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spk01: Greetings. Welcome to Alliance Resource Partners LP fourth quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Brian Cantrell, Senior Vice President and Chief Financial Officer. Thank you. You may begin.
spk03: Thank you, Sherry, and welcome, everyone. Earlier this morning, Alliance Resource Partners released its fourth quarter and year-end 2021 financial and operating results, and we'll now discuss these results as well as our perspective on market conditions and outlook. Following our prepared remarks, we'll open the call to your questions. Before we begin, a reminder that some of our remarks today may include forward-looking statements subject to a variety of risks, uncertainties, and assumptions, that are contained in our filings from time to time with the Securities and Exchange Commission and are also reflected in this morning's press release. While these forward-looking statements are based on information currently available to us, if one or more of these risks or uncertainties materialize, or if our underlying assumptions prove incorrect, actual results may vary materially from those we projected or expected. In providing these remarks, the Partnership has no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, unless required by law to do so. Finally, we'll also be discussing certain non-GAAP financial measures. Definitions and reconciliations of the differences between these non-GAAP financial measures and the most directly comparable GAAP financial measures are contained at the end of ARLP's press release, which has been posted on our website and furnished to the SEC on Form 8K. With the required preliminaries out of the way, I'll begin with a review of our results for the quarter and year, and then turn the call over to Joe Kraft, our Chairman, President, and Chief Executive Officer, for his comments. As we outlined in our release this morning, Alliance reported strong increases to key operating and financial metrics for the 2021 quarter and year compared to the 2020 quarter and year. For the 2021 quarter, ARLP posted increased volumes across the board as coal sales and production volumes increased 12.7% and 17.4% respectively, and royalty sales volumes for oil and gas and coal increased 9.6% and 6.6% respectively, all as compared to the 2020 quarter. We also saw higher commodity prices during the 2021 quarter, the coal sales price per ton increasing 5.6%, Oil and gas prices jumping 93.1% per BOE, and coal royalty revenue climbing 11.9% per ton. Reflecting higher sales volumes and price realizations, ARLP's net income and EBITDA also rose during the 2021 quarter, increasing 48% and 7.3% respectively over the 2020 quarter. Similarly, full-year 2021 results were significantly higher compared to 2020. Coal sales and production volumes increased 4.1 million tons, up 14.4%, and 5.2 million tons, up 19.3%, respectively, during 2021, leading our year-over-year coal sales revenues higher by $154.7 million. Higher coal sales revenues, combined with a $32.1 million increase in oil and gas royalties revenue to drive ARLP's 2021 total revenues up by 18.2% to $1.57 billion. Excluding the impact of $157 million of non-cash impairment charges in 2020, for the 2021 year, net income increased $150.4 million to $178.2 million, and EBITDA rose 23.9% to $479.1 million. During 2021, Alliance generated $302.2 million of free cash flow, returned $52.2 million to unit holders through cash distributions, reduced total debt and financing leases by $161.5 million to lower our total leverage to 0.93 times, and increased our liquidity by $105.4 million. At this point, I'd like to take a closer look at several factors that impacted ARLP's results during the 2021 quarter. We experienced transportation delays during the quarter as rail and barge companies struggled to manage performance disruptions due to labor shortage and scheduling challenges related to COVID-19, resulting in 196,600 tons of coal in transit at the end of 2021. These delays reduced our coal revenues by $16.5 million, EBITDA by $8.9 million, and net income by $7.1 million during the 2021 quarter. We expect these tons will be delivered in the first quarter, benefiting our 2022 results. We also noted in our release earlier this morning that our coal mines experienced increased operating expenses during the last quarter. Cost per ton for the 2021 quarter were impacted by an $11.8 million buyout of a coal contract that enabled us to sell approximately 132,300 tons at a higher price. While the cost to buy out this contract was fully expensed in the 2021 quarter, over half those tons will be shipped during the first quarter of 2022 at higher margins as the increased pricing we obtained is realized. Increased operating costs also reflect an increased sales and production mix of higher cost metallurgical export tons. In addition, At the end of each year, we perform actuarial and other reviews to adjust accrual for various liabilities, such as workers' compensation. For the 2021 quarter, these reviews resulted in a $6.8 million unfavorable cash accrual adjustment. In comparison, we saw $3.6 million of favorable non-cash actuarial and accrual adjustments in the 2020 quarter. Not surprisingly, in this economic environment, portion of our increased operating expenses also reflected inflationary pressures that are being felt by most businesses especially with respect to wages higher materials and supply costs particularly for steel related items such as roof bolts and wire mesh and petroleum related supplies like lubricants and diesel fuel as well as higher freight costs passed through from vendors in response to continuing supply chain concerns Where possible, we made advanced purchases of critical materials to both mitigate potential future cost increases and to ensure that our mines have adequate supplies on hand. As reflected in our initial 2022 guidance, we currently anticipate inflationary pressures are likely to persist in the near term, resulting in segment-adjusted EBITDA expense per ton increasing by approximately 10 to 16% over 2021 full-year levels. With that, I'll turn the call over to Joe for his comments on the markets and his outlook for ARLP. Joe?
