Foresight Energy capitalized on strong export markets and improved domestic spot opportunities to post record steam coal sales of 23.4 million tons in 2018, generating total revenue of $1.1 billion and adjusted EBITDA of more than $313 million, the Murray Energy subsidiary said on February 27.

This year isn’t looking too shabby either as the St. Louis-based company is looking to preparing to reopen its long-idled Deer Run, or Hillsboro, underground steam-coal mine in Montgomery County, Illinois. The mine has not produced coal on a regular basis since March 26, 2015, when it was shut down by the federal Mine Safety and Health Administration because of elevated carbon monoxide readings resulting from a combustion event.

Robert D. Moore, Foresight president and CEO, said Foresight also enjoyed a good fourth quarter of 2018 by selling more than 6.1 million tons and generating revenue of approximately $299 million, resulting in EBITDA of nearly $87 million.

“These results reflect continued improvement in our year-over-year and sequential quarter-sales volumes, sales realization per ton sold and sales revenue,” he said. “Our fourth-quarter results were the capstone of another successful year for Foresight.”

Foresight produced more than 6 million tons of coal in the October-December period, up from approximately 5 million tons a year earlier. Coal production for calendar-year 2018 amounted to 23.3 million tons, versus 21.2 million tons in 2017, for an increase of nearly 10%.

Moore said the production levels underscore the efficiency and productivity of Foresight’s underground mines, “which places our mines among the most efficient and productive underground mines in the country, as measured on a clean-ton-per-underground man-hour work basis.”

In 2018, Foresight’s Williamson and Sugar Camp deep mining complexes in southern Illinois ranked as the second and third most-productive mines in the United States, he added, generating 17.4 tons and 16.3 tons per underground man-hour work, respectively. On a combined basis, the Foresight mines produced more than 17 tons per underground man-hour worked during the fourth quarter of last year, and 15.3 tons per underground man-hour worked for the full year.

That compares to the national average for underground mines of 4.7 tons per man-hour worked during the fourth quarter and 4.6 for underground man-hour worked for all of 2018.

Foresight’s record sales volumes included exports of 2.7 million tons in the fourth quarter and approximately 9 million tons into the export market for full-year 2018, representing 43% and 38% of the company’s total sales volumes, respectively.

According to Moore, Foresight’s mining operations generated $39.2 million of excess cash flow in 2018, “and was less than four times levered as defined in our March 2017 credit and guaranty agreement. Pursuant to the terms of the credit agreement, we will be sweeping to our first-lien lenders 50% of the excess cash flow, or approximately $19.6 million. The retained portion of excess cash flow of $19.6 million will be available for distribution to our common unitholders in 2019.”

Foresight intends to use its excess cash flow for debt repayment and distribution to its common unitholders.

Moore said Foresight is profiting from its ability to serve some new domestic markets. “What we’re seeing is as utility customers are unable to find coal that they have historically been able to source, they are looking outside of the box and coming up with what I’ll refer to as blends of coal, that allow them to meet the specifications of their specific boilers, and we’re trying to take advantage of that where we can. Given our low-cost platform, we’re able to blend our products with other coals that allow that other product maybe to be stretched a little bit more and it’s allowing us to hit some new markets.”

In response to a question, Moore said the combustion event at Deer Run “is no longer an issue.” The company sealed the area where the event occurred and is now in a new longwall district. “We have resumed the development of a panel that existed in the new district.” Foresight is working with regulators “to gain a ventilation plan that allows us to ventilate the longwall,” he noted.