A small power company borrowed up to $675 million. Its own boss admits the rate is steep.

Hallador Energy runs a power plant and a coal mine in Indiana. Its Merom plant makes about one gigawatt of power. That is enough for hundreds of thousands of homes. [C7][C7] Press release, About Hallador EnergyThe Company has two core businesses: Hallador Power Company, LLC, which produces electricity and provides accredited capacity at its one-Gigawatt (GW) Merom Generating Station, and Sunrise Coal, LLC, which produces and supplies fuel to the Merom Generating Station and other companies.Hallador Energy Company press release on the Turtle Creek financing, filed as Exhibit 99.1 to Form 8-K, September 17, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/788965/000110465926108429/hnrg-20260915xex99d1.htm

Its other arm, Sunrise Coal, mines and sells the coal that keeps Merom running. [C7][C7] Press release, About Hallador EnergyThe Company has two core businesses: Hallador Power Company, LLC, which produces electricity and provides accredited capacity at its one-Gigawatt (GW) Merom Generating Station, and Sunrise Coal, LLC, which produces and supplies fuel to the Merom Generating Station and other companies.Hallador Energy Company press release on the Turtle Creek financing, filed as Exhibit 99.1 to Form 8-K, September 17, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/788965/000110465926108429/hnrg-20260915xex99d1.htm

About 47 million shares were out in August. [C8][C8] Form 10-Q, cover pageAs of August 6, 2026, we had 47,143,357 shares of common stock outstanding.Hallador Energy Company quarterly report on Form 10-Q for the period ended June 30, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/788965/000110465926093468/hnrg-20260630x10q.htm

Now Hallador wants to build something new. Turtle Creek is a planned gas plant. It should make 460 megawatts once it is running. [C9][C9] Press release, September 17, 2026construction of the Company’s proposed new and efficient 460-megawatt natural gas fired Turtle Creek Gas project (“Turtle Creek”), which has an expected total project cost of less than $800 million.Hallador Energy Company press release on the Turtle Creek financing, filed as Exhibit 99.1 to Form 8-K, September 17, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/788965/000110465926108429/hnrg-20260915xex99d1.htm

The whole project should cost under $800 million. [C9][C9] Press release, September 17, 2026construction of the Company’s proposed new and efficient 460-megawatt natural gas fired Turtle Creek Gas project (“Turtle Creek”), which has an expected total project cost of less than $800 million.Hallador Energy Company press release on the Turtle Creek financing, filed as Exhibit 99.1 to Form 8-K, September 17, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/788965/000110465926108429/hnrg-20260915xex99d1.htm

Hallador already has buyers lined up. As of mid-2026, it had about $2.4 billion of sales locked in. [C10][C10] Press release, Turtle Creek Project UpdateAs of June 30, 2026, the Company had approximately $2.4 billion of contracted forward sales under multi-year agreements with utilities and other counterparties.Hallador Energy Company press release on the Turtle Creek financing, filed as Exhibit 99.1 to Form 8-K, September 17, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/788965/000110465926108429/hnrg-20260915xex99d1.htm

The loan closed September 15, 2026, for $600 million. About $550 million landed right away. The rest, $50 million, can be drawn over the next year. [C11][C11] Form 8-K, Item 1.01The Credit Agreement provides for a $600 million senior secured term loan facility (the “Term Loan Facility”), with $550 million funded at closing and a $50 million delayed draw available for 12 months after closing, subject to an agreed draw schedule and funding conditions.Hallador Energy Company Form 8-K, filed September 17, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/788965/000110465926108429/hnrg-20260915x8k.htm

It can also set up a credit line worth up to $75 million more. Together, the whole package can reach $675 million. [C1][C1] Press release, September 17, 2026the Company also has the ability to establish a super-priority revolving credit facility of up to $75 million with a similar tenor, creating a financing package (collectively, the “Facilities”) of up to $675 million.Hallador Energy Company press release on the Turtle Creek financing, filed as Exhibit 99.1 to Form 8-K, September 17, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/788965/000110465926108429/hnrg-20260915xex99d1.htm

Part of the new cash, about $120 million, pays off older loans. [C12][C12] Press release, September 17, 2026Approximately $120 million of the proceeds from the Term Loan Facility will be used to repay the Company’s existing $45 million term loan and $75 million revolving credit facility.Hallador Energy Company press release on the Turtle Creek financing, filed as Exhibit 99.1 to Form 8-K, September 17, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/788965/000110465926108429/hnrg-20260915xex99d1.htm

