically debt of I some of took

are view that you'll managing get cash you kind you the just overall generating? on active just of about you're flow acquisition front? your the So Or of do more how think on kind thinking

Yes.

I indicated plan to at previously, So distribution think we've $X.XX sustain we a quarter. as our the

cooperations provide Secondly, announced. our previously we projects capital that we growth necessary will plus the to the maintain

CapEx and So a low timing. at little is end, I guided, maybe ranges, right the tell precisely what The it's there. within commitments maybe But much be pretty are those all will can't lower.

to. we gas, and Oil talk

And is in to so these those New the mentioned, Cary opportunities, which the it to balance look then we investment pay got Venture in at. prepared continue poorly we've primarily gets then are space to we will his remarks that paydown, that debt notes. And off looking senior

would at investments good to make two in in type vehicles. And us that go And various areas asset actually determine fifth could think flow of that year be different how a in give to investments. those back terms look if assets could those to into you just cash visibility was could ago, ways we that was vertical One talked long-term that investments how would investments. we of we I about

an X we off of based think years the matured investment philosophy. of of sort I

to do that the may in minority be with But when where long to we - growth I position invest a still fact, think some we've for yes, invest we businesses. businesses more we've those conjunction in businesses experience opportunity some types can, focus we zeroed to on in in that, had alongside with businesses the industries or those of it's particular going in building start definitely the term. we

storage, sector the battery again, to area industrial that for be demand we're, electricity battery going electrical just an the We that in sector increased think with both the is well as area. And focused huge of in demand. the as

participate seeing can how we're on in that So and focused we that. area

be made that $XX make anywhere relationships. make per much those good sizable so that to or to typically several our see that ending we've on we opportunity a and opportunities But million the return from focusing are not we sizes have The strategic to one million have $XX are but investments, investment to investment got we'll to over able we so have two next company opportunity years. X grow to up enough it the to XX

give to you - prepared hopefully, specifics position we're my specific that I in and earnings we're hopefully by but making as in about talk some comments, investments on those we're successful And be I next not encouraged able think, a will be So frame, the more what by right by we'll that call, we're to seeing. mentioned now. and time commitments

appreciate so helpful. Thank do very you much. I really it. That's

well. just businesses The say other us thing I would allow bring more in invest will debt find - we're to that to looking as some that hoping capacity we're opportunities on to

so debt businesses type capacity be as cash into it that additions we flow generating would additional allow would XXXX. for these look So

thank very much. Well, you

Our Dave next Stonegate from Market. Please with question Storms proceed. Capital is

morning. Good

morning, Dave. Good

start. to want Just

prepared savings in on cost that you've your some measures started. mentioned You remarks

Just wondering us a if more looks little could that you give like. what on color

to staff main obviously, we've efficiency. to where valuation most mine plan what of at everything trying Everything to cutting able some operate needs goes got to efficient That's for to try the by invested production. full capacity the back back that ourselves is, determine to be

decide allocate how we that. But that. focused guys We have to are our do on

year that needing that ensure an were is actually supplies. we more area and we chain supply supply materials think than to I to just had we last needed buy

to that has over chain the has supply improved. us year, - - think allowed the years the with I last

back in for but it reduction allowed really small expenses, productivity. to just gets that's some So

second In part, the was seeing we're what productivity longwall having the not at large Ridge in quarter just the by moves. Tunnel

cost the and So to us. productivity most key definitely for true that's is cases, in

threat It kind helpful. of touched Very of this there labor any around? especially labor, with as of capacity. staffing And like on your in it of reallocating just tight some losing market move people ships. you you sounds full Is you're

little but have people no. head a or bit transit maintain some We to that count. little have We're had a our left, trying

to to that's in areas, do we've us it And we're And once these projects. to that. more of not allow as be but construction we the be able so why will a far, term, some couple been through may short productive again, repositioning productive get

one the move area the at got example, a the in into and River new where View extended another into at longwall moving we're that is We've moving Mettiki we're new longer area have panels.

to panels. But to. this is, where designed of with reduce a we our there panels the moving lower development market that so with future for the go opportunity needing otherwise our cost And go differently. we're short - could have the we have shorter panel. in positioning for but great was next the has we to given longer term, year the us felt production what would should like than just been and length a up that a So And catch give ourselves that ahead will

production basis, headcount targeted we last we XX were headcount, but started our the is million more targeting quarter, When but we it XX - we're level XX. to So from a went ton the maintaining compared to to. year,

at we're XX. Now

we're So this we but X still level able at we the feel is or - last so maintain has we're the we where months labor slowed can to level. like attrition this maintain to tight, down can over and –

I That's great color. could. if you. Thank One more,

that you Just a acquisition moderate. you coal customer any inflation helping to new Is bit, have have comments new little of stabilize prices acquisitions? any the environment, given customer that started to drive around started

quite while. mean say wouldn't new in this been a we've acquisitions. I I customer business

most which targeted. is we to XX the sell next that of we've So what want years, around those be to for

hopeful solicitations go had more pick some conversations we as we'll happens market could that these know or have But through have up we're where that whether not. some we to share. We

that we the or want very able then book And can. a to - it to that the on we right next decide pull targeted to back beyond now, the whether have for But we'll - grow that be allows international and X earlier, run so side years $XX $XX or year we'll that million, and confident can I to domestic we try at rate will mentioned $XX to us say the grow production million we sustain hope But not and believe this a million. then domestically, the beyond we're XX as I'd we're if level, little stay at our maintain bit.

