Hallador Secures Up to $675 Million Debt Financing for Turtle Creek Gas
New term loan and revolver capacity are expected to cover most of Turtle Creek’s sub-$800 million cost, backed by $2.4 billion in contracted sales.
Rhea-AI Summary
Hallador Energy (HNRG) closed a new debt financing package of up to $675 million on September 15, 2026, to fund its proposed Turtle Creek Gas project.
The package includes a $600 million senior secured term loan facility with a three-year term and a potential two-year extension, of which about $550 million was funded at closing and $50 million is available as a delayed draw for up to 12 months. Hallador can also establish a super-priority revolving credit facility of up to $75 million with a similar tenor. The company expects to use the Facilities mainly for turbine purchase payments, transport and refurbishment, development costs, and construction of the 460-megawatt natural gas-fired Turtle Creek plant, whose total cost is expected to be under $800 million. About $120 million will repay an existing $45 million term loan and $75 million revolver, with remaining proceeds for corporate purposes. As of June 30, 2026, Hallador had approximately $2.4 billion of contracted forward sales that management believes support a path to fully fund Turtle Creek with little to no equity dilution.
Positive
- Debt package up to $675 million combines $600 million term loan and potential $75 million super-priority revolver to fund Turtle Creek.
- Immediate funding of about $550 million at term loan closing, plus $50 million delayed draw available for up to 12 months.
- Addresses majority of sub-$800 million project cost for the 460 MW Turtle Creek natural gas plant, according to the company.
- $120 million of proceeds earmarked to repay a $45 million term loan and $75 million revolver, simplifying existing debt.
- $2.4 billion contracted forward sales as of June 30, 2026, under multi-year agreements, providing cash flow visibility to support project funding.
Negative
- Higher cost of capital acknowledged versus traditional bank project financing, with expectation of later refinancing after commercial operation.
- Certain development milestones delayed, although the company states project economics and targeted commercial operation date are unchanged.
- No long-term power purchase agreement expected as a condition to the final investment decision, increasing merchant and contracting risk.
- Execution risks remain around turbine loading, export, refurbishment schedule, and securing output contracts at prices that justify project cost.
News Explained
The September 15 debt closing advances funding, but Turtle Creek remains pre-FID; a long-term power purchase agreement is not expected to be required.
The
Hallador does not expect a long-term power purchase agreement to be a condition to FID, although discussions with prospective counterparties for the plant’s output are ongoing.
As of
The stated near-term checkpoints are execution of the generator interconnection agreement in coming weeks, finalization of the engineering and construction agreement, and turbine transport and refurbishment in coming months; the company says some development milestones have taken longer than initially anticipated.
Sources and calculations
- Hallador Secures Up to $675 Million Debt Financing for Turtle Creek Gas (2026-09-17)
- Hallador Energy second-quarter 2026 fundamentals (2026-06-30)
- Available liquidity against the last reported quarterly operating outflow, in days at that rate $28,979,000 / ($23,890,000 / 91) = 110.4 days
Key Figures
- Term Loan Facility
- $600 million
- Three-year senior secured facility closed September 15, 2026
- Funded at Closing
- $550 million
- Term Loan Facility
- Delayed Draw Commitment
- $50 million
- Available for 12 months
- Revolving Credit Facility
- $75 million
- Super-priority facility with similar tenor
- Total Financing Package
- $675 million
- Term loan and potential revolving credit facility
- Project Cost
- Less than $800 million
- Expected total Turtle Creek Gas project cost
- Debt Repayment
- $120 million
- Repays existing $45 million term loan and $75 million revolver
- Contracted Forward Sales
- $2.4 billion
- As of June 30, 2026
Historical Context
-
Turtle Creek budget reduced below $800 million despite weaker quarterly results
-
Acquisition advanced the 460 MW natural gas project with $450 million delivered cost
-
Twelve-year capacity agreement expanded contracted revenue supporting future project financing
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Key Terms
senior secured term loan financial
delayed draw term loan financial
super-priority revolving credit facility financial
generator interconnection agreement technical
final investment decision financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
Facilities Expected to Fund the Majority of Turtle Creek’s Sub-
Company’s
TERRE HAUTE, Ind., Sept. 17, 2026 (GLOBE NEWSWIRE) -- Hallador Energy Company (Nasdaq: HNRG) (“Hallador” or the “Company”) today announced that on September 15, 2026, the Company closed a
Hallador expects to use borrowings from the Facilities primarily to fund upcoming payment obligations under its turbine asset purchase agreement, transportation and refurbishment costs, pre-notice-to-proceed and other development costs, and construction 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
The Company believes the Facilities represent the largest component of its overall financing plan for Turtle Creek and address the majority of Turtle Creek’s expected capital requirements. The Company is actively evaluating and expects to pursue additional financing sources to strengthen its capital structure. Together with the operating cash flow Hallador expects to generate between now and commercial operation of Turtle Creek, supported by the Company’s contracted forward sales position, management believes the Company has a credible pathway and sufficient time to fully fund the project consistent with its objective of little to no equity dilution.
“Closing this loan is the largest single step in financing Turtle Creek,” said Brent Bilsland, Chairman and Chief Executive Officer. “We 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. As Turtle Creek approaches and enters commercial operation, we expect to be able to refinance the loan on terms that reflect an operating plant.”
Bilsland continued, “Turtle Creek would continue Hallador’s transformation into a multi-fuel independent power producer and expand the scale of our power generation business. By leveraging existing infrastructure and critical generation equipment we have under contract, we believe we have positioned Turtle Creek to reach commercial operation on an accelerated timeline and at a capital cost well below comparable new generation projects. With demand for reliable, dispatchable power continuing to grow in MISO, we believe the combination of speed to market and capital efficiency makes Turtle Creek a compelling opportunity for Hallador and its shareholders. What the team remains focused on executing is straightforward but not assured: the 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.”
