jun12fin8k.htm
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 
 
Date of report (Date of earliest event reported): August 1, 2012 (August 1, 2012)
  
 
HALLADOR ENERGY COMPANY
(Exact name of registrant as specified in its charter)
 
Colorado
001-3473
84-1014610
(State or Other Jurisdiction
of Incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
  
    1660 Lincoln Street, Suite 2700, Denver Colorado
 
80264-2701
           (Address of principal executive offices)
 
(Zip Code)
  
Registrant’s telephone number, including area code: 303-839-5504
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
r
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
r
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
r
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
r
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
   
 
 
 
1

 
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
 
 

 
Consolidated Balance Sheet
 
(in thousands, except per share data)
 
   
June 30,
   
December 31,
 
   
2012
   
2011
 
ASSETS
           
Current assets:
           
Cash and cash equivalents
  $ 36,258     $ 37,542  
Accounts receivable
    9,145       6,689  
Coal inventory
    3,257       1,863  
Parts and supply inventory
    2,161       2,202  
Other
    93       580  
Total current assets
    50,914       48,876  
Coal properties, at cost:
               
Land, buildings and equipment
    141,027       137,707  
Mine development
    66,976       66,614  
      208,003       204,321  
Less - accumulated DD&A
    (50,201 )     (42,493 )
      157,802       161,828  
Investment in Savoy
    13,145       12,133  
Investment in Sunrise Energy
    3,834       3,297  
Other assets
    8,949       6,294  
    $ 234,644     $ 232,428  
LIABILITIES AND STOCKHOLDERS' EQUITY
               
Current liabilities:
               
Bank debt
  $ 12,500     $ 17,500  
Accounts payable and accrued liabilities
    9,293       10,471  
Income taxes
    653       5,125  
Total current liabilities
    22,446       33,096  
Long-term liabilities:
               
Deferred income taxes
    33,464       31,128  
Asset retirement obligations
    2,347       2,276  
Other
    5,693       4,935  
Total long-term liabilities
    41,504       38,339  
Total liabilities
    63,950       71,435  
Commitments and contingencies
               
Stockholders' equity:
               
Preferred Stock, $.10 par value, 10,000 shares authorized; none issued
               
Common stock, $.01 par value, 100,000 shares authorized; 28,316 and 28,309 shares outstanding, respectively
    283       283  
Additional paid-in capital
    87,153       85,984  
Retained earnings
    83,216       74,685  
Accumulated other comprehensive income
    42       41  
Total stockholders’ equity
    170,694       160,993  
    $ 234,644     $ 232,428  
See accompanying notes.

 
2

 

Consolidated Statement of Comprehensive Income
 
(in thousands, except per share data)
 
 
   
   
Six months ended
   
Three months ended
 
   
June 30,
   
June 30,
 
   
2012
   
2011
   
2012
   
2011
 
Revenue:
                       
Coal sales
  $ 62,107     $ 66,101     $ 32,487     $ 32,136  
Equity income - Savoy
    2,498       3,123       680       1,681  
Equity income (loss) - Sunrise Energy
    32       544       (24 )     119  
Other
    4,494       1,757       2,032       (272 )
      69,131       71,525       35,175       33,664  
Costs and expenses:
                               
Operating costs and expenses
    37,249       36,610       18,816       17,902  
DD&A
    7,750       6,736       3,944       3,382  
Coal exploration costs
    1,122       272       703       151  
SG&A
    3,660       3,401       1,805       1,657  
Interest
    528       706       257       342  
      50,309       47,725       25,525       23,434  
                                 
Income before income taxes
    18,822       23,800       9,650       10,230  
                                 
Less income taxes:
                               
Current
    3,876       3,147       1,992       1,310  
Deferred
    2,335       5,920       1,200       2,465  
      6,211       9,067       3,192       3,775  
                                 
Net income*
  $ 12,611     $ 14,733     $ 6,458     $ 6,455  
                                 
Net income per share:
                               
Basic
  $ 0.45     $ 0.52     $ 0.23     $ 0.23  
Diluted
  0.44     $ 0.51     $ 0.23     $ 0.23  
                                 
Weighted average shares outstanding:
                               
Basic
    28,312       28,089       28,314       28,133  
Diluted
    28,719       28,617       28,675       28,587  
                                 
                                 
_____________________________________________
                         
*There is no material difference between net income
and comprehensive income.
                         