very Understood. Thank you much.

next Our Research. proceed. David Marsh Please from Singular with question is

Hi, good morning. Thanks, guys for taking question. the

notes notice? are Are Just it in? those parameters point around XX at what what callable touch par your quickly. are Is wanted to the they - real calling at this days the [ph] continuously And on

on required Yes. in are par that, XX-day your generally XX-day question are yes, like it's just callable To those. at David, said, that time. provide - to call a to you we And answer they any a period order notice

Got it.

down quarter. And should And you a part the put interest the so expense of brackets in some that continues that quickly maybe of as good expect down? off? to kind continue that to we partial to you in is in decline I work obviously, call, - to those to can put how expect here some bit terms continue around come

right in a That's to decision in at process me. call. conversation been to think current quarterly to relates The the each to similar do have notes, consistent call continue doing is good we I to remarks what consistent time But the now those, it a for assumption would we basis. that most up recent as senior a price call my expectation, the we'll something stock quarter. as obviously I make here current to that think mentioned I on prepared be

for really of this environment, that's it's awfully flow. think in Yes, I tough that's to use definitely helpful. consider refinancing cash Okay. And themselves.

thing the mean, a year-over-year. gas I gears your nicely, BOE shifting has year-over-year. I nicely it's that XX% grown side, little on bit. sold really and One noticed oil really very Just is up

obviously, investments paying a have the are mix these the here. And bit clearly, you been guys gassy. or to guys up making climb that I oil know is bit, starting is dividends. little back you for that little So XXs a

you you terms to of could game oil talk creep that for maybe that change as price evaluating realization we does as need up. half How does closer on of well, nat to And get But see just back to you just continues what better how side back of type for to kind about the last the the change? acquisition in do opportunities directionally guys levels? year guys gas

uptick think the most release the we've factor - in oil prices. guidance recent I right in now, this given in not the did on

have is of most our be think have I continue We too. bit most as mid-composition, more on still little I but focused think in the recently we're bullish our a we gassy, acquisitions that as we Permian. look more at And to been Delaware acquisitions, the gas we think still about oil-based. but

and with focus to continue think opportunities. Permian doing been what our we I on side consistent all will be and target all the but really primarily, will royalty the look we've at basins

and think I that standards, have deal we So are good flow. changed not some our underwriting seeing we

for both and still evaluate. continue to So there small there's we'll packages and that investments, direct out some

guys very leave appreciate it. the to for the call. much Thank next it. I'll I color. Got you,

proceed Please is Arthur next ANC question with Calavritinos Our Capital. from

Hey, Good guys. Thanks morning. for taking my question.

couple a Just things. of

you any the bite On senior there when minimum notes? sizes guys question, Cary, are the financing call

there's what basis. a bite that on really call calling. They're us no we to callable up whenever really, there sizes. rata amount designate - them no minimum we No, are It's pro to

pro that, holders quarter. its could designate rata million do this back notes. if those we we opted wanted do the of out we just last amount do we $XX to to whatever So in to But basis million, $XX

was it. the I you're flows, it cash you're your this? how the And feeling the how it the be like Or on that... way month of to probably whatever, look decide or like you with is end going right, seems depends mean matching where I the cash at at It quarter,

future And That's right. Yes, that's for cash opportunities flow. correct.

almost he point Got thing I talking And or weeks the how sorry, was coal the like is number the shocked seems was [ph] were right? displacing EV it conference. color much the electric I'm sales. how PG&E from where mean the with transportation, then of when is cars. demand, question that much morning fleet. this it's great. get point is the a any And on coal days. electric early, electric it's - it. displacement, where - shed X% on this could Musk at unleaded power We're to But car this go second early finance was, were starting And All Elon about it's right. got because that X away demand question we like ago, I but I'm few new for the kind feeding I on think it's Any we that do country you point cars the be color in at with almost to auto would but X% gasoline can like what like we to but sales

Yes.

two starting the mostly we most - is So the of cost EV. EV different what the seen One mean, that issue have big like I just factors. three or And with space, the their is OEMs pricing and per you're see demand vehicle stimulate models try come have the really reduced by to market out. share many more try to because to so $XX,XXX or to get

The second call a well, they factor gets - into the anxiety. range

over One going that next years. that's is announcements the out they're Tesla, last come X so and with been since and GM going couple And have their to roll Ford, of partnered believe, call. to where there's I open and a have our with network out

but to I think, over 'XX. 'XX, it's and be going immediate, not fully that's operational, 'XX roll by So out

talking $X in about billion starting you've starting European out government and building together projects. for go by another bid has the network. place, Then put announcement finally manufacturers and of the other - own numerous top to out we're manufacturers of to that seen NEVI program coming the the from On those from their the primarily see and states

see eliminated say years, anxiety EVs. feeling on to to a the customers X.X support would on ability highways have range to the of of robust stations more you're that next would going years the safe it purchases should give I to over a pretty So the charging where network X

to battery all belt the commitment, think by the I the out. OEMs, governors these not only build but around these

didn't which back And factor be credit is auto in assembly in type that's America. discussed. manufacturer constantly materials America is of or I then to some mention sourced certain the credit, the battery third per or vehicle, to being the manufactured The a $X,XXX percentage the an being also that tax and/or tax requires of area

that are make I to $X,XXX think that - administration available. opportunity they've expand the credits this when sure adopted has regulations

at the fast look And so with I area goes new engine. point and to the we that when seems ventures is think anybody's our be we But How price investments combustion about facilities competitive you at in for at battery of in look that the all are between manufacturing announced. XX least megawatts, sometimes facility talking every manufacturing these megawatts somewhere space, XXX hear guess.

out are compared And less would significant high, be officers megawatts X,XXX when business for past. load looking historic to economic States that's a projects much XX to move in development to XXX to the XXX. to

to at want to new are guys and hear large be continue loads, we're And can't only this they to saying pay They to transition and capacity. major no they you continuous. Perk looking add and rates. attention concerns, speed you [ph] that's build do plants have and but because see capacity these we're to why not of want not the sinks. we plants So interruptible And close starting better all

think that I demand for gone electricity definitely So has up.

candor question to whether your many years buying people it next that goes or a see I of how school that just think it year, as said that earlier, flash. back think, everybody, going my It In actually people, high X underappreciated will fast through? whatever it's speak in And family and or graduation have years. to and to conversations, go can by. we be. [ph] that to is to out saying I when a and roll carton be I've X what or think been seems the within go about college I speed at be I this just see their did say, when how

determine So public are now that and making the your decisions to we're have as we we, question. policymakers to investors, recognize to right going answer

business think usual. don't just And have so to delay just we time and as

to have demand. in this in of growth significant anticipation gear really electricity up We

if the going And usual. for have we we're therefore, can't come to low-cost that realize do business and to energy it's to as - reliable, time policymakers to table

terms these to going meet factor confidence have It's you of I because to we're closures bottom if that have line. going electricity. to to that's thinking deferring in have We in of and they're this why have that some start demand, demand growth,

to got are renewables electrify to that look don't America, do the I want still storage he's adding cannot we a all is a renewable - electricity know because you dependable. at level have to to that's that we And capacity it. just installation have battery

plants nuclear have in So those your are to plants, at really and fleet. load base look you fossil

answer that So States. have I better within I'm hard you'll - focused on would what load - precisely. demand Eastern question exactly say is and idea a years, of for your it's directionally, X But United the to

have good we demand needs have So reliable therefore, what for XXXX about for load that where to areas we idea very have I provide the to and what be market, we'll exactly capacity energy. think a to

of Yes. cover these enormous of interesting. it's great mills, story had A Siemens, in weeks problems couple equivalent ago, who the German are a engineers. GE, power, And [ph] Barons having big and wind wind optimizing

of So may mill deliver the like electrons. to far what's on a fall short win wind what's played boiler

find - seems we out. just motion, it's it So like in happening slow when

So - all right.

in there some loan. know in delayed M&A on? the there - then But a Permian, going for there's are royalties right? because don't I dysfunction And they're of on proxy it some seems buying public they're a getting fight in know gas than So and whatever, the like opportunities normal Permian royalty large oil company, if more these having I don't stuff. there's the

normal. I there's would any say not than more

you But prices. got might last wanting be the to at decline, as what - starting adjusting going sell some So start then those nobody saw of after to it was normal. sticky, the price year, new you

of to our think would look our adequate underwriting without standards. And I So modifying perspective it us to terms for investing flow million in $XXX way and there's at our deal lens policy from our a year. that's the maintain

several So returns to have as the callers good. mean, and I of hit stuff. we been about the our in at But our earlier think think as read they're have very pace - We've able and you job one of good to been of made to done said, of very going level drilling. think Permian, I the come. the can for same lot And our investments continue the I producing targets a a years guys we've assess to trying

be as cash royalty owner, a we as us feel like to in for flow purposes want for to where XXXX. So be it's we a complementary we look investment our to great

make And big too an it like difference. Exxon you're where the right not like a where size, you're doesn't

and - you're not You're small. too

good in... a got right? You I go size mean, then,

Yes. think so. We

for Thank taking great. questions. much you Okay, very my Thank you.

you. Thank

have the would We reached closing to session. question-and-answer back over end of I for the our to comments. conference like Cary turn

on everyone continued morning to and this support And also call, operator. the you, interest your and well Alliance. appreciate as your in we time Thank

time. Our quarter currently the that October, day. to Thank next and everyone and XXXX concludes us operating expected will for hope in is our we join call discuss occur at results again third financial call to This you. our late

you. Thank

thank this your You may time, disconnect your participation. lines for and at you