spk05: Excuse me. Thank you, Brian, and good morning, everyone. During our last earnings call, we outlined several reasons why fossil fuel prices, and by that I mean oil, natural gas, and coal, have risen dramatically around the world, primarily because supply fell woefully short of growing demand as economies around the world continue to adjust from the COVID-19 disruptions that began in early 2020. The energy crisis persists today as the pandemic remains disruptive to supply chains, and just as importantly, due to continued pressures from governments, regulators, financial institutions, ESG activists and even customers unwilling to make commitments, all of which are contributing factors restricting growth in fossil fuel production and investment. These conditions remained intact both in the domestic and international coal markets through the end of 2021, resulting in natural gas prices rising to levels beneficial for coal demand. In our primary U.S. markets, year-over-year coal generation increased climbed nearly 21% during 2021 and would have been even higher if utilities had not been concerned about preserving critically low coal stockpiles. With many utilities reporting 20 days or less coal inventory and experiencing the supply shortages I mentioned previously, power companies chose to turn to higher cost natural gas generation. Similarly, our international coal markets continued to benefit from increased power demand, high natural gas and LNG prices, limited coal supply response, and transportation disruptions. Reflecting positive international supply demand fundamentals and attractive pricing, ARLP shipped approximately 4 million tons to the export markets in 2021, more than tripling our international coal sales volumes over 2020 levels. Absent any significant global economic downturn and destruction of power demand, we expect these favorable market conditions to continue for the near term. The combination of labor shortages and the surge of the Omicron variant affecting industry-wide coal transportation and production on the supply side, along with the favorable natural gas prices, frigid January weather, and the need for domestic utilities to restock low inventories, On the demand side, a point to the shortfall in coal supply continuing into 2022, keeping coal prices at elevated levels. Export demand is just as robust as the world LNG market prices remain steep, and Russia's intentions toward Ukraine has caused uncertainty of natural gas supply into Europe. AEROP's initial guidance for 2022 reflects this favorable outlook. With 32.1 million tons of coal already priced and committed for this year, we are anticipating 2022 sales volumes from our coal operations to increase 9 to 14% at per ton price realizations, 14 to 19% higher compared to 2021 levels. Although, as Brian mentioned, we also anticipate higher per ton operating expenses this year, We're still buoyed by increased cold prices, which we now believe will expect that AROP's segment-adjusted EBITDA margin per ton sold in 2022 should increase by approximately 25% compared to 2021. Our royalty segments delivered record financial results in 2021, and we expect favorable market fundamentals will support further growth in our royalty segments in 2022. For our oil and gas royalty segment, we believe total BOE sales volumes will increase modestly and a favorable forward price curve for oil, natural gas, and NGLs will most likely support higher price realizations in 2022. Anticipated increases in coal sales volumes and prices from ARLP's mining operations should also benefit our coal royalty segment, with royalty tons sold expected to increase approximately 7.5% and revenue per royalty ton 6% to 10% higher compared to 2021. As indicated by our guidance this morning and with market fundamentals remaining extremely favorable for 2022 and beyond, ARLP is well positioned to deliver solid growth and attractive cash returns to our unit holders. We remain committed to targeting annualized unit holder distributions this year of approximately 30% of free cash flow before growth investments, and are pleased that our board's elected to support that commitment by increasing ARLP's cash distribution to unit holders by 25% over the sequential quarter. I'm proud of the efforts of the entire Alliance organization to deliver the exceptional results we enjoyed in 2021. Facing ongoing challenges from COVID, supply chain shortages and disruptions, our employees worked tirelessly to meet the needs of our customers during this critical time and allowed ARLP to benefit from favorable market conditions. Through their dedication, ARLP is stronger than ever and well positioned for the future. That concludes our prepared comments and I will now ask the operator to open the call for questions.
