聯盟資源夥伴 (ARLP) 2026 年第三季財報電話會議：煤炭成本下降，EBITDA 成長 26.3%

Alliance Resource Partners L.P. (NASDAQ: ARLP) 公布 2026 年第三季營收與獲利成長，主要歸功於煤炭出貨量增加、單位成本降低以及收購 AllDale III 與 IV，抵消了平均煤炭售價疲軟的影響。

重點摘要

• 總營收年增 5.5% 至 6.03 億美元。歸屬於 ARLP 的淨利成長 46.8% 至 1.396 億美元，或每有限合夥單位 1.08 美元。
• 歸屬於 ARLP 的調整後 EBITDA 年增 26.3%、季增 26.4% 至 2.339 億美元。
• 煤炭銷量年增 7.4% 至 930 萬噸。煤炭部門調整後 EBITDA 成長 18.6% 至 1.868 億美元，主因成本降低抵消了平均售價下滑 8.3% 的影響。
• 在 AllDale III 與 IV 首個完整季度的貢獻推動下，石油與天然氣權利金營收創下 5,980 萬美元的新高紀錄。權利金產量亦創下 145 萬桶油當量 (BOE) 的新高。
• 自由現金流為 1.986 億美元，可分配現金流則年增約 29% 至 1.368 億美元。配息覆蓋率提升至 1.76 倍。
• 管理層上調了 2026 年煤炭銷量指引的中位數，預計銷量將達到 3,450 萬至 3,550 萬噸。

關鍵財務數據

淨利包含數位資產公允價值增加 1,650 萬美元，以及重新衡量 ARLP 先前持有的 AllDale III 股權所產生的 630 萬美元非現金利益。這些有利因素被較高的所得稅費用，以及收購衍生金融工具產生的 730 萬美元損失（包含 670 萬美元未實現損失）部分抵消。

業務與營運表現

煤炭營運

ARLP 的平均煤炭售價與調整後 EBITDA 費用之間的價差，由上一季的每噸 16.19 美元擴大至 18.29 美元。

伊利諾盆地銷量年增 6.4%、季增 10.5% 至 700 萬噸。調整後 EBITDA 年增 32.6% 至 1.398 億美元。單位費用下降 10.2% 至每噸 31.77 美元，反映出 Hamilton 恢復長壁開採以及 River View 成本改善。

阿帕拉契銷量年增 10.7% 至 230 萬噸。由於低價 Tunnel Ridge 煤炭佔比上升，平均售價下跌 25.1% 至每噸 62.35 美元。單位費用改善 19.9% 至每噸 46.25 美元。

ARLP 在本季新增了截至 2028 年共 420 萬噸的已簽約訂價銷量。該公司 2027 年已有 3,170 萬噸已簽約訂價，其中包含與新 Mettiki 供應協議掛鉤的 70 萬噸。

2026 年出口合約銷量為 370 萬噸，2027 年為 300 萬噸。管理層表示，額外的出口機會可能推升明年的出貨量，惟仍須視運輸能力與經濟效益而定。

Mettiki 重啟

一項新的多年期供應協議將使 Mettiki 及近 150 名礦工重返煤炭生產。ARLP 計劃在 2027 年第一季末前，將該礦區從長壁開採過渡至兩個房柱式開採區，每日營運兩班制。

管理層預計 Mettiki 在 2027 年的產量將比 2026 年增加約 55 萬噸，且每噸調整後 EBITDA 費用較低。除了 70 萬噸的國內合約承諾外，該營運項目還可向出口冶金煤市場供應 15 萬至 20 萬噸。

石油、天然氣與煤炭權利金

石油與天然氣權利金營收年增 61.3% 至創紀錄的 5,980 萬美元。受惠於收購 AllDale III 與 IV，產量季增 54.9% 至創紀錄的 145 萬桶油當量 (BOE)。

