Hallador Energy Company (NASDAQ:HNRG) shares are trading higher on Thursday after the company’s wholly owned subsidiary entered into six-year capacity and energy contracts with an investment-grade utility operating in MISO Zone 6 in Indiana.
The agreements cover electricity deliveries from the Merom Generating Station from June 1, 2029, through May 31, 2035.
• Hallador Energy stock is surging to new heights today. Why is HNRG stock surging?
Hallador said the capacity pricing represents the highest level secured by the company to date and is more than 20% above the contract announced in March.
The agreements also expand the company’s forward sales book to $3 billion, with most of Merom’s anticipated output through 2040 now contracted with investment-grade counterparties.
Merom Contracts Add ~$700 Million In Expected Revenue
Hallador Energy CEO Brent Bilsland said Indiana’s growing investment activity is creating stronger demand for reliable, accredited power, particularly as some data center projects in other states are delayed or relocated.
Under the capacity agreement, the utility will purchase an annual average of 225 MW of Merom’s accredited capacity, generating approximately $271 million in capacity revenue over the contract term.
The agreement covers an annual average base energy quantity of 200 MW, subject to seasonal reduction rights, with pricing that includes a fuel-price floor and recovery of qualifying excess fuel costs. Based on current forward prices, Hallador expects the energy agreement to generate approximately $422 million in revenue over the term.
Following the agreements, about 95% of Merom’s accredited capacity is contracted through 2035, while roughly two-thirds is contracted for 2036 through 2040. Executed contracts also lift the contracted revenue rate from $46 per MWh in 2026 to an average of $73 per MWh in 2030.
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Advancing Turtle Creek Natural Gas Project
Separately, Hallador is also advancing its 460-MW Turtle Creek natural gas project next to the Merom Generating Station. The company submitted an air permit application on Sept. 25. If approved, the project would increase Hallador’s total generating capacity by more than 40% and support its transition into a multi-fuel independent power producer.
In September, the company closed a $600 million senior secured term loan to fund turbine acquisition, refurbishment and development costs, as well as construction of the Turtle Creek gas project.
HNRG earnings preview: November 2026 estimates and valuation
Looking further out, the next major catalyst for the stock arrives with the Nov. 9 (estimated) earnings report.
- EPS Estimate: 33 cents (Down from 55 cents year-over-year)
- Revenue Estimate: $129.51 million (Down from $146.85 million YoY)
- Valuation: P/E of 682.5x (Indicates premium valuation)
HNRG Stock today
Hallador Energy shares were up 9.01% at $14.88 at the time of publication on Thursday, according to Benzinga Pro data.
Photo via Shutterstock
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