Hallador Closes $600 Million Turtle Creek Bridge Loan

The Tip Desk · November 12, 2026 · 3 min read

The independent power producer booked $130.3 million of third-quarter sales and a $4.5 million net loss as Merom generation recovered after a July outage.

Hallador Energy Company (HNRG), a vertically integrated independent power producer, closed a $600 million senior secured construction bridge loan to fund its Turtle Creek Gas project and took title to the turbines in October, as Merom generation recovered after a planned July outage.

Total sales and operating revenue was $130.3 million in the third quarter ended September 30, 2026, up 28% from $101.5 million in the second quarter, while down 11% from $146.6 million a year earlier, primarily due to lower third-party coal sales. Electric sales were $92.8 million after Merom generation increased 77% to approximately 1.4 million megawatt hours following completion of the major maintenance outage. Third-party coal sales were $36.1 million.

The company reported a net loss of $4.5 million, or $0.10 a share, compared with a $15.2 million net loss in the second quarter and net income of $23.9 million, or $0.55 a share, in the year-ago period. Adjusted EBITDA was $17.3 million, reversing a $2.9 million adjusted EBITDA loss in the second quarter. Operating cash flow was a $21.8 million outflow.

Chairman and Chief Executive Officer Brent Bilsland said the company’s goal at Turtle Creek is to seek to roughly double an $800 million investment into $1.6 billion of value over the next 24 months. The company is targeting a final investment decision before year-end 2026, with commercial operation still targeted for the second half of 2028. MISO completed the interconnection study; Hallador is finalizing the interconnection agreement, an engineering and construction contract and remaining equipment purchase orders.

In October, Hallador took title to the turbine equipment under a $350 million asset purchase agreement with Energy World Corporation Ltd. The turbines have never been operated. The equipment departed the Philippines and is being transported to the United States, where Siemens will inspect it and bring it to current spec before installation. The company deposited the remaining $265 million of the purchase consideration into escrow, with releases tied to milestones.

The $600 million facility comprises $550 million funded at closing and a committed $50 million delayed draw term loan tranche that remained undrawn at quarter-end. Total debt rose to $551.9 million at September 30 from $45.0 million at June 30 after the bridge loan and refinancing of existing debt. At quarter-end, $329.8 million of funded proceeds remained in restricted cash, primarily for the turbine acquisition and related costs. Total liquidity was $103.2 million. The company is also finalizing a $75 million super-priority revolving credit facility. Capital expenditures were $57.1 million in the quarter, primarily for Turtle Creek and Merom reliability upgrades completed during the planned outage.

Including contracts signed on October 7, 2026, contracted forward sales increased 26% from the second quarter to $3.0 billion at the segment level. Contracted revenue from delivered energy, accredited capacity and third-party coal sales was $2.5 billion, with accredited capacity commitments extending through 2040. Each of three major Merom offtake agreements signed this year, including the October deal, priced substantially higher than the one before it. On a combined capacity and energy basis, the October agreement priced at over $80 per megawatt-hour, the highest in the company’s forward sales book. Contract pricing steps up materially beginning in 2027.

Bilsland said offtake contracts are the next step in building the project’s value and that the financing plan does not require those contracts to be in place, but that long-term contracts are likely to improve the terms on which the company can raise additional capital. Hallador is focused on securing long-term offtake agreements with investment-grade counterparties in early 2027 and continues to evaluate additional financing sources with a focus on structures that result in little to no equity dilution.