Question-and-Answer Session
Operator
Thank you. The question-and-answer session will be conducted electronically. (Operator instructions) And we’ll go first to Jim Rollyson with Raymond James.
Jim Rollyson - Raymond James
Good morning, Peter.
Peter Socha
Good morning, Rolly.
Jim Rollyson - Raymond James
Pretty decent prices you guys are booking coal for, specifically in the Midwest which implies mid -- low to mid teens when you get out to 11 and 12 and start realizing that on average.
Peter Socha
Yes.
Jim Rollyson - Raymond James
Anything you can point to on the cost side that should dramatically change, outside of the royalties, related to higher cost or higher pricing that changed that outlook?
Peter Socha
C.K., why don't you take that one?
C.K. Lane
We're going to be -- over the next few years, we’ll be shifting more to underground production with some of the reserves that we require. The good thing in the Midwest, there’s not a lot of different between the surface and the underground cost. So I think cost should stay close to where they’re at now in the near future.
Jim Rollyson -Raymond James
Okay. So that obviously becomes a--
Peter Socha
The Midwest will be good solid EBITDA generator from the next several years, Rolly.
Jim Rollyson - Raymond James
That’s a big difference from what you’ve seen the last two or three years.
Peter Socha
Yes. Right.
Jim Rollyson - Raymond James
So that’s a good thing. Nice work generally all around on cost this quarter especially given the volumes. Any kind of indication on what you’re looking at for 4Q? And just how you’d see that trending going forward? Any opportunities to continue the cost saving issues or efficiency projects or stuff you’ve been doing?
Peter Socha
Well I’ll tell you, if you ever want to watch C.K. pucker, ask him about the $0.12 that missed [ph]. He was determined to get cost below $63 this quarter. And he’s upset with Sam and Steve that he couldn't get there.
No. I asked Sam yesterday, ?Is there any thing material that we need to update on guidance?? And his answer was, ?No. We’re trending right where we are. We’re shipping our contracts." We’re really just shipping our contracts right now. As far as early next year, the first half of next year I think you should expect us to ship contracts plus a little. And on the back half of next year the contracts -- existing contracts plus a little more.
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