 
 
 
See accompanying notes
 
 
 
3

 
 

 
Consolidated Statement of Cash Flows
 
(in thousands)
 
 
 
Six months ended
June 30,
 
             
   
2012
   
2011
 
Operating activities:
           
     Cash provided by operating activities
  $ 13,700     $ 27,861  
                 
Investing activities:
               
   Capital expenditures for coal properties
    (4,229 )     (12,558 )
   Investment in Sunrise Energy
    (506 )        
   Purchase of  marketable securities
    (1,253 )        
   Other
    83       (121 )
     Cash used in investing activities
    (5,905 )     (12,679 )
                 
Financing activities:
               
   Payments to bank
    (5,000 )     (5,000 )
   Dividends
    (4,080 )     (3,505 )
   Other
    1       578  
     Cash used in financing activities
    (9,079 )     (7,927 )
                 
Increase (decrease) in cash and cash equivalents
    (1,284 )     7,255  
Cash and cash equivalents, beginning of period
    37,542       10,277  
Cash and cash equivalents, end of period
  $ 36,258     $ 17,532  




See accompanying notes.





 
4

 


 
Consolidated Statement of Stockholders' Equity
 
(in thousands)
 
                                     
                                     
   
Shares
   
Common Stock
   
Additional Paid-in Capital
   
Retained Earnings
   
AOCI*
   
Total
 
                                                 
Balance, January 1, 2012
    28,309     $ 283     $ 85,984     $ 74,685     $ 41     $ 160,993  
                                                 
Stock-based compensation
                    1,196                       1,196  
                                                 
Other
    7               (27 )             1       (26 )
                                                 
Dividends
                            (4,080 )             (4,080 )
                                                 
Net income
                            12,611               12,611  
                                                 
Balance, June 30, 2012
    28,316     $ 283     $ 87,153     $ 83,216     $ 42     $ 170,694  


*Accumulated Other Comprehensive Income




See accompanying notes.





 
 

 
5

 

 
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
(1)  General Business

The interim financial data is unaudited; however, in our opinion, it includes all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the results for the interim periods. The financial statements included herein have been prepared pursuant to the SEC’s rules and regulations; accordingly, certain information and footnote disclosures normally included in GAAP financial statements have been condensed or omitted.

The results of operations and cash flows for the six months ended June 30, 2012 are not necessarily indicative of the results to be expected for future quarters or for the year ending December 31, 2012.  To maintain consistency and comparability, certain 2011 amounts have been reclassified to conform to the 2012 presentation.
 
Our organization and business, the accounting policies we follow and other information, are contained in the notes to our consolidated financial statements filed as part of our 2011 Form 10-K. This quarterly report should be read in conjunction with such 10-K.
 
The consolidated financial statements include the accounts of Hallador Energy Company (the Company) and its wholly-owned subsidiary Sunrise Coal, LLC (Sunrise).  All significant intercompany accounts and transactions have been eliminated.  We are engaged in the production of thermal coal from an underground mine located in western Indiana.  We own a 45% equity interest in Savoy Energy L.P., a private oil and gas company which has operations in Michigan and a 50% interest in Sunrise Energy, LLC, a private entity engaged in natural gas operations in the same vicinity as our coal mine.
 
(2)  Notes Payable

In December 2008, we entered into a new loan agreement with a bank consortium that provides for a $40 million term loan and a $30 million revolving credit facility.  At June 30, 2012, we owed $12.5 million on the term loan and nil on the revolver.  The debt matures in December of 2012.  We pay a .5% commitment fee on the unused revolver.  Substantially all of Sunrise's assets are pledged under this loan agreement and we are the guarantor.  The loan agreement requires customary covenants, required financial ratios and restrictions on distributions.  Closing costs on this loan agreement were about $1.2 million and are being amortized using the effective interest method over its term which ends near the end of 2012. The current interest rate is LIBOR-one month (0.25%) plus 2.50% or 2.75%.
 
We expect to negotiate a new loan agreement with our banks sometime before the end of the year.


 
6

 

 
(3)  Investment in Savoy

We own a 45% interest in Savoy Energy L.P., a private company engaged in the oil and gas business primarily in the State of Michigan. Savoy uses the successful efforts method of accounting.  We account for our interest using the equity method of accounting.