spk01: Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Nathan Martin with the Benchmark Company. Please proceed.
spk07: Hey, good morning, Joe. Brian, thanks for taking my questions. Good morning, Nate.
spk05: Good morning.
spk07: Maybe I'll start on the sales side. It looks like midpoint of your full year, 22 shipment guidance is towards the high end of your prior, up 6%, 12% commentary. Can you guys give us your thoughts on the new range? Is the increase in demand mostly on the domestic side, export, maybe both? And where's the increased production going to come from? And kind of along that front, how is your current labor situation, both on the hiring front and any effects from COVID? I know you touched on that briefly in your prepared remarks.
spk05: Thanks. Sure, yeah, the demand is robust, both domestically and internationally. So our target for total sales this year, as you suggested, we would believe it will come in at the high end of the range that we've given, with the one main issue being COVID interruptions and the workforce that we plan to hire to add the unit that gets us to this higher production level. We have been successful in the latter half of 2021, hiring people to add two units. So that's allowed us to run at the run rate that you saw in the fourth quarter, which we believe is sustainable and would continue to grow as we hire people to meet that higher production level. Labor is tight, but we've been successful so far. We feel comfortable that we will be able to hire the people, but the range is really there primarily for whether we can or cannot hire those people. So if we could fully get to full staffing sooner than we anticipate, then we would definitely be at the high end of the range that we have here. It's not a demand issue. It's definitely our ability to find and attract the workers for the market opportunities we see.
spk03: Yeah, Nate, I would add, as we look at our sales ranges for this year, Joe mentioned that we've been managing tight labor situations. Impact from COVID as the Omicron variant has touched us as it has most other companies. The rails and barges have been struggling to manage it on their end as well. So it's a question of, as Joe indicated, can we hire the people and get the tons produced? And then can we actually move those tons to our customers as scheduled? We noted in this quarter we had about 197,000 tons that were in transit that had a meaningful impact on our results for the fourth quarter of last year. Hopefully that's just a timing issue. We expect to deliver all those tons this quarter, but we are very cognizant of the fact that transportation delays, you know, could hit us as we move through 2022 as well.
spk05: I think on that score, I mean, right now, we've got 2.3 million tons committed to the export market. And, you know, in 2021, we shipped 4 million tons. If the rails aren't responsive, then that will push us more to the export market, which is basically delivered off of our barge-loaded operations.
spk08: Great call there, guys. I appreciate it.
spk07: That was going to be my next question, Brian, Joe, about transportation. The only thing I would ask is, have you guys seen transportation improve at all sequentially, or do you have any thoughts on when you think or hope that that could normalize?
spk05: It's it's really dependent on customer and mine. So we have definitely seen some improvement at some of our mines and customers that have the capacity to be able to have rail cars, as an example. But it's still spotty. It's still not where we want it to be. It's still not as predictable as we wanted it to be. And that's evident by the number of times we had in transit at the end of the year.
spk03: Yeah, you know, everybody's working closely. We're in daily communication with the transport providers and our customers. You know, hopefully if the variant slows down the impact moving forward, things will get back on schedule.
spk08: But it remains a challenge today. Got it. Got it. Makes sense.
spk07: I guess maybe shift over to 2022 CapEx guidance. Spending looks like it's expected to be up around $100 million year over year. Can you guys give us an idea of what's behind that increase? Thanks.
spk03: Yeah, a lot of it's due to the volume expectations. You see the increases that we're forecasting in our initial guidance. I think last year, our five-year average per ton cost for maintenance capital was about $490 per ton. Our ops have worked very, very hard to be as efficient as possible and use everything at their disposal to keep our capex in check. In fact, I believe if you look toward the back of our release and one of our reconciliation tables, our per ton costs are actually dropping to about $441 per ton over the next five years. But increased volumes will definitely have an impact on the aggregate amount that we spend in 2022. Okay. Got it, Brian.
spk07: I was just wondering if there was any additional spending on equipment and things like that as you guys are bringing on multiple.
spk03: Yeah, you know, it gets into the timing of rebuild schedules, et cetera. But it's gratifying to see that our per ton costs are expected to come down, but increased volumes do result in higher capital costs.
spk05: There will be some growth capital for that increased production by adding a couple of units that you just spoke of.
spk00: Yes.
spk05: But that'll be in the growth capital and be taken from our excess cash flow for growing the company. But it's not a large amount.
spk07: Got it. Thanks, Joe. Thanks, Brian. And then just finally, I know I ask this question most every quarter, but can we just get your thoughts on what your priorities are from the capital allocation standpoint? Obviously, just raise your distribution by a nice 25%, again, consistent with your 35% of free cash flow before growth. Do you expect to maybe revisit that target at any point or maybe consider a variable target? Are there still investment opportunities out there you guys are considering, whether it be in coal or, you know, in the oil and gas royalty side of the house? Or do you plan on kind of focusing on paying down debt, giving access to capital? Just appreciate your thoughts there.
spk05: Thanks. As we mentioned, we have 30% of our free cash flow targeted for distributions. To your question, will we consider variable in the future? I think the answer is yes. Right now, we're focused on maintaining that distribution as we evaluate growth opportunities. We still remain committed to our mineral segment and we do plan to continue to invest in that segment. We're looking at several non-fossil opportunities. We don't have anything to report on that, but we do have several ideas in our site. I think the main issue that we continue to work on is what is the financial capacity or access to capital as we think about growing the company and, you know, As we invest in non-fossil fuel type investments, what kind of capital would be available to that relative to going forward when our current revolver expires? So we're having conversations with our lenders who love our credit, they love our management team, they love what we've been able to do, but they're feeling ESG pressures, so we're trying to work through a construct that will totally support our cooperations for decades, but at the same time allow us capital so we can put leverage on acquisitions. That's not totally defined, and so that's one reason we're cautious on what our distribution level is so that we do not miss an opportunity to grow this company as these opportunities present themselves. If we can't find those opportunities, we still have the ability to further pay down debt, but our primary focus Focus is on growing the company and that's what we're hoping to be able to find opportunities to where we can deploy that free cash flow for growth in the future.
spk08: Appreciate that color, Joe. Thank you guys for your time. Best of luck here going forward in 2022. Thank you, Nate.
spk01: As a reminder, this is Star 1 on your telephone keypad if you would like to ask a question. Our next question is from Scott Ferguson with Pacific Value. Please proceed.
spk08: Hi, Brian. Hi, Joe.
spk03: Good morning, Scott.