歸屬於 ARLP 之石油與天然氣權利金調整後 EBITDA 年增 61.4% 至 4,360 萬美元。受 Tunnel Ridge 與 Hamilton 權利金噸數增加的支撐，煤炭權利金調整後 EBITDA 成長 6.2% 至 1,820 萬美元。

管理層預計，在 AllDale III 與 IV 的全年效益發揮下，現有石油與天然氣資產將在 2027 年實現有機產量成長。ARLP 還打算繼續評估符合其風險調整後報酬門檻的權利金收購案。

資產負債表與流動性

截至 2026 年 9 月 30 日，總債務與融資租賃為 6.799 億美元。總槓桿率為 0.89 倍，淨槓桿率為過去 12 個月歸屬於 ARLP 之調整後 EBITDA 的 0.78 倍。

淨債務較上季增加 1.16 億美元至 5.95 億美元，低於 7 月 1 日為 AllDale III 與 IV 支付的 2.062 億美元收購價。總流動性為 4.308 億美元。ARLP 還持有 673 枚比特幣，價值 5,630 萬美元。

管理層財務指引

管理層表示，第四季伊利諾盆地的成本應與第三季水準相當。管理層亦預計 2027 年合併煤炭營營收將持平或略高於 2026 年，且 2028 年價格將有所轉強。

若出口物流改善，管理層認為在無需額外營運投資的情況下，2027 年煤炭銷量可能比今年水準增加約 50 萬至 100 萬噸。ARLP 計劃在 2 月公布第四季財報時發布正式的 2027 年指引。

風險與關注焦點

• 駁船運力緊張，部分原因是路易斯安那州競爭性的骨材（砂石）運輸，這可能會限制出口量的成長。
• 儘管海運動力煤價格走強，但駁船和海運運費上漲正在壓縮出口利潤率。
• 煤炭價格仍對區域及產品品質折扣敏感，包含 Hamilton 與硫含量相關的折扣。
• 石油與天然氣權利金業績仍受原油和天然氣價格以及生產組合變化的影響。
• 權益法投資收益可能隨每季基金估值而波動。管理層認為，每季 300 萬至 400 萬美元的現金分配是比報告收益更可靠的規劃假設。
• 供應鏈通膨可能會對營運費用帶來壓力，但管理層認為目前的煤炭成本水準是可維持的。

分析師問答重點

• 煤炭成本可持續性：管理層表示，第四季成本應與第三季相當。Hamilton 的全年營運應有助於 2027 年表現優於 2026 年。
• 出口上行空間：提升產量無需額外投資或營運調整。物流與運費經濟效益是主要限制因素。
• 石油與天然氣成長：管理層預計現有資產將在 2027 年實現有機產量成長，並計劃在報酬吸引力高時，將稅後現金流再投資於額外的礦產權益。
• 債務償還：ARLP 計劃利用礦產業務的現金流，按季分期償還其新增的 1.5 億美元礦產層級、為期 18 個月的融資額度。
• 股利發放政策：管理層希望在考慮調升配息前，將配息覆蓋率連續維持在至少 1.5 倍以上超過一個季度，同時保留資本用於減債及收購礦產。

電話會議完整逐字稿

完整財報電話會議逐字稿

管理層陳述

Operator

Greetings, and welcome to the Alliance Resource Partners L.P. Third Quarter 2026 Earnings Call. [Operator Instructions] A reminder, this conference is being recorded.

I'll now turn the conference over to your host, Cary Marshall, Senior Vice President and Chief Financial Officer. Please go ahead.

Cary Marshall

Thank you, operator. Good morning, and welcome, everyone. Earlier today, Alliance Resource Partners released its third quarter 2026 financial and operating results. We will review the quarter, discuss our outlook for the remainder of 2026 and then open the call to answer your questions.

Before beginning, a reminder that some of our remarks today may include forward-looking statements, which are subject to a variety of risks, uncertainties and assumptions 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 1 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 will 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 8-K.

With that, I will begin with a review of our third quarter 2026 results including the first full quarter of contribution from our AllDale III and IV acquisition and discuss our updated guidance for 2026, before turning the call over to Joe Craft, our Chairman, President and Chief Executive Officer, for his comments.

Before I get into the numbers, one note on presentation, beginning this quarter, we redefined how adjusted EBITDA is calculated to include noncontrolling interest. And as a result, we'll be reporting adjusted EBITDA attributable to ARLP which excludes amounts attributable to noncontrolling interest in AllDale III and IV and Cavalier Minerals within our Oil & Gas Royalties segment. Prior periods have been adjusted to conform to this presentation.

Overall, results for the third quarter of 2026, which we refer to as the 2026 quarter, were higher on a year-over-year and sequential basis. Compared to the prior year, which we refer to as the 2025 quarter, total revenues increased 5.5% to $603 million. Net income attributable to ARLP increased 46.8% to $139.6 million or $1.08 per basic and diluted limited partner unit and adjusted EBITDA attributable to ARLP increased 26.3% to $233.9 million.

Compared to the second quarter of 2026, which we refer to as the sequential quarter, total revenues increased 9.3%. Net income attributable to ARLP increased 75.5% and adjusted EBITDA attributable to ARLP increased 26.4%. Net income in the 2026 quarter benefited from a $16.5 million increase in the fair value of our digital assets and a $6.3 million noncash gain from remeasuring our previously held equity interest in AllDale III in connection with the AllDale III and IV acquisition. Partially offsetting these items were higher income tax expenses and a $7.3 million loss on derivative instruments assumed in the acquisition, of which $6.7 million was unrealized.

Income from our equity method investments was $12.8 million in the 2026 quarter compared to $4.5 million in the 2025 quarter and $9.5 million in the sequential quarter. The increase was driven primarily by higher income and valuations by our investments in the Gavin Power Plant and the NGP fund, both of which continue to perform well. As a reminder, results from these investments can vary from quarter-to-quarter as valuations change.

Turning to coal operations. Sales volumes were 9.3 million tons, up 7.4% year-over-year and 9.2% sequentially. Segment adjusted EBITDA increased to $186.8 million up 18.6% year-over-year and 23.1% sequentially as higher volumes and lower per ton expenses more than offset lower average pricing. Our average coal sales price per ton was $53.93 in the 2026 quarter, down 8.3% year-over-year and 1.7% sequentially, primarily due to a higher sales mix of lower priced Tunnel Ridge volumes.

Segment adjusted EBITDA expense per ton was $35.64, improving 13.1% year-over-year and 7.9% sequentially. The reduction in per ton expense more than offset lower average pricing, increasing the spread between sales price and segment adjusted EBITDA expense to $18.29 per ton from $16.19 per ton in the sequential quarter. In the Illinois Basin, coal sales volumes were 7 million tons, up 6.4% year-over-year and 10.5% sequentially, driven by the resumption of longwall production at Hamilton. Illinois Basin coal sales price per ton was $51.16 in line with comparable periods while segment adjusted EBITDA expense per ton improved to $31.77, down 10.2% year-over-year and 11.1% sequentially, due to higher production at Hamilton and improved per ton cost at our River View complex.

Illinois Basin segment adjusted EBITDA was $139.8 million, up 32.6% year-over-year, and 34.1% sequentially. In Appalachia, wholesales volumes were 2.3 million tons, up 10.7% compared to the 2025 quarter and up 5.7% compared to the sequential quarter on strong sales at Tunnel Ridge. Appalachia coal sales price per ton was $62.35 down 25.1% year-over-year and 1.9% sequentially, primarily due to the higher sales mix of lower priced Tunnel Ridge volumes that I mentioned a moment ago.

Segment adjusted EBITDA expense per ton was $46.25, improving 19.9% year-over-year and essentially flat sequentially due to increased production at Tunnel Ridge and a higher sales mix of lower cost tunnel ridge volumes.