Below (in thousands) to the 100% are a condensed balance sheet at June 30, 2012 and a condensed statement of operations for the six months ended June 30, 2012 and 2011.

Condensed Balance Sheet
 

       
   
2012
 
       
Current assets
  $ 18,486  
Oil and gas properties, net
    20,692  
    $ 39,178  
         
Total liabilities
  $ 10,178  
Partners' capital
    29,000  
    $ 39,178  


Condensed Statement of Operations


             
   
2012
   
2011
 
             
Revenue
  $ 17,261     $ 15,325  
Expenses
    (11,719 )     (8,426 )
Net  income
  $ 5,542     $ 6,899  
                 


 
7

 



(4)  Investment in Sunrise Energy

In late December 2010, we invested $2.375 million for a 50% interest in Sunrise Energy, LLC which then purchased existing gas reserves and gathering equipment from an unrelated third party with plans to develop and operate such reserves. During January 2012 we invested an additional $506 thousand. Sunrise Energy also plans to develop and explore for coal-bed methane gas reserves on or near our underground coal reserves. They use the successful efforts method of accounting. We account for our interest using the equity method of accounting.

Below (in thousands) to the 100% are a condensed balance sheet at June 30, 2012 and a condensed statement of operations for the six months ended June 30, 2012 and 2011.

Condensed Balance Sheet

       
   
2012
 
       
Current assets
  $ 2,368  
Oil and gas properties, net
    6,211  
    $ 8,579  
         
Total liabilities
  $ 922  
Partners' capital
    7,657  
    $ 8,579  


Condensed Statement of Operations


             
   
2012
   
2011
 
             
Revenue
  $ 1,086     $ 2,217  
Expenses
    (1,023 )     (1,128 )
Net  income
  $ 63     $ 1,089  
                 

 
8

 

(5)  Other Assets and Other Income (in thousands)


   
June 30,
 2012
   
December 31,
2011
 
Other assets:
           
    Oil and gas properties, net
  $ 334     $ 336  
    Advance coal royalties
    3,129       3,205  
    Deferred financing costs, net
    134       295  
    Marketable equity securities available for sale at fair value (restricted)*
    3,581       2,326  
    Miscellaneous
    1,771       132  
    $ 8,949     $ 6,294  
-------------------------------------
*Held by Sunrise Indemnity, Inc., our wholly-owned captive insurance company.

 
   
Six months ended
June 30,
   
2012
   
2011
 
Other income:
           
   MSHA reimbursements
  $ 4,236     $ 1,900  
   Exploration and dry hole costs
    (53 )     (628 )
   Oil and gas sales, net of expenses
    176       108  
   Other
    135       377  
    $ 4,494     $ 1,757  
                 


See “MSHA Reimbursements” below for a discussion of the $4.2 and $1.9 million.

(6)  Self Insurance

We continue to self-insure on about $100 million (historical cost) of our underground mining equipment.  We feel comfortable with this decision as such equipment is allocated among four mining units spread over fifteen miles.
 
(7)  Bill and Hold
 

Two of our customers advised us that their coal stockpiles are increasing and asked us to consider storing their coal on our property. In April 2012 we entered into a storage agreement with one customer to store 250,000 tons for a minimum of one year and up to a maximum of two years. In June 2012 we entered into a similar storage agreement with the second customer. We will continue to sell the coal as contracted to these customers.  The risks and rewards of ownership will pass from us to them as coal is placed into segregated storage. We will be paid a nominal storage fee in addition to our contracted price at the time the coal is placed in storage. As of June 30, 2012 we have stored 73,000 tons for the first customer and nil for the second. We have recognized about $3 million in revenue from this “bill and hold” arrangement.  There were no change in payment terms with our customers and as of July 31, 2012 all receivables outstanding at June 30 have been paid.

 
 
9

 
(8)  Subsequent Event
 
On July 31, 2012 our Board of Directors declared our second special cash dividend of $0.50 per share payable August 17, 2012.  The dividend will also apply to our outstanding restricted stock units and options.  The cash payment will be about $14.6 million.
 

 
Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion updates the MD&A section of our 2011 Form 10-K and should be read in conjunction therewith.
 
 
The consolidated financial statements above should be read in conjunction with this discussion. 