spk06: So I have two questions. One of them got predominantly answered on the balance sheet. So you talked about potential... investments this year. But looking out a year, where do you see the balance sheet? Do you guys have it where you want it as far as debt, cash, or where do you see us at 12 months?
spk03: Yeah, I mean, if you look back at what we've done to strengthen the balance sheet since COVID hit, we made significant progress during 2020 and again in 2021. You know, strong cash flow generation in the most recent year. If you look at our guidance, there will be strong cash flow generation this year. We're undrawn on our revolver. We're undrawn on our AR securitization. We are amortizing, continuing to amortize some equipment leases, and we have the bonds outstanding. As Joe mentioned, we are... in contact with our advisors and the capital markets to determine what our access to capital could be and how that might be priced. As you know, we're fortunate. We don't have any near-term maturities to deal with, but we definitely want to understand what our options and opportunities are when it is time to address those. Look, we're looking to grow the company. I mean, we have been an energy company today. and we're looking to be an energy company for the future. And want to return cash to our unit holders at an appropriate level, but our real focus is on growing the organization for the next several decades.
spk05: And I would just add, I think we're confident that we can, we do have access to the capital markets, and as Brian said, we're just trying to determine what is the proper level at a reasonable pricing point. And then the other main thing is what I said earlier. As we go into next year, hopefully we will have more opportunities to invest than possibly what we'll have this year. And I would expect those to have some form of ability to be financed that could bring more financing capacity to the table. So I feel really good about where we are in our balance sheet and the flexibility we have. to be able to manage all aspects of our strategic plan.
spk03: I do as well. And as you may recall, we've said in the past that we prefer operating at a one-time lever historically. We're below that today on a gross basis. And when you look at the cash that is on the balance sheet, even better than that on a net debt basis. So I agree with Joe. I'm Comfortable with where we are. Absolutely believe we'll have access to capital. It's just a question of how that might be structured and the cost around it. But very, very pleased with how we've been able to maintain the balance sheet. We're the highest rated coal company in the country. And if you look at our financial metrics, credit worthiness alone, we're investment grade. So I Second Joe's comments that we should have the access to the capital that we need to grow our business and maintain our core businesses today.
spk06: All right, thanks. As far as 23 forecast for tonnage, so say that's about 40%, 45%. How does that compare to prior years?
spk05: Well, pre-COVID, you know, we were right at 38-something million, I believe, something like that. And so if we can hire the people, we will be back at that run rate by the end of the year.
spk06: And so, yeah, as far as, yeah, like a year and a half out, So you've got about 40%, 45% already pre-sold. Is that pretty typical to the past?
spk03: It's been at that level for some time. As we've talked previously, utilities continue to take a relatively short-term view. We have been successful in closing some term business. But as Joe mentioned in his comments, many customers are continuing to look at this on a shorter-term basis, one-year type arrangements, et cetera. So where we are today, it probably is a little bit better than we have been in the very recent past. As you know, utilities, their stockpiles are very low. They need to replenish those at a minimum, and if net gas pricing stays where it is, you should continue to see some strong coal burn. So I'm confident that our marketing team will be able to secure the, you know, fully book out the contracts as we move forward.
spk06: All right. Thanks, guys.
spk08: Thank you, Scott.
spk01: Our next question is from Lucas Pipes with B Riley Securities. Please proceed.
spk09: Good morning, gentlemen. Great to hear your voice and good work on all these fronts. Thank you very much for taking my question. I first wanted to follow up a bit on the cost side, and maybe you addressed it in the prepared remarks, but would you be able to give a kind of rough breakdown of the drivers between mix, labor, material? Any additional color there would be very much appreciated. Thank you.
spk03: We should be able to have a similar mix, and I'm assuming you're talking about met and thermal.
spk09: Yeah, I was thinking of kind of higher cost versus lower cost operations. I assume maybe there's a change there, too.
