Alliance Resource Partners (ARLP) – Opportunity Knocks

Natural Resources
0 min read

Thursday, December 21, 2023

ARLP is a diversified natural resource company that generates operating and royalty income from coal produced by its mining complexes and royalty income from mineral interests it owns in strategic oil & gas producing regions in the United States, primarily the Permian, Anadarko and Williston basins. ARLP currently produces coal from seven mining complexes its subsidiaries operate in Illinois, Indiana, Kentucky, Maryland and West Virginia. ARLP also operates a coal loading terminal on the Ohio River at Mount Vernon, Indiana. ARLP markets its coal production to major domestic and international utilities and industrial users and is currently the second largest coal producer in the eastern United States. In addition, ARLP is positioning itself as an energy provider for the future by leveraging its core technology and operating competencies to make strategic investments in the fast growing energy and infrastructure transition.

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Presentation at NobleCon19. During Noble’s recent investor conference, Mr. Cary Marshall, Senior Vice President and CFO, provided a corporate overview and participated in an economic perspectives panel moderated by Emmy award winning reporter Michael Williams. Mr. Marshall highlighted how Alliance is well positioned to benefit from the electrification of the U.S. economy. He noted that while U.S. total electricity generation grew by 0.5 trillion kilowatt hours during the period 2000 to 2020, the U.S. Energy Information Administration forecasts total generation growth of 1.3 trillion kilowatt hours between 2023 to 2050. Growth in electric vehicles, onshoring of U.S. manufacturing, data center growth, and use of computer applications are expected to provide a boost in demand for electricity.

A forward-thinking diversified energy company. While Alliance’s coal business generates the largest share of the partnership’s revenue and EBITDA, investors may underappreciate the fact that ARLP is evolving into a more diversified company. Since 2014, the company has invested a total of $705 million to grow its oil & gas royalty business and has also invested in businesses that position it to evolve with the needs of the market, including Infinitum (electric motor technology), Ascend Elements (battery metals recycling), and Matrix Design Group, a wholly owned subsidiary that provides mining and industrial technology solutions.

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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 


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