 
Overview

The largest portion of our business is devoted to underground coal mining in the state of Indiana through Sunrise Coal, LLC (a wholly-owned subsidiary) serving the electric power generation industry.  We also own a 45% equity interest in Savoy Energy L.P., a private oil and gas company with operations in Michigan.  In late December 2010 we invested $2.4 million for a 50% interest in Sunrise Energy, LLC which then purchased existing gas reserves and gathering equipment from an unrelated third party with plans to develop and operate such reserves.  During January 2012 we made an additional investment of $506 thousand. Sunrise Energy also plans to develop and explore for coal-bed methane gas reserves on or near our underground coal reserves.  Development is pending an increase in nat gas prices. The primary reason we consummated this purchase was to protect our coal reserves from unwanted fracking by unrelated third parties. We account for our investments in Savoy and Sunrise Energy using the equity method.  Historically, through our Denver operations, we also lease oil and gas mineral rights with the intent to sell the prospects to third parties and retain an overriding royalty interest (ORRI) or carried interest.  In mid July 2012 we decided to substantially curtail these activities and our geologist who developed these prospects now works for us on a part-time basis.  Occasionally, we participate in the drilling of oil and gas wells.  Further below is a discussion of Savoy’s operations.
 
The table below illustrates the status of our current coal contracts:
 
Year
 
Contracted Tons
 
Average Price
 
           
2012
 
3,083,000
 
$42.53
 
2013
 
2,900,000
 
  40.01
 
2014
 
1,100,000
 
  46.64
 

 
In the short-run, the market for thermal coal in the United States faces a number of challenges. Unusually mild winter weather has reduced electricity generation from both coal and gas burn, resulting in a rapid build in coal inventories. The mild weather, burgeoning inventories and prolific production of nat gas has recently driven the price of nat gas to decade lows, which has increased fuel switching in favor of gas and forced the price of thermal coals lower across all production basins. Regulatory uncertainties, particularly surrounding the recently delayed Cross-state Air Pollution Rule (CSAPR), and Maximum Achievable Control Technology (MACT), are causing utilities to defer coal purchasing decisions, and in some cases to retire coal-fired generating facilities.
 
 
10

 
 
Two of our customers advised us that their coal stockpiles are increasing and asked us to consider storing their coal on our property. In April 2012 we entered into a storage agreement with one customer to store 250,000 tons for a minimum of one year and up to a maximum of two years. In June 2012 we entered into a similar storage agreement with the second customer. We will continue to sell the coal as contracted to these customers.  The risks and rewards of ownership will pass from us to them as coal is placed into segregated storage. We will be paid a nominal storage fee in addition to our contracted price at the time the coal is placed in storage. As of June 30, 2012 we have stored 73,000 tons for the first customer and nil for the second. We have recognized about $3 million in revenue from this “bill and hold” arrangement.  There were no change in payment terms with our customers and as of July 31, 2012 all receivables outstanding at June 30 have been paid.

For the first half of 2012, we are behind about 42,000 tons on shipments to customers.  We expect the shortfall (about $2.3 million) to be made up during the last half of 2012.  The dollar amount of the shortfall is high due to over shipping on low-priced contracts and under shipping on high-priced contracts.

Project Update

New Reserve (unassigned) – Allerton/Bulldog

The paragraph below comes primarily from our 2011 Form 10-K.  We have no additional substantive comments regarding the Allerton reserve at this time.

We have leased roughly 19,500 acres in Vermillion County, Illinois near the village of Allerton. Based on our reserve estimates we currently control 32.3 million tons of recoverable coal reserves; 16.3 million which are proven and 16 million which are probable. A considerable amount of our 19,500 acres of leases has yet to receive any exploratory drilling, thus we anticipate our controlled reserves to grow as we continue drilling in 2012. The permitting process was started in the summer of 2011 and we filed the formal permit with the state of Illinois and the appropriate Federal regulators during June 2012. We are calling the new reserve the Bulldog mine. If the process proceeds smoothly, we could receive a mining permit as early as the first half of 2013.  Unassigned reserves represent coal reserves that would require new mineshafts, mining equipment and plant facilities before operations could begin on the property. The primary reason for this distinction is to inform investors which coal reserves will require substantial capital expenditures before production can begin. Sunrise personnel have opened coal mines in this area in the past.
 