spk03: Not as much. I mean, where we are increasing production, it is at our lower cost operations. Currently, our long walls are running very, very well. where we've had challenges in particular with the impact of the Omicron variant has been at our room and pillar operations. You may see some slight difference in the mix between met and thermal in 2022 over 2021, depending on the factors that we've talked about earlier. The real issues are on inflation, as I mentioned, generally around steel and petroleum related products. Our mines are also doing a really good job of making sure that we have sufficient materials and supplies on hand today. So if you look at how we are acquiring those materials to address those issues, In the fourth quarter, it was probably in the $1.2 to $1.5 million range, just making sure that we have sufficient stockpiles on hand. They do get consumed very quickly, but we are making advanced purchases. Productivity, which also impacts costs. We were impacted by Omicron in talking to our operational teams. It's really difficult to specifically quantify, but it probably hit productivity around 5% or so during the quarter. And given the needs of our customers, our men and women stepped up, you know, worked overtime, extra shifts, et cetera, all of which impact costs. So we know that inflation is here. It's a little bit difficult to specifically predict, you know, how and when it may impact us going forward. But as we planned out our business for 2022 and beyond, looking at specifically our individual vendors that are critical to us. We hope we've taken that all into account.
spk09: Very helpful. Thank you very much for that perspective. And I wanted to ask on the Metco side. First, the prices we are seeing on the screen are remarkable. And I wondered if you have a view on what has been driving those prices in particular, and then secondly, to what extent you might be able to take advantage of those, be it shifting tons from thermal to MET, et cetera. Thank you.
spk05: Yeah, so the general economy is obviously what drives income, you know, as well as the supply issue. Our international producers are facing the same things we're facing as far as COVID is concerned. Some of those countries have been a lot more stricter than others, which has impacted the supply on production. The global economy is stronger than the supply, and it's impacted somewhat by investments. A year ago, the financing community was very willing to support the metallurgical suppliers, but they too have even had some impact in the Asian countries back to ESG. We expect pricing to continue to be very strong and very constructive. We would expect that we have an opportunity to double our met sales. Well, not quite doubled, but increased by 50% of where we were in 2021. We are hopeful for that. It's not totally baked into our guidance, but because it's unpredictable, but I think the first quarter has been impacted by the Chinese and the Olympics, but I think that From our conversation in the marketplace, we expect the MET market to be very, very supportive over the next two quarters for sure at the prices that you're talking about being printed right now. It's very attractive. We would like to take advantage of it, but we only have the one MET mine in West Virginia. Some of our product out of our MC mining operation goes into the MET market. We're looking forward to participating in that marketplace.
spk09: Okay. Thank you very much for your perspective, and best of luck.
spk08: Thank you, Lucas.
spk01: Our next question is from Arthur Calvertinos from ANC Capital. Please proceed.
spk04: Okay, thank you. Hey, guys, just a couple of questions. With the Russian-Ukraine thing, and you mentioned it in a sentence in your opening remarks, so our administration has gone to all the Asian countries and said, we want some LNG, redirect it to Europe. And it got me really thinking about it. Have you guys been – or the industry – been approached by the administration to see if you can get more coal supplies to Europe? And the other thing is, as I was thinking about it, if you're one of these Asian countries all the way from Vietnam down to the Philippines – and you've got these LNG ships, and somebody's asking you, high-level ask, you know, for cargoes, and even if you kick them, you don't give them back to Europe, I'm thinking it must, like, you must question the supply of natural gas, and you must be thinking, I would think you'd think about a little better coal mix in the future, just because I know you know the business so well. I just want to get your thoughts on that.