Kennedy Lewis Investment Management LLC provided the Term Loan Facility.
PEI Global Partners acted as the exclusive financial advisor to Hallador in connection with this transaction.
Turtle Creek Project Update
Development of Turtle Creek continues to progress. While certain development milestones have taken longer than initially anticipated, none has changed the Company’s view of the project’s economics or its targeted commercial operation date. Turbine shipment activities remain on schedule, and the Company expects to complete the purchase of the equipment in accordance with the terms of the previously filed turbine asset purchase agreement. The equipment is then expected to be transported to Siemens’ U.S. facilities for refurbishment in the coming months.
Hallador’s remaining development milestones continue to advance. The Company expects to execute the Generator Interconnection Agreement (“GIA”) in the coming weeks. Negotiations on the project’s engineering and construction agreement are in their final stages..
Hallador does not expect a long-term power purchase agreement to be a condition to its final investment decision (“FID”). As of June 30, 2026, the Company had approximately
Turtle Creek, like the Company’s Merom Generating Station, is located in the MISO market. The Company believes current MISO market pricing for capacity and energy is supportive of new dispatchable generation, and its decision to advance Turtle Creek toward FID reflects that view.
Forward-Looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Statements that are not strictly historical statements constitute forward-looking statements and may often, but not always, be identified by the use of such words as “expects,” “believes,” “intends,” “anticipates,” “plans,” “estimates,” “guidance,” “target,” “potential,” “possible,” or “probable” or statements that certain actions, events or results “may,” “will,” “should,” or “could” be taken, occur or be achieved. Forward-looking statements include, without limitation, those relating to the availability of the delayed draw term loan commitment, the exercise of the extension option, the establishment of the revolving credit facility, the expected use of proceeds from the Facilities, the timing and outcome of any final investment decision on Turtle Creek, the development, construction, financing and commercial operation of Turtle Creek, the Company’s evaluation and pursuit of additional financing sources, the timing of the Company’s remaining capital requirements, the timing, terms and availability of any additional financing and the Company’s discussions with financing partners, the Company’s ability to achieve its objective of little to no equity dilution, the Company’s contracted forward sales position and the performance of counterparties thereunder, the Company’s ability to contract Turtle Creek’s capacity and energy on acceptable terms and the timing of FID relative to any such contracts, the Company’s ability to refinance the Term Loan Facility following commercial operation and the terms of any such refinancing, the repayment of existing indebtedness, the timing of turbine shipment, completion of the equipment purchase and refurbishment, MISO market conditions and demand for Turtle Creek’s capacity and energy, the execution of a Generator Interconnection Agreement with MISO, engineering and construction agreements, and agreements for the sale of capacity and energy, expected total project costs and capital requirements, expected operating cash flow, and the Company’s objective of limiting equity dilution. Forward-looking statements are based on current expectations and assumptions and analyses made by Hallador and its management in light of experience and perception of historical trends, current conditions and expected future developments, as well as other factors appropriate under the circumstances that involve various risks and uncertainties that could cause actual results to differ materially from those reflected in the statements. These risks include, but are not limited to, those set forth in Hallador’s annual report on Form 10-K for the year ended December 31, 2025, and other Securities and Exchange Commission filings. Hallador undertakes no obligation to revise or update publicly any forward-looking statements except as required by law.
About Hallador Energy Company
Hallador Energy Company (Nasdaq: HNRG) is a vertically integrated Independent Power Producer (IPP) based in Terre Haute, Indiana. The 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. To learn more about Hallador, visit the Company’s website at http://www.halladorenergy.com.
Company Contact
Todd E. Telesz
Chief Financial Officer
TTelesz@halladorenergy.com
Investor Relations Contact
Sean Mansouri, CFA
Elevate IR
(720) 330-2829
HNRG@elevate-ir.com
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How is the new $600 million term loan facility structured?
The term loan facility has a three-year term with an option, subject to lender approval, to extend for two additional years. Approximately $550 million was funded at closing, and an extra $50 million is available as a delayed draw term loan commitment for up to 12 months.
What is the purpose of the potential $75 million super-priority revolving credit facility?
Hallador has the ability to establish a super-priority revolving credit facility of up to $75 million with a similar tenor to the term loan. Together with the term loan, this creates total Facilities of up to $675 million to fund turbine purchase payments, transportation and refurbishment costs, development expenses, construction of Turtle Creek, and general corporate purposes.
What is the current status of key Turtle Creek development milestones?
Development is progressing, although some milestones have taken longer than first anticipated. Turbine shipment activities remain on schedule, and the equipment purchase is expected to be completed in line with the turbine asset purchase agreement, then transported to Siemens’ U.S. facilities for refurbishment in the coming months. Hallador expects to execute the Generator Interconnection Agreement in the coming weeks, and negotiations on the engineering and construction agreement are in their final stages.
Who provided the term loan facility and who advised Hallador?
Kennedy Lewis Investment Management LLC provided the $600 million senior secured term loan facility. PEI Global Partners acted as Hallador’s exclusive financial advisor for this transaction.
How does Hallador plan to reach a final investment decision on Turtle Creek?
The company believes its approximately $2.4 billion of contracted forward sales as of June 30, 2026, provide the foundation to proceed to a final investment decision. Hallador does not expect a long-term power purchase agreement to be a condition to that decision and is in ongoing discussions with prospective counterparties for Turtle Creek’s output.