Full-scale mine development will not commence until there is proven market demand.

MSHA Reimbursements

Two of our contracts allow us to pass on certain costs incurred resulting from changes in costs to comply with mandates issued by MSHA or other government agencies.  In late December 2010, we submitted an analysis of such costs which was reviewed by an outside consulting firm engaged by our customers.  In January 2011 the two customers agreed to reimburse us about $1.9 million for costs incurred by us during 2008 and 2009.  During those years we were not able to accurately estimate what the ultimate outcome of these reimbursable costs would be so we did not record them until we were certain of the amounts and certain of collection.  Such amounts were recorded during the first quarter of 2011.

We submitted our incurred costs for 2010 in September of 2011 for $4.2 million.  One of the customers agreed with our analysis and paid $2.3 million in February 2012 and the other agreed with our analysis during the second quarter. Accordingly, $2.3 million was recorded in the first quarter and the other $1.9 million was recorded in the second quarter of 2012.  We expect to submit our costs for 2011 sometime before the end of the year.

 
11

 
45% Ownership in Savoy

Savoy operates almost exclusively in Michigan.  They have an interest in the Trenton-Black River Play in southern Michigan.  They hold 200,000 gross acres (about 100,000 net) in Hillsdale and Lenawee counties.   Drilling locations in this play are identified based on the evaluation of extensive 3-D seismic shoots. Savoy operates their own wells and their working interest averages between 40 and 50% and their net revenue interest averages between 34 and 42%. Savoy’s net daily oil production currently averages about 720 barrels of oil. Oil and liquids make up about 99% of their oil and gas revenue.

The first half of 2012 may not be indicative for all of 2012 due to (i) the uncertainty of the outcome of Savoy’s drilling activity; (ii) the extent of their seismic activity (G&G costs) and (iii) the sustainability of these high oil prices.  Current oil prices are in excess of $76/barrel. Savoy does not have any oil price hedges in place.

The table below illustrates the revenue growth in Savoy (to the 100%) comparing the first half of 2012 to 2011 (financial statement data in thousands):

             
   
2012
   
2011
 
Revenue:
           
   Oil
  $ 14,010     $ 12,277  
   NGLs (natural gas liquids)
    488       254  
   Nat gas
    173       291  
   Contract drilling
    2,296       2,277  
   Other
    294       226  
     Total revenue
    17,261       15,325  
Expenses:
               
   LOE (lease operating expenses)
    2,213       1,799  
   Contract drilling costs
    1,588       1,468  
   DD&A (depreciation, depletion & amortization)
    1,957       1,679  
   G&G (geological and geophysical) costs
    1,512       490  
   Dry hole costs
    1,959       906  
   Impairment of unproved properties
    1,824       1,410  
   Other exploration costs
    125       188  
   G&A (general & administrative)
    541       486  
      Total expenses
    11,719       8,426  
Net income
  $ 5,542     $ 6,899  
                 
The information below is not in thousands:
               
                 
Oil production - barrels
    147,810       131,500  
NGLs production – barrels
    9,570       4,425  
Nat gas production - Mcf
    63,610       65,600  
Average oil prices/barrel for the period
  $ 94.78     $ 93.36  
Average NGL prices/barrel for the period
  $ 51.04     $ 57.37  
Average gas prices/Mcf for the period
  $ 2.72     $ 4.43  

 
12

 
 
Liquidity and Capital Resources

For the first half of 2012, we generated about $13.7 million in cash from operations.  This amount was less than the 2011 period due primarily to the reduction in coal sales, payment of income taxes, increases in accounts receivable and increases in our coal inventory.  We do not anticipate any liquidity issues in the foreseeable future. We plan to fund future mine expansion at the Carlisle mine through a combination of draws from our revolver and cash from operations.  Our capital expenditures budget for the remainder of 2012 is in the $8-9 million range. Eventually, when we develop a new reserve, we intend to incur additional debt and restructure our existing credit facility.

We have no material off-balance sheet arrangements.

Second Special Dividend

On July 31, 2012 our Board of Directors declared our second special cash dividend of $0.50 per share payable August 17, 2012.  The dividend will also apply to our outstanding restricted stock units and options.  The cash payment will be about $14.6 million.
 