Shifting to our royalty segments. Total royalty revenues were $87.5 million, up 52.5% year-over-year and 26.4% sequentially and segment adjusted EBITDA attributable to ARLP was $61.8 million, up 40% year-over-year and 22.8% sequentially. The 2026 quarter was the first full quarter, including AllDale III and IV in our Oil & Gas Royalty segment.

Oil & Gas Royalty revenues were a record $59.8 million and BOE volumes were a record $1.45 million, up 61.3% year-over-year and 54.9% sequentially, primarily due to the acquisition. Average sales price per BOE was $41.21, up 15.5% year-over-year as higher realized crude oil prices more than offset the greater natural gas weighting following the acquisition. Sequentially, average price declined 16.6%, primarily due to lower realized crude oil prices and a higher natural gas mix.

Oil & Gas Royalties segment adjusted EBITDA attributable to ARLP was $43.6 million, up 61.4% year-over-year and 16.8% sequentially. The Coal Royalties segment adjusted EBITDA was $18.2 million, up 6.2% year-over-year and 40% sequentially driven by higher royalty tons sold, primarily from Tunnel Ridge and Hamilton.

As of September 30, 2026, total debt and finance leases outstanding were $679.9 million our total and net leverage ratios were 0.89 and 0.78x debt to trailing 12 months adjusted EBITDA attributable to ARLP. Net debt, which we define as total debt and finance leases less cash was $595 million at September 30 compared to $479 million on June 30, 2026. That increase of $116 million is well below the $206.2 million AllDale III and IV purchase price we paid on July 1.

We ended the 2026 quarter with total liquidity of $430.8 million. Additionally, we held 673 Bitcoins valued at $56.3 million at quarter end. Our cash flow trends continued to strengthen during the quarter. Free cash flow was $198.6 million in the 2026 quarter. Distributable cash flow increased to $136.8 million in the 2026 quarter, up approximately 29% year-over-year and up 27% sequentially. Our distribution coverage ratio increased to 1.76x, representing a significant improvement relative to comparable periods.

Turning to our updated 2026 guidance with 1 quarter remaining in the year, we are tightening our guidance ranges. In coal operations, we now expect total coal sales volumes of 34.5 million to 35.5 million tons, which raises the midpoint of our prior range with coal sales price per ton of $54.25 to $54.75 and segment adjusted EBITDA expense per ton of $37.50 to $38.50.

In the Oil & Gas Royalty segment, our tightened volume ranges reflect a slightly higher natural gas weighting following the acquisition of the AllDale III and IV acquisition, and we have also tightened our consolidated guidance ranges. Reflecting the consolidation of our AllDale III and IV, our consolidated guidance now includes ranges for both net income and adjusted EBITDA attributable to noncontrolling interests, which are detailed in our press release. As is our usual practice, we expect to provide 2027 guidance with our fourth quarter results in February.

And with that, I'll turn the call over to Joe for his comments. Joe?

Joseph Craft

Thank you, Cary, and good morning, everyone. Thank you for joining our call today. We had an outstanding third quarter, led by strong shipments from our coal operations. Hamilton's returned to longwall production and solid operating performance at Tunnel Ridge and our River View complex.

Segment adjusted EBITDA at our coal operations increased 18.6% year-over-year and 23.1% sequentially. While segment adjusted EBITDA expense per ton sold declined 13.1% year-over-year and 7.9% sequentially. Additionally, as Cary said, our Oil & Gas Royalty segment results benefited from our first full quarter, including AllDale III and AllDale IV.

Before turning to operations results, I wanted to take a moment to congratulate our mine rescue teams for their exceptional performance at the National Mine Rescue Competition posted in Tennessee during August. Members from our Alliance coal team took the stage 12 times during the award ceremony this year, including individual recognition for a national champion, a national runner up and 3 state team championships.

On the production side, our coal operations teams delivered across the board. At Hamilton, the longwall returned to production following an extended move set monthly production records in July and August and was our lowest cost operation in the 2026 quarter. That performance was the primary driver of a 10.2% year-over-year and 11.1% sequential improvement in Illinois Basin segment adjusted EBITDA expense per ton.

Tunnel Ridge continued to deliver strong sales, helping hold Appalachia segments and adjusted EBITDA expense per ton essentially flat sequentially and lower by 19.9% versus the 2025 quarter. These improvements are the direct result of capital we invested in our operations over the past several years, leading to a lower cost, more reliable platform.

One additional development from the quarter involves our Mettiki operation. You may recall, we issued a warn notice in the first quarter of 2026 and suspended mining operations. We are pleased to announce a new multiyear coal supply agreement with our largest historical customer that will allow the mine in nearly 150 miners to return to coal production operations. The mine has been transitioning from longwall mining to what we plan to be a 2 room and pillar mining sections, 2 shifts a day by the end of the first quarter of 2027 and to better align production with customer demand. As a result of winning this business, 2027 production from the Mettiki mine, is expected to be approximately 550,000 tons higher than 2026. EBITDA expense per ton next year should be lower than 2026 as well.

On the commercial side, domestic coal burn improved in the third quarter after a soft first half of the year. Sustained late summer heat drove record September power demand and coal-fired generation in September was up more than 40% year-over-year in PJN and roughly 25% to 33% across the Southeast, the Carolinas and Tennessee. That burn drew Eastern U.S. domestic coal inventories down to slightly below last year's levels.

Near-term solicitation activity remains measured as customers take a wait and see approach heading into winter. But we view that as a matter of timing, not a change in underlying demand. We continue to convert this constructive market into contracted volumes. During the 2026 quarter, we added 4.2 million committed and priced tons through 2028, and we remain essentially fully committed at the midpoint of our 2026 sales volume guidance with 31.7 million tons committed in price for 2027 which includes 700,000 tons to be shipped to meet Mettiki's new sales commitment I just talked about.

We expect to enter next year with substantial visibility and the operating capacity to capture additional demand as commercial opportunities develop.

Export markets have become a more meaningful component of our sales portfolio with 3.7 million tons committed and priced for 2026 and 3 million tons for 2027. Export volumes have come in well above our expectations entering this year. Seaborne thermal prices strengthened through the quarter, with APIII rising from about $105 per ton at the start of the quarter to about $140 per ton by the end of September. And industry analysts have raised their outlook for U.S. thermal coal exports for both this year and next. Market conditions remain dynamic, and we remain cautiously optimistic that additional export opportunities could provide upside to our sales volumes next year.

Turning to the broader markets. We believe the fundamentals supporting coal demand continued to build. Electricity load in the markets we serve is growing, while permitting, interconnection and supply chain constraints are slowing the pace at which new generation can come online. According to [indiscernible] GE Venova, the leading gas turbine manufacturer is now sold out of new turbine deliveries until 2031. We believe this dynamic will extend the runway for the existing coal fleet. On data center demand specifically, the market is becoming more disciplined, and we think that is a healthy development. Utilities and grid operators are increasingly counting only contracted financially committed data center load in their forecast. Even on the stricter basis, the market still expects demand growth to be substantial and new generation has taken years longer to build than planned. Both trends point to the same conclusion. The existing coal fleet will be needed longer and running it harder is the fastest and most affordable way to serve that load. We expect the impact to become increasingly visible in our customers' coal burn, as data center-driven demand materializes with the more meaningful impact beginning in late 2027 and into 2028. Affordability is central to this discussion.

We continue to see evidence that existing cogeneration remains cost competitive. One example is a recent Indiana study by always on energy research which concluded that existing coal plants become increasingly cost competitive the harder they run and 75% of the state's coal plants could produce electricity more cheaply than the new combined cycle gas. The same analysis found that Indiana's existing combined cycle gas fleet already ran at an 83% utilization in 2024, leaving limited room to serve new load, which makes the existing coal fleet well suited to meet incremental demand.

