Amit Dayal: Thank you. Good afternoon, everyone. Eric, just with respect to timing, it looks like at least from your recent updated business plan, roughly $100 million plus in CapEx is going towards the SAF and RD facility. So, when will sort of this start getting deployed? Do you have sort of a timeline? Is it second half, I’m assuming? But is there a catalyst that sort of triggers all of this and when would that materialize?
Eric McAfee: The $100 million we referred to is related to our biogas operations. We have $50 million which we closed last year. We expect to be getting $75 million –well actually $100 million of financing probably closing $75 million with the last $25 million dribbling into next year. So that’s actually it’s actually going to the biogas business. Separately, the SAF project financing is much larger than that. It’s in the $0.5 billion range. So, we have also a little bit of carbon sequestration financing going on, some mechanical vapor recompression of the ethanol plant going on, India expansion going on. And so, looking at each one of our subsidiaries as we described, India is self-funding its expansion from operating cash flow.
The USDA is helping us with some of the other smaller financings with 20-year amortized loans. And then we basically have one large financing this year that’s really not been achieved before and that’s financing this one SAF plant. But I tell you, the airlines and the aircraft manufacturers don’t have a lot of new permitted facilities in North America and certainly ones that are not massive $2 billion projects. So, we’re getting a lot of support and looking forward to cooperating with these customers, so we can get this production facility operating.
Amit Dayal: Understood. Thank you for that, Eric. And then with respect to the India Biodiesel Facility, I know you’re at 60 million gallons capacity now available. The business plan shows roughly 50% to 60% of that being utilized. Are you just being conservative with that outlook? Or is that just the visibility you have right now in terms of working with these oil marketing companies?
Eric McAfee: You are correct that we have continued to expand capacity. So, we’re ahead of the oil marketing companies. Since they are government owned, they tend to move a little slower than everybody else. But we have seen them now get a pricing model that has reduced the constraints on expanding production. So, we saw that coming. And so, over the last two years, we have expanded capacity to 60 million gallons. We’re continuing to invest to expand capacity. And I think we’ll have some upside surprises in terms of what our revenue will be out of India because capacity won’t be as much of a constraint. We’ll be literally able to contract 60 million gallons as we are building the plant capacity to 80, and then eventually 100.
And so, our strategy is to be ahead of the market and then let the market catch up with us. And we expect that to later on this year when we get our next 12-month allocation with these three oil marketing companies, it could be substantially more than the $150 million which we committed to last year.
Operator: Our next question is coming from Dave Storms with Stonegate Capital Market. Your line is live.
Dave Storms: My first question is just around the pacing of the dairy digesters. I know you mentioned you plan to be at 2018 by year end, but how should we think about how that will be spaced out through the year?
Eric McAfee: We’ll be operating digesters for 18 dairies and we’re increasingly going to be talking by the way about Wet Cow Equivalents because you can multiply that times a certain number of MMBtus per year and get the revenue in one step. So, over the course of this year during our earnings call and other messaging, we’ll be working toward Wet Cow Equivalents, which make everybody’s life a lot easier. We have two dairies coming online this month and that will be followed with in about six months in the third quarter with another round of dairies coming online. So, the third and fourth quarter is when you’re going to see some of the ramp up. The USDA financing process has temporarily made it somewhat chunky the way that we roll these processes out.
We get them all permitted, we get environmental approval and all these other things all done and then we kind of wait. We are putting some things in place that will allow us to not wait as much. And so, over the course of second quarter, I think you’ll see some additional liquidity provided that will enable us to just smooth out that process and accelerated. So especially as we exit 2024, I think we’re going to have an upside surprise on the pace of development in the biogas business.
Dave Storms: Understood. That’s very helpful. And then just as a follow-up on that, as you’re bringing on this next cohort of areas beyond 2018, how do you prioritize construction? Is it the Cow Equivalents that the dairy would have? Is it contingent on permits? Is it distance from either existing or future pipelines? Just how do you think about that?
Andy Foster: Good question. Thank you. So, I think obviously we want to maximize the distance — the proximity to the pipeline because obviously we’re making a pretty significant investment there. Some of this has to do with, as Eric mentioned, the USDA funding and the various vehicles that we’re using to fund them in terms of how the timing works out because you sort of lump these into five or six dairies into a specific, we call it AB1, AB2, AB3 and it’s sort of — so that creates some of the timing and it doesn’t always necessarily make sense if you look at a map, unfortunately. If they were crisp, we would do it the most efficient way we possibly can. The good news is these dairies are all generally located in a very close proximity to one another.