Results of Operations 

First Half 2012 vs. 2011
 
For the first half of 2012, we sold 1,444,000 tons at an average price of $43/ton.  For the first half of 2011, we sold 1,581,000 tons at an average price of $41.81/ton. The lower average price for the first half 2011 is due to the mix of our various contracts. We expect our coal sales for the remainder of 2012 to be in the 1.45 million ton range with an average price of $43/ton.

Operating costs and expenses averaged $25.79/ton in 2012 compared to $23.15 in 2011.  The increase was due primarily to poor mining conditions in the month of March.  These poor conditions persisted into part of April, but conditions have since improved.  We are also operating the mine on reduced hours due to customer demand, which has a negative effect on productivity which translates to higher costs.   Our Indiana employees totaled 324 at June 30, 2012 compared to 311 at June 30, 2011.  We expect such costs to average $25-27/ton for the remainder of 2012.

On April 1, 2012 we granted raises to our hourly mine employees and to other key employees and also issued 143,000 RSUs to certain key employees which will not vest until April 1, 2015.  These two actions will increase our costs by about $565,000 for the remainder of 2012.

The increase in coal exploration costs relates to the new Bulldog mine near Allerton, Illinois.

Savoy’s activity is discussed above.  The reduction in the equity earnings is due primarily to higher dry hole costs and higher G&G costs.

 
13

 
Three Months Ended June 30, 2012 vs. 2011
 
For the second quarter of 2012, we sold 743,000 tons of coal at an average price of $43.72/ton.  For the comparable 2011 period, we sold 765,000 tons at an average price of $42/ton.
 
Cost of coal sales averaged $25.32/ton for the second quarter of 2012 compared to $23.40 in 2011.  As stated for the year to date results, the increase was due primarily to adverse mining conditions.  
 
The increase in DD&A was due primarily to additions to our coal properties. Coal properties at June 30, 2012 were $208 million compared to $187 million at June 30, 2011.
 
Income taxes

Our 2012 effective tax rate was about 33% and we expect such rate to be in the 33-35% range for the remainder of the year.  We estimate that about 60% of such rate will be for taxes currently due.

New Accounting Pronouncements

None of the recent FASB pronouncements will have any material effect on us.
 
Political contributions

During the first half of 2012 we donated $75,000 to the NMA (National Mining Association) Coal Values program which is to help elect pro-coal mining candidates in 2012 and to promote the use of coal.  In April we made a $100,000 contribution to the Super PAC, Restore our Future.

In the upcoming elections, we encourage all of our shareholders and employees to support those candidates who unequivocally promote legislation and regulations that are favorable to the coal industry.
 
2013 Annual Meeting
 
Our annual shareholders’ meeting is scheduled for Thursday afternoon April 18, 2013 in New York City at a yet to be determined location in upper Manhattan.
 
Yorktown Distribution
 
As previously disclosed, each time after we filed our 2011 Form 10-Qs for the first, second and third quarters and for the 2011 annual report on Form 10-K, we were advised by Yorktown Energy Partners VI, L.P., an investor for the last six years, that it had distributed 750,000 shares (3,000,000 in total) of Hallador common stock to its limited and general partners. After the four distributions, Yorktown and its affiliates collectively hold about 12.6 million shares of Hallador common stock representing about 44% of total shares outstanding.  

Yorktown did not make a distribution after we filed the first quarter Form 10-Q for 2012.

While we do not know Yorktown’s ultimate strategy to realize the value of their Hallador investment for their partners, we expect that over time distributions such as these will improve our liquidity and float.  If and when we are advised of another Yorktown distribution after this Form 10-Q is filed, we will timely report such on a Form 8-K.
 
XBRL
 
This is the first time that we have released our financials via a Form 8-K filing.  In the past the filing of our Form 10-Q  served that purpose.  Because of the extra time it takes to convert the numbers to XBRL we did not want to delay the release of our numbers while we spend unproductive time and investors money on the minutia of XBRL.  While XBRL might serve a purpose for larger companies we see it as a waste of time and resources for  companies our size.  Assuming no delays in converting to XBRL we plan to file the Form 10-Q on Friday August 3, 2012.
 
 
SIGNATURE
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
August 1, 2012
HALLADOR ENERGY COMPANY
 
 
By:/s/W. ANDERSON BISHOP
      W. Anderson Bishop, CFO
 
 
 
14