Federal policy continues to recognize the value of the existing coal fleet and the administration continues to take the steps necessary to protect it. In September, the EPA finalized a rule repealing most of the 2024 greenhouse gas standards for power plants, including the carbon capture requirements for existing coal units and proposed repealing the remaining standards. More broadly, there is growing recognition among all stakeholders that leadership in artificial intelligence and the security of the grid are national security priorities for our country, and then both depend on abundant, reliable and affordable electricity.

Taken together, we believe these actions support extending the operating lives of existing coal plants as critical grid resources.

Turning to Oil & Gas Royalties. I want to briefly highlight our record results, which included the first full quarter with the AllDale III and IV acquisition. As we continue to scale the portfolio, Oil & Gas Royalties is contributing a more meaningful share of ARLP's consolidated free cash flow, highlighting the growing importance of the segment within our overall business. If today's higher crude oil prices remain elevated, we could be in a position to have another record quarter to finish the year.

We are also excited to increase our exposure to gas-weighted resource plays in the Haynesville given the long-term tailwinds from LNG exports and power demand. Going forward, we will remain disciplined in reinvesting the after-tax cash flows generated by the Oil & Gas business in existing regions that meet our risk-adjusted return thresholds. That concludes our prepared comments, and I'll now ask the operator to open the call for questions.

Operator

[Operator Instructions] Our first question comes from the line of Matthew Key with Texas Capital Securities.

分析師問答

Matthew Key

Great job on the quarter. I wanted to start off on Mettiki first, congrats on the multiyear coal supply agreement there. I was wondering if you could provide some more color on what changed there as you kind of navigate that process? It seems like a great outcome. It should be a pretty meaningful tailwind in 2017.

Joseph Craft

I think that we had just continued conversations of the importance of our operation to their security of supply as they look at their demand for electricity caused by the data center contracts that they signed. They spent quite a bit of time looking at capital improvements at there at the Mount Storm plant and through just continued conversations, I think they recognize the value that we bring by giving them sustainable coal production at a level that if we weren't there, would make it a lot more risky for them. So we appreciate their trust in us, and we really are excited to be able to provide opportunities for the miners in that region.

And we do believe that even though it's not at the scale we would like by converting to a continuous minor operation. It will give us a little bit more opportunities to participate in the export met market because we can be a little bit more selective in mining the seams that gives us a better quality product to access the export met market.

So like I say, it's great that we've got the additional volume. We can keep the mine open. And we do believe that, that will improve our results in 2027 as we did have quite a bit of -- we did have some loss in '26 while we were waiting for this contract to materialize.

Matthew Key

Got it. That's helpful. And I guess the next 1 would be for me. Just kind of just comment on the strong cost performance in [indiscernible] I know a big factor in that was the resumption of longwall production at Hamilton. But I'm curious about your view about how sustainable that cost performance is as we look out to the coming quarters. Basically, was this a uniquely strong quarter for the segment? Or should we kind of consider this close to a new normal in the Elanor basin?

Joseph Craft

I think that as you look to the fourth quarter, it should be comparable and it is normal in that sense. As you look at '27 given the fact that Hamilton was down half of the year, we should see improvement in '27 relative to '26. We have potential with the export market that gives us some more demand next year that we could expand volume a little bit more. So we do have some excess capacity, if the market would allow us to do that. And we do have that ability to mine a few more times that could help our costs as well.

So we feel very good that we can maintain costs at the level we are with inflation pressures that are occurring throughout the supply chain. So again, it's a tribute to our operations for their focus on productivity and being a low-cost producer.

Operator

Our next question comes from the line of Nathan Martin with Stonex Group.

Nathan Martin

Congrats on closing the AllDale transaction. Joe, I just wanted to come back to the export opportunity comments you made, how that could possibly provide some upside to sales volumes next year. How would you frame that potential upside versus the 35 million-ton midpoint of this year's sales guidance, and would you have to make any operational changes or investments to produce those incremental tons?

Joseph Craft

To answer your latter question, no, we don't need to make any additional investments or operational changes to be in a position to produce more. The price -- the reason I feel somewhat optimistic is the price curve is very constructive for export shipments. However, we are facing some logistical headwinds, barge capacity has become very, very tight due to aggregate movements that are necessary or I must project down Louisiana, that's sort of -- we're competing, I guess, for barges that in the [ Olin ] Basin that could impede our ability to grow beyond where we are. .

And also the increased cost in both ocean freight as well as the barge businesses is eating up a lot of the margins that historically when we've talked about 125 is sort of a threshold. We'll have to see that stabilize a little bit. But the real key is, can we get the tons outside the country. So if we can clear up some of the logistical issues, we're pretty confident that we could exceed our volume this year maybe by 0.5 million or 1 million tons.

Nathan Martin

Okay. Great. And then along those lines, Joe, you mentioned 125 just to kind of do that threshold. What kind of netbacks are you guys seeing right now API2 prices currently and at least the high 140s, I think, last I looked.

Joseph Craft

Yes. So again, it's raised by operation, we go to Hamilton, it has a sulfur discount to it. If we go to Gibson is pretty consistent with what the domestic markets are and the discount is varies by customer by customer. So prefer not to talk about that given the fact that we're continuing to negotiate with our training partners on that.

Nathan Martin

Okay. I appreciate that. Maybe 1 final question. Just coming back to Mettiki, you mentioned the export met possibility there. Can you remind us how many tons we could see come out of that operation?

Joseph Craft

So we think we could expand another couple of hundred thousand tons beyond the Dominion contract and many contracts were 700,000 tons next year. So we feel like it's possible we could have 150,000 to 200,000 tons in the met market...

Operator

Our next question comes from the line of Mark Reichman with Noble Capital Markets.

Mark La Reichman

Thank you. You've been doing a great job signing committing new volumes. I was just kind of wondering how those 2027 committed in price volumes, how the pricing is looking there relative to the 2026 pricing?

Joseph Craft

Market has been trending up. So we've been able to capture some of that. I think it's a little early to project exactly where it will be, but we do expect 2027 revenues to be equal to, if not slightly higher than where we are on a consolidated basis for the coal segment. And in the out years, '28, the pricing is a little bit stronger to where, again, we should be able to maintain, if not grow our revenue on a per ton basis for the next 2 years. A lot of that but we'll have to see...

Mark La Reichman

Well, that's very helpful. The -- on the equity method investments, I was just kind of curious, you had $12.8 million versus I think it was $9.5 million in the second quarter? And how much of the third quarter contribution came from Gavin versus other equity investments and is that $3 million quarterly guidance, is that still appropriate? Or is there a way to kind of think about how much investors should expect in terms of kind of recurring income from those investments?

Joseph Craft

Yes, Mark, on that one, as I mentioned in my remarks, those 2 investments continue to perform well. If you look at that total number there, about 85% of that was associated with Gavin. Our investment there. The remaining piece of it would be the NGP investment. Both those investments continue to perform well. It's really hard to predict what that number is going to be on a quarter-to-quarter basis. We're invested in funds there. So we're subject to fund investment accounting there. So that kind of gets revalued really at the end of each quarter, kind of the way that we look at it in some of our past guidance where we've talked about $3 million of distributions, we kind of focus on the distribution number that comes out of it. Now the distributions have been strong in the last couple of quarters, $8.5 million this quarter. I think it was $10.7 million the quarter before. .

We still think, as we look at that kind of that $3 million to $4 million per quarter is just a good number to count on. That's kind of how we look at it in terms of distributions coming in. What that earnings is going to be is going to bounce around there, and that's really hard to project. But that's kind of how we look at it. And so we kind of count $3 million to $4 million per quarter just in terms of cash distributions coming in.

Mark La Reichman

Just on the oil and gas business, I mean, which has really performed well. When you think about 2027 royalty production, I don't want to get ahead of guidance, but like how much of that -- how much of the production do you anticipate would kind of come from existing producing wells versus new drilling on undeveloped acreage. I'm assuming the operators -- the development activity has gone up in response to the commodity prices. But I mean, do you think because of that, you're going to see some pretty strong organic growth in 2027 really without the need for additional acquisitions? Or are you still pretty much focus on continuing to make acquisitions where they're available.

Joseph Craft

Yes, I think we'll definitely continue to focus on making acquisitions. I mean, our focus is to continue to reinvest that cash flow that we have within that business there. I do think when you look at volume growth, I think even if we didn't make acquisitions, you would continue to see volume growth associated with our existing assets that we have there. So -- we're very optimistic in terms of what the volumes will be for us next year in terms of looking at the year-over-year growth.

We're right in the middle of doing our reserve studies for the fourth quarter right now. So when we get to February and we talk about what our guidance is there, we'll have a pretty good handle of it at that point in time. But we should see some pretty good volume growth next year just because from the fact that we'll get a full year benefit from our AllDale III and IV acquisition as well.

Cary Marshall

We are seeing private invest back to our there with these high prices, there are people that are going and trying to increase their volumes to take advantage of that higher price environment.

Mark La Reichman

Right. Well, thank you very much. I really appreciate that, and it was a great quarter.

Operator

Our next question comes from the line of Michael Mathison with Sidoti & Company.

Michael Mathison

Congratulations on the quarter. Yes. Just coming to my questions, some of the good news you saved to the end, which is reopening the Mettiki mine. I recall that you had a very big asset write-down in Q1 regarding to shutting the mine. What does reopening mean in terms of that carrying value?

Joseph Craft

I think as we reopen, we don't plan to -- I mean we'll do some investments in equipment, but it's not really going to change what that carrying value is on the balance sheet. So that number will continue to remain where that is. We are making investment. We did write it down to the point where most of the assets on the balance sheet are mobile type assets there. So I don't really anticipate any additional adjustments in terms of balance sheet adjustments at this point in time associated with restarting the operation.

Michael Mathison

Great. Coming to the impact of the AllDale acquisitions, you took on some debt, you didn't fund the whole thing with debt, how much of it was cash, but there was some increase in debt. Do you foresee paying that debt down? Or would you expect to just continue to operate at this leverage level?

Cary Marshall

No. I mean the debt facility, so we did 2 things to fund that acquisition. We did draw at the end of the last quarter on our existing revolving credit facilities for about 3/4 of that total transaction. We did enter into a new $150 million short-term debt facility at minerals. So that's an 18-month facility. We do anticipate amortizing that down on a quarterly basis. And so we made our first quarterly payment right at the end of September associated with that.

So we will use the minerals cash flow to pay that facility down. We will still have a good amount of additional cash flow over and above that to continue to invest in additional minerals assets and financing markets are very supportive of this asset class. And so there is additional debt capacity. So in the event we see more sizable type acquisition other than just funding out of cash flow. There could be opportunities to enter into other facilities or continue on with this facility as well to support that growth.

Michael Mathison

Okay. Great. Very helpful. Looking at another use of cash, your distribution coverage ratio was 1.76 in the quarter. That's a 3-year high. Is there any possibility of an increase in the quarterly distribution? Or would you be prioritizing the debt paydown instead or other uses of cash?

Joseph Craft

I'd say we would more than likely be even our powder dry on that. We've got several things that we're considering. We're -- if the deal flow is there for minerals, I think we would continue to invest in that. And like Cary just said, we could potentially go higher than what their net cash is. And yes, so we're looking at other opportunities to how we could -- what the capital allocation would be. But I think right now, we want to stay at the 1.5x coverage ratio or greater. And I think that's a target that we must sustain beyond 1 quarter before we would consider increasing distribution.

Michael Mathison

Sure. That's very helpful. And again, congratulations on the great results.

Operator

Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Mr. Marshall for any final comments.

Cary Marshall

Thank you, operator. To everyone on the call, we appreciate your time this morning and also your continued support and interest in Alliance. We expect to report fourth quarter and full year 2026 financial and operating results in early February and look forward to speaking with you then. This concludes our call for the day. Thank you.

Operator

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.