Hallador Energy : Investor Presentation – April 2025

Published: 2025-04-10 11:14:05 ET HNRG

POWER WHEN YOU NEED IT

HALLADOR ENERGY COMPANY

HNRG

April 2025

Hallador Energy Company (Nasdaq: HNRG)

Hallador is advancing its products up the value chain to drive even greater margin expansion

Hallador Power Company (HPC)

Sunrise Coal, LLC

Hallador has a rich 70-year history in large part due to its Investment Grade Customers

Hallador has a

~$1.6 billion

forward

contracted sales book

Investment Highlights

High barriers to entry in a supply constrained market - Hallador owns 100% of its generator interconnection, creating an investment platform for decades to come

Forward sales are now at significantly higher average MWh

prices - lower priced contracts expire after 2025, providing significant margin opportunity going forward

Large open position for Hallador Power starting in 2026, allowing for 10+ years' worth of revenue to reprice at significantly higher margins

A high percentage of margin generation is expected to convert to free cash flow, and high contribution margin

supports ~75%+ of gross profit growth flowing through to Adjusted EBITDA

Current State of the Energy Market: The Intersection of High Demand and Lack of Reliable Supply

Rising demand for capacity and electrons

Building of datacenters, electric vehicles, and onshoring of businesses is straining the electric grid with demand projected to exceed supply in the near future.

Intermittent fuel sources provide fluctuating supply

As renewable power generation gains market share, the inability to turn on renewable energy sources makes the overall generation and grid less reliable.

Need for reliable supply

The grid needs reliable base load such as coal, natural gas, and nuclear that can be turned on to meet demand or reduce the energy instability in the grid.

U.S. Electricity Grid

U.S. Electricity Demand (TWh)

Mix Percentages

Data centers, EVs, and onshoring are

driving a rapid increase in US

electricity demand

100%

7000

80%

6000

5000

60%

4000

40%

3000

20%

2000

1000

2020

2023

2030

2050

Other Renewable Sources: Hydro, Biomass, Other renewables Intermittent Source: Solar, Wind

Dispatchable Sources: Coal, Gas, Nuclear, Petroleum

Total U.S. Electricity Demand (rhs)

Source: (1) EIA - Annual Energy Outlook 2023; EIA - Electricity Data; McKinsey - Global Energy Perspective 2023; Ember - Global Electricity

Review 2023; BCG - The Impact of GenAI on Electricity, (2) America's Power, February 27, 2024

Growing Demand and Grid Changes are Leading to Energy Instability in MISO Areas

NERC rates the MISO area as having a "High Risk: Shortfalls may occur at normal peak conditions"(1)

Capacity Shortfalls

NERC projects a 4.7 GW deficiency in generation resources from 2024 to 2028 (1)

Dispatchable Resources Needed

"Until new technologies become viable," over a decade from now, "we will continue to need dispatchable resources for reliability purposes" (MISO) (2)

Generator Retirements

"We are retiring dispatchable generating resources at a pace and in an amount that is far too fast and far too great and is threatening our ability to keep the lights on" (FERC) (1)

Source: (1) America's Power - January 04, 2024; (2) America's Power, February 27, 2024

Map Source: RTO Insider / NERC

High Risk: shortfalls may occur at normal peak conditions

Elevated Risk: shortfalls may occur in extreme conditions

Normal Risk: low likelihood of electricity supply shortfall

Merom Power Plant

Merom Power Plant Facts

Hallador Has Extensive Open Energy Sales Positions to Capitalize on the Growing Demand and Market Price Increases

Hallador Power's Open Energy Sales Positions* (as of December 31st, 2024)

29%

71%

44%

70%

82%

95%

100%

56%

30% 18%

2025

Open

2026

2027

2028

2029

2030

2031

2032

2033

2034

Hedged

Source: Hallador Energy

*Assumes approximately 6 million MWhs of capacity per year

Hallador's Vertical Integration Maximizes Margins on Growing Price Curve Given Cost Controls

Variable Cost to Produce - Highly Controllable

•

Hallador owns and produces fuel (90% of total

variable cost) used at the Plant, reducing supply and

market price risk

•

Fuel assets are located just 20 miles away, minimizing

transport risk and cost

Forward Wholesale Energy Price Curve and Variable Cost Control* (USD/MWh)

Margin/Profit Opportunity

30 ~90% of Variable Cost is controlled

•

Ability to source local third-party fuel, further

optimizing supply risk and cost

•

Fuel represents 75% of total all-in costs for operating

Merom

by Company owned Fuel

• Plant fixed costs are currently covered through

capacity revenue

2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034

*Reflects the forward curve at the point in time in which Hallador stated it expects to transact with a data center

developer at prices above the forward curve

Disclaimer

Hallador Energy Company published this content on April 09, 2025, and is solely responsible for the information contained herein. Distributed via , unedited and unaltered, on April 10, 2025 at 15:13 UTC.