Hallador Energy reported third-quarter 2026 results and said it is moving ahead with Turtle Creek, a planned 460-megawatt natural-gas power project at its Merom site. The company is targeting a final investment decision by year-end 2026 and commercial operation in the second half of 2028.
Hallador also reported higher contracted forward sales and outlined its financing and development plans for Turtle Creek. The materials provided do not include the quarter’s revenue, earnings or cash-flow figures.
Key details
- Turtle Creek equipment is in transit to the U.S. Hallador took title in October to turbine equipment under a $350 million purchase agreement with Energy World Corporation. The turbines have never been operated and have left the Philippines. Siemens is expected to inspect and update the equipment before installation.
- Most of the purchase consideration remains in escrow. Hallador deposited the remaining $265 million into escrow, with funds to be released as milestones under the purchase agreement are met.
- Major development steps remain underway. The Midcontinent Independent System Operator has completed its interconnection study, but Hallador has not yet executed the interconnection agreement. The company is also finalizing an engineering and construction agreement and purchase orders for the remaining equipment.
- The project has a large construction financing facility. Hallador entered into a $600 million senior secured construction bridge loan with an option to term out the financing. It is the largest component of Turtle Creek’s capital plan. The company is also finalizing a $75 million super-priority revolving credit facility to supplement liquidity.
- Offtake contracts are a next step, not a stated prerequisite for financing. Hallador aims to secure long-term agreements with investment-grade counterparties in early 2027. Management said its financing plan does not require those contracts, but believes they could improve the terms of additional financing.
- Hallador set out an ambitious value target for Turtle Creek. CEO Brent Bilsland said the company aims to turn an approximately $800 million investment into $1.6 billion of value within 24 months. He also said Hallador believes the market currently assigns little or no value to the project. These are management’s objectives and assessment, not a guaranteed outcome.
- Contracted forward sales rose to about $3 billion. Hallador said its forward sales book increased 26% from the second quarter, including intercompany coal sales. The company said each of its three major Merom offtake agreements signed this year priced higher than the prior one.
- The latest Merom agreement reached the highest price in the sales book. The October contract priced above $80 per megawatt-hour on a combined capacity-and-energy basis. Hallador said the agreements involve creditworthy counterparties and include protections intended to preserve margins; contract pricing steps up materially beginning in 2027.
Plain-English implications
Turtle Creek would add natural-gas generation to Hallador’s coal-based business, making the company a multi-fuel power producer. The project remains under development: key agreements and financing work are still being completed, and the year-end investment decision and 2028 operating date are targets. Hallador says it intends to build value through development while limiting equity dilution.