After 16 Years, a CFO Returns

Andy Bishop first ran finance for Hallador Petroleum in the early 1990s. Now he's back in the same job, but the company has changed dramatically.

We have about 28 million shares outstanding. It’s thinly traded, but if 2,000 shares trade in a day the stock can go from $6 to $7, because there’s not much float. Being listed on the Nasdaq will give us more visibility in the marketplace so that some of our existing shareholders can sell some of their stock in the open market. Hopefully we’ll get the float to the 20% range.

After you get the Nasdaq listing set up, what’s your role going to be?
We’ll start doing quarterly analyst calls, and I’ll be getting those going. We’ll also be going to investor conferences to tell our story.

Are you looking to get into additional coal mines?
Yes. Right now we’re a one-mine company, and you can’t be just that. In that sense it’s like oil and gas. We have finite reserves, and as they deplete you have to find new reserves. We have 45 million tons of coal reserves, and we’re producing in the range of 3 million tons per year, so if we don’t replace that production with new reserves, in 15 years we’ll be out of business.

Where will this growth take place?
The big thing for Peabody, the world’s largest coal company, is surface mining in Wyoming, but their growth is taking place in Australia and other places outside the United States. We don’t plan to do that. Our expertise is the Illinois basin, and we’re going to stick with that. There are opportunities there. And what makes the Illinois basin nice is that there are many public utilities with coal-fired generating plants near the coal mines. So the cost of transportation is not that much, compared with taking coal by train from Wyoming to, say, North Carolina.

How do you feel about working for a coal company, considering global warming and all the environmental activism?
People asked me about that when we were in the oil business, too. I say, the oil business makes America work. How many jobs does it provide? With coal, people say it’s nasty and dirty, but you need something to provide the energy that you convert to electricity. In Europe and Japan there is nuclear energy, which is fine. But in the United States people are afraid of nuclear energy, so we burn coal. About half of the electricity generated in this country comes from coal [according to the American Coal Foundation].

But that doesn’t answer the question about its dirtiness.
It’s not dirty. The mine is not like those old pictures you used to see where the miners have soot all over their faces. I was surprised when I first went to the mine. The technology is such that black lung disease is a thing of the past.

When you burn coal, you do get CO2 emissions. The [Environmental Protection Agency] says CO2 is dangerous, even though trees breathe it and give off oxygen. I’m not concerned about global warming. I am concerned about the environment, though. All the stuff that used to come out of smokestacks was nasty. That’s why laws were passed that limited the burning of high-sulfur coal. That put the Indiana coal business out of business, because the coal there is high in sulfur. But then technology to scrub it out was developed. All of a sudden, Indiana coal became valuable again.

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