spk05: To answer your first question, no, the The Department of Energy has not contacted us to increase our coal supply. Quite the contrary. They prefer that we not produce, which is sort of crazy. But LNG is short in supply. That's why the prices are so high. And the government's trying to do what they can do. Specifically, I think they're talking to Qatar to try to increase their supply. The problem, though, is there's no real capacity to even receive it. I think on the coal side, prices are very, just within the last two weeks, have grown dramatically into Europe. I would expect that if there is coal supply to provide, that there will be opportunity because Europe has to look at any and all sources going forward. They changed their energy policy. You would think that the NATO nations would. We're seeing France, for example, they had a limit on how many tons that they would allow to be, coal tons, that they would allow to be burned, and they've suspended that temporarily through February so that there could be more coal generation. But at the same time, the politics of carbon and climate and ESG You would think with this elevated world energy prices that there would be some reassessment of what the proper transition should be and that that would allow for more supply to balance the demand. So far, we're seeing that the governments be pretty stubbornly committed to their CO2 targets. As a result, I think we're going to have high prices for a while because they're just not stimulating any confidence to go out and make large investments to bring on supply. So just like our supply, we're doing it incrementally, but it's definitely still short of what the demand is. That's why I'm confident that we're more production-driven right now than we are market-driven because the market's there for us. All we've got to do is find the people so we can where I have to benefit from these higher prices.
spk04: All right, yeah, thank you. And it's funny, in the last two sentences, you're talking about the ESG and whatnot, and there was a story which they had in coverage where China's premier said the low-carbon ambitions must not interfere with normal life. So, again, he's not going to get any pushback, but it seems like it's starting to take – these prices are starting to take a bite. And let me – One other thing. I think on two last questions, two quarters or three quarters ago, I thought you guys were sort of close to doing something in an oil and gas royalty deal. I thought it was going to happen or something like that. I'm just wondering what's going on in that space because I think it was an oil that might have been $40 or something like that, and I'm sure everything's changed. Just what's going on in that environment in terms of M&A and transactions? That's it.
spk03: Yeah, you may be referring to an acquisition that we closed in the Permian in October.
spk04: But I thought there was another one. I thought you were close to another one. I don't know. For whatever reason. But I'm sorry. Go ahead.
spk03: That's okay. Not sure exactly what you're referring to there. But in terms of the activity in that space, it has picked up. We are definitely in the deal flow. are evaluating numerous opportunities routinely. Discipline in how we approach it. We wanna make sure our economic underwriting is appropriate. But there could be significant opportunities to increase our activity there. And the bank markets have begun to open back up a bit. RBL transactions. are definitely available to us. So we're generating nice cash flow out of that part of our business. If necessary, we could finance activities there as well. So hopefully we'll continue to see growth out of that part of our business.
spk04: Okay, gotcha.
spk08: All right, thank you very much. Thanks, Arthur.
spk01: Our final question is from the chair, private investor. Please proceed.
spk02: Hello. I noticed you mentioned about the non-fossil fuel investments. Would that by any chance you guys be open-minded to some non-fossil fuel mining? So, for example, in Bloomberg, I read that one of the Trona mines up in Wyoming might be for sale by Tata from India there. If anything like that crossed your guys' minds as being possible with your mining experience and so on, Yeah, that's very green, you know, that's used for glass, for solar panels, and this kind of a thing that might help for financing the whole company.
spk05: Right. You know, mining obviously has a core competency of ours, so that is definitely a vertical that we're evaluating. Again, I don't have anything specific I can share with you. We're just not advanced enough to lay out a real concrete strategic plan discussion on that, but mining is a core competency of ours, and we're definitely evaluating areas where we could produce other products and use our skill set.
spk08: Excellent. Thank you. Thank you.
spk01: We have reached the end of our question and answer session. I would like to turn the call back over to Brian for closing comments.
spk03: Thank you, Sherry. We appreciate everyone's time this morning, as well as your continued support and interest in Alliance. Our next call to discuss our first quarter 2022 financial and operating results is currently expected to occur in early May, and we hope you'll join us again at that time. This concludes our call for today. Thanks to everyone for your participation and continued support of ARLP.
spk01: Thank you. This concludes today's conference. You may disconnect your lines at this time, and thank you for your participation.
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