The rest is for Turtle Creek: buying and fixing up turbines, building the plant, and covering fees. [C13][C13] Form 8-K, Item 1.01Closing date proceeds from the Facilities will be used to fund turbine purchases and refurbishment, gas plant expansion expenses, equipment acquisitions, project-cost reimbursements, transaction fees and expensesHallador Energy Company Form 8-K, filed September 17, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/788965/000110465926108429/hnrg-20260915x8k.htm

This debt is not cheap. Before the new plant is up and running, part of the interest is paid in cash. The rest just gets added to what Hallador owes, growing the debt instead of shrinking it. [C4][C4] Form 8-K, Item 1.01Before commercial operation of the applicable project (“COD”), borrowings under the Term Loan Facility bear interest at a rate of 3.5% per annum payable in cash, plus SOFR plus 4.50% per annum payable in kind (“PIK”).Hallador Energy Company Form 8-K, filed September 17, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/788965/000110465926108429/hnrg-20260915x8k.htm

Once the plant is running, the rate resets higher still. It ties to a floating benchmark plus 8 percentage points, all paid in cash from then on. [C14][C14] Form 8-K, Item 1.01After COD, borrowings bear interest at SOFR plus 8.00% per annum, payable in cash.Hallador Energy Company Form 8-K, filed September 17, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/788965/000110465926108429/hnrg-20260915x8k.htm

The lender also agreed to loosen the leash. It can carry debt worth up to 9 times its earnings at first. That eases only slightly, to 8 times, after that. [C5][C5] Form 8-K, Item 1.01commencing with the first full fiscal quarter after COD, a maximum consolidated leverage ratio of 9.00x for the first tested period and 8.00x for each period thereafter.Hallador Energy Company Form 8-K, filed September 17, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/788965/000110465926108429/hnrg-20260915x8k.htm

Hallador's CEO, Brent Bilsland, was direct about the trade-off. He said the company took on more debt than a typical bank loan would allow. The reason: it lets Hallador avoid selling new stock. [C2][C2] Press release, quote from CEO Brent BilslandWe chose this structure because it carries more debt than traditional bank project financing would typically allow. We are paying a higher rate for that capital, and we accept the trade.Hallador Energy Company press release on the Turtle Creek financing, filed as Exhibit 99.1 to Form 8-K, September 17, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/788965/000110465926108429/hnrg-20260915xex99d1.htm [C3][C3] Press release, September 17, 2026consistent with its objective of little to no equity dilution.Hallador Energy Company press release on the Turtle Creek financing, filed as Exhibit 99.1 to Form 8-K, September 17, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/788965/000110465926108429/hnrg-20260915xex99d1.htm

He also flagged what still has to go right. The turbines have to arrive, pass inspection and get fixed up on schedule. Hallador also has to sell the plant's power at prices that make the whole bet pay off. [C15][C15] Press release, quote from CEO Brent Bilslandthe turbines have to load, clear export, and be refurbished on schedule, and we have to contract the plant’s output at prices that justify the cost, as we have done at Merom.Hallador Energy Company press release on the Turtle Creek financing, filed as Exhibit 99.1 to Form 8-K, September 17, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/788965/000110465926108429/hnrg-20260915xex99d1.htm

The filing does not say exactly when Turtle Creek starts running. It only says the company expects a fast schedule. [C9][C9] Press release, September 17, 2026construction of the Company’s proposed new and efficient 460-megawatt natural gas fired Turtle Creek Gas project (“Turtle Creek”), which has an expected total project cost of less than $800 million.Hallador Energy Company press release on the Turtle Creek financing, filed as Exhibit 99.1 to Form 8-K, September 17, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/788965/000110465926108429/hnrg-20260915xex99d1.htm

Whether Hallador signs a long-term deal to sell all of Turtle Creek's power is not settled yet. Neither is the price. [C10][C10] Press release, Turtle Creek Project UpdateAs of June 30, 2026, the Company had approximately $2.4 billion of contracted forward sales under multi-year agreements with utilities and other counterparties.Hallador Energy Company press release on the Turtle Creek financing, filed as Exhibit 99.1 to Form 8-K, September 17, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/788965/000110465926108429/hnrg-20260915xex99d1.htm

Hallador says it is still looking for more financing to fully fund Turtle Creek. How much more, and on what terms, is not in this filing. [C16][C16] Press release, September 17, 2026The Company is actively evaluating and expects to pursue additional financing sources to strengthen its capital structure.Hallador Energy Company press release on the Turtle Creek financing, filed as Exhibit 99.1 to Form 8-K, September 17, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/788965/000110465926108429/hnrg-20260915xex99d1.htm