New Fortress Energy Inc. (NASDAQ:NFE) Q4 2024 Earnings Call Transcript

New Fortress Energy Inc. (NASDAQ:NFE) Q4 2024 Earnings Call Transcript March 3, 2025

New Fortress Energy Inc. beats earnings expectations. Reported EPS is $0.13, expectations were $0.06.

Operator: Good day, and welcome to the New Fortress Energy Inc. Fourth Quarter 2024 Earnings Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Matthew Reinhard, Managing Director, for introductory remarks. Please go ahead.

Matthew Reinhard: Thank you, and good afternoon, everyone. Thank you for joining today’s conference call where we will discuss our fourth quarter and full year 2024 results. This call is being recorded and will be available by replay on the investors section of our website under the subheading Events and Presentations. In the same location, you will find a presentation that we will walk through on today’s call. Please review this as it includes important information on forward-looking statements and non-GAAP measures. With that, I’ll turn it over to our Chairman and CEO, Wesley Edens.

Wesley Edens: Alright. Great, Matthew. Thanks, everyone, for dialing in. So let’s just jump into it here and start with the presentation that we sent out. Starting on page number three, quarterly financial results and annual financial results. So very, very good quarter, concluding a very, very good year. $313 million in EBITDA for the quarter. That’s roughly a 50% increase over the guidance that we had previously provided, so it was a big beat for that. Very positive outlook for 2025 and beyond. We are confirming our guidance for $1 billion for this year in total. So by the numbers, a very, very good report. The profile of the business that we run is tremendous. You know, we’re an integrated gas-to-power company. We have five countries, seven terminals, manage or own nearly ten gigawatts of power.

So a very, very significant portfolio. It’s a capital-intensive business to build, which is the bad news. But once it is created, as it largely is now, it has massive competitive barriers to entry. So sustainable competitive advantage is the term that we use. And, basically, where we are right now is that we think by just focusing on our current markets, we feel that we have an opportunity in the next two years to grow EBITDA by 50% or more. So huge numbers, I know, but that’s how big these markets are and how big the opportunities are if we execute on them. Growth with very little in the way of CapEx, and reduce then the debt of our the amount of our debt outstanding and the cost of it dramatically. Those are the goals that we have. There’s tremendous work by our people this last year and over the first couple months of this year.

Tremendous work, actually. And I want to give a big thank you to all of them. We’re very excited for what we have accomplished thus far this year, and we think that there’s great things ahead. So with that, let’s turn to page number four. A little bit more detail on financial update. So, basically, here’s the $314 million and the $950 million. What is crystal clear is that the FLNG asset coming online was the star of the show for us, the star of the quarter, and contributing significantly to earnings now and also in the future. The volumes that are created there allowed us to optimize the portfolio and make significant returns, and the positions continue to do so in the quarters ahead. So two areas of focus for us are long-term growth in the core markets, number one, and number two are asset sales and deleveraging.

So a little bit of the detail in terms of the business. Page number five, capital markets update. In the last, you know, six months or so, we have done a ton of different capital markets activities to all to strengthen the balance sheet, increase liquidity, and set ourselves up well for future growth. October, we raised $409 million in new equity, including $50 million of my own equity. In November, we extended the $900 million revolver to October of 2027. We issued the $2.7 billion bond that basically consolidated debt and extended its maturity out to 2029. And then in March, as recently as today, it’s been a very busy period at the start of the year, we closed the $425 million term loan B upsize, and we refinanced our corporate facility in Brazil, which was $200 million, increased that to $350 million, total of $4.775 billion in corporate transactions, and it’s put us up in a terrific place in terms of our balance sheet and liquidity to now execute what our plans are.

The goal is very simple. We want to deleverage, we want to simplify the capital structure, and we want to reduce debt cost. All of which are well in hand. Let’s turn now to page number six. Gas supply update, as I said, FLNG entering service was a big catalyst for us. And as a result, we have excess supply versus our current base demand. The significant incremental demand that we see in our core markets will definitely come over the next couple of years. But this now this surplus then leads to the next question. Do we wait and sell excess cargoes over time until demand comes online or do we hedge and sell today to capture excess spread? You look at the chart on the right-hand side, the blue line represents the price of TTF as it goes forward.

So you can see that it goes down fairly substantially over the last the next couple of years then flattens out as people expect more and more gas to come onto the market. The yellow box represents the amount of gas or profitability that we have above our base return. So the base return to the bottom, that’s if we sell to our customers down line with the returns that we generate. Yellow is the amount above that. And so the question is, do we hedge or sell some of this, or do we just let it all ride? I think in particular with the geopolitical time that we live in, in particular, the prospects for some kind of a resolution in the Ukraine Russian war, we think that that alone would have a profound impact on the market. And if we did nothing and simply waited for the events to transpire, the yellow box could get bigger, it could get actually quite a bit smaller.

And so the answer, what we did in our judgment was to derisk, sell a portion of it, keep significant upside if the market stays elevated or goes higher. But if the market falls, we’re insulated puts cash on balance sheet. Conservative approach by us that we felt was struck the right balance. It’s good for our earnings. It’s good for our cash flow. It was the right decision to make. We still retain a lot of optionality. So a very, very good result. With our FLNG volume. Number seven. I’m just gonna breeze on these because we’re gonna talk about them in some detail. Chris is gonna talk about our fast LNG. Assets. I’ll spend some time talking about Puerto Rico, have our senior management, Leandro Acuna and Jeremy Dawson on the phone to talk about Brazil.

Lots of tremendous commercial activity, greatest opportunities for us exist in our biggest markets. There’s a lot that we have to talk about that we’re looking forward to. Chris?

Christopher Guinta: Hey. Thanks, Wes. Really appreciate it. So as Wes mentioned, we’re pleased to report that our FLNG one asset is performing above nameplate capacity, demonstrating the exceptional dedication expertise of our operators. Since achieving first gas in late July, we successfully navigated several planned outages taking advantage of these windows to implement key process optimizations. These proactive measures have allowed us to maximize uptime enhance production efficiency, and ensure the asset is operating in optimal conditions. Notably, our highest production milestone was achieved in January, we reached approximately 120% of nameplate capacity at testament to the team’s commitment to operational excellence. To date, we shipped twelve cargoes totaling approximately 24 TBtu.

In parallel, we’ve taken significant steps to lower other operating costs including improving procurement strategies, renegotiating service contracts, and consolidating third-party vendor support. Additionally, we’ve made tremendous progress in our commitment to the local community by increasing the proportion of local operators to approximately 50%. We anticipate this figure will rise to 80% Mexican workforce over the course of 2025, reinforcing our long-term investment in the region. Another key initiative underway is the direct sourcing of molecules from the Agua Dulce hub. Which is expected to yield annual savings of $15 million to $30 million in to further optimize our supply chain. On the accounting front, due to the asset’s exceptional performance, and its ability to consistently produce, we officially placed the asset into service as of December 31, 2024.

This milestone marks a significant step in the life cycle of FLNG one and positioned us for continued success in the year ahead. Flipping to slide number ten. Investors have heard us talk about the incredible facility onshore at Altamira before. As a quick reminder, it was built in the mid-2000s by Shell and is an ideal facility to turn from an import terminal to an export terminal. The infrastructure includes deepwater birthing access, direct including direct access to the open waters in the Gulf of America or Gulf of Mexico thousand cubic meter tanks that are operational and cold now, access to pipeline gas and power infrastructure, and an incredibly protected operational location with only one named hurricane in the last ninety years that has hit the facility, and it was only a category one.

A comment on the FLNG project generally as this is a materially different construction project as compared with FLNG one. On FLNG one, we started construction and engineering at the same time. We didn’t initially have a chosen deployment location, so it team had to engineer for any conceivable seat condition as well as multiple gas composition scenarios. The FLNG one asset was also taken offshore too early in the development of the project and manpower constraints and weather conditions impacted the schedule materially. Contrast all of these FLNG one challenges with the FLNG two project and the differences are stark. We’re now able to build something that is already designed, engineered, in the case of the modules, we have as built drawings All of this making the construction must be much easier to know and to price is what we’ve done with our construction partners.

On the next slide, we’ve outlined the current expected timeline for the completion of the FLNG two asset. Started engineering and procurement in Q2 of 2023 using FLNG one as a basis for design of the modules and the Altame Air terminal as the deployment location. We signed a gas supply and partnership agreement for the onshore facility with the CFE in January of 2024 and started module construction We currently expect onshore construction to commence this summer and are working closely with the CFE on that process and provide additional updates as permits are received. The last eighteen months, we spent about $625 million with the bulk of that being on a hundred and sixty expected to be spent in 2025 and the remainder to be spent in 2026 or 2027.

Given that we built the modules given given that the modules that we built for FLNG one are the exact same for FLNG two, we were able to ship shift risk to the construction contractor and get price and schedule certainty. As a result of and as of February 1, 2025, were over 50% complete on the modules, and the majority of the large pieces of kit are either already at the queue at yard or ready to be shipped needed. With that, turn it back over to Wes for Puerto Rico.

Wesley Edens: Great. Thanks, Chris. So let’s flip to the following page, page number thirteen. Here’s a map of Puerto Rico with a bunch of dots on it. The dots represent power plants in different facilities. There’s the NFP facilities. There are current power plants. There are power plants that are targets for fuel switch. There’s new builds and peakers and other narrow sites, so lots of dots on the map. Just a little bit of context to where we are. So today, we have two contracts. One where we provide gas to the yellow dot, which is our San Juan, LNG facility, where we provide gas to the San Juan five and six power plant that runs through March of 2026. Two is we we have a a gas contract on the two plants we built for the Army Corps that are adjacent, one right there in the yard, the other five miles down the road.

The two of those together total about fifty TBtu’s of production, so about one ton of LNG. The conversions, which I’ll talk about in just a second, represent a massive massive opportunity for us. To basically take fuel ready assets that currently burn diesel, switch them to natural gas, save hundreds of millions, billions of dollars over the years in time, for the Puerto Ricans and actually generate a significant amount of business for us. That is between fifty and a hundred TBTUs in total demand. Lastly, the new build business is also very significant. They announced their first new build power plant in twenty five years in January, are gonna be providing the the gas for that when it comes online in 2028. We estimate that the total need for new power will generate between a hundred and fifty and two hundred TBTUs in total volume, If you add that all up, you take the fifty that we have now, it grows to between two hundred and fifty to three hundred and fifty in total.

So truly, we’re a fraction today of where we believe the market on this can be. Potentially the biggest gas to power market opportunity in the world. There’s nobody who’s in a better position to access this and perform on behalf of Puerto Rico than we are. So let’s just flip the page real quickly. Page fourteen, these are the photos you’ve seen many times. The left hand side is the San Juan five and six. That orange boat is a boat that we have leased sits in front of our facility. The right hand side, there are two other contracts or or assets in the island wide contract. It is a eighty TBtu contract. We use about half of that little less than half of it today, and that contract expired on March fifteenth. We just extended it this weekend for one more year.

I’ll talk about that in just a second. Page fifteen, the opportunity to convert, is the earliest and easiest short term win for Puerto Rico. And for us to help them with. So there are four plans that we show here. They are currently burning diesel. Nine hundred and twenty five megawatts, they’re actually used significantly, and so the the cost savings would be five dollars, and today’s price is roughly between what they pay for diesel and what they would pay for natural gas, these are a high priority. The government has made it a high priority. We are very aligned with them on that. This alone would double the size of our portfolio. In, say, Puerto Rico, two hundred fifty to five hundred million dollars a year. So, it’s a win win on both sides and something that we are very, very focused on in the short term.

Number sixteen long term, it’s all about new power. So a little bit of context. Average power plant in in Puerto Rico built nineteen eighty one. Fifty percent of the power plants built in nineteen seventy five and before. Desperate for more reliable, less expensive power. That’s the situation. First new plant that they have announced to be built in twenty five years is the the one that is shown here schematically. Was originally scheduled to be a four hundred and seventy eight megawatt power plant. They’ve upsized it to be five hundred and fifty megawatts. We are the gas provider to that project, so twenty years at roughly thirty TBTUs. At today’s margins, that’s roughly a hundred and twenty million dollars of margin for twenty years with essentially no CapEx. This is the this is the benefit of having spent all the capital in this capital intensive business, established the beachhead, and now we’re able to service customers efficiently.

Of course, it generates a tremendous amount of margin for us. Page number seventeen. Yesterday, we announced one year extension of the ATBTU contract. This is the island wide contract that allows them to grow gas use from currently forty TBTUs to roughly eighty is the maximum over the next year. We think that the bulk of that can be taken up by the the temp power growth. We’ve already saved Puerto Rico five hundred million dollars in fuel savings on the San Juan five and six. We think by converting more power plants and burning more gas, in this manner is the fastest way to more savings for Puerto Rico. Let’s talk about page number eighteen. Because we announced this late last night. And this is the the change in the o and m agreement that exists between Henera, which is our wholly owned subsidiary that manages the PREPA plants, exchange for a hundred and ten million dollar payment.

The the HNIER contract itself is actually quite simple. We could pay the base fee of twenty two and a half million dollars. We had a hundred million dollar incentive that, basically, we got paid fifty percent of the cost savings that were generated either by operations or from fuel savings. We earned a hundred and ten million dollars the course of of that first year of the contract. We billed them as initially in July and have billed them a number of times ever since then. They wanted to convert and grow gas and utilize, you know, more of our business down there, but they became, as the government, very fixated on the incentive structure, and we said, after a lot of consultation with them, fine. I mean, the government basically at the heart of it, the government basically didn’t feel comfortable with the structure of having us sell them gas and also charge them incentive fee.

Though this is clearly the contract and the incentives from day one, so we after, again, a lot of consultation with them, we said, you know what? Let’s try and understand what it is, you’re focused on try and come up with what we’re focused on and find a compromise that works for both of us. We have two goals. One, we’re owed a hundred and ten million dollars, and we want to get paid. As we’re as we’re just the owed. Two, we wanted to grow our supply of gas, and by doing so, a, make more money because we’re trying to generate more revenues and b, a more productive business. And be, save them billions of dollars in fuel savings. So we decided on this compromise. They pay us a hundred million ten million dollars We agreed to eliminate the incentives, Together, we then try to take the island off of diesel and fuel oil save them potentially billions, and generate far more for us than the incentive structure would have in a manner that that they feel that they are aligned with us.

So it’s very much of a win win. With that, let me turn it over to Leandro Acuna and Jeremy Dawson to talk briefly about our Brazil operation. Fellas?

Leandro Acuna: Thank you very much, Wes. Good afternoon, everyone. My name is Leandro Acuna, and I’m pleased to be presenting the New Fortress Energy Inc. Brazil session alongside my partner in Brazil, Jeremy Dawson. Starting on slide number twenty, I want to take this opportunity to highlight the incredible achievements New Fortress Energy Inc. has made in Brazil over the past almost four years now since the acquisition of Hygo. During this time, we have made significant investments laying the groundwork for a successful business prepared to deliver substantial and sustainable value to our shareholders. This slide showcases the impressive assets that we built in Brazil. We now operate two LNG terminals with a supply capacity of approximately two hundred terabytes used per year each terminal.

Our Barcarena terminal the one you can see in the north of Brazil in a region with no access to pipelines is already operating to serve one key customer the Norsk Hydro Aluminum Refinery. Soon, the terminal will also serve two of our own power plants under construction in that region. Totally an impressive two point two gigawatts of installed capacity. Furthermore, our Santa Catarina terminal, South Brazil, a terminal that is connected to the same pipeline, use it by Brazil to import gas from Bolivia. Is fully commissioned and ready to play a major role in the upcoming 2025 capacity auction in Brazil. Which is scheduled, by the way, to happen in June 2025. The auction is an amazing opportunity for New Fortress Energy Inc. And with our terminal, we could not only secure long-term power purchase agreements, for our own projects, but also provide gas in internal services for two existing power plants in the region.

We believe most of the south terminal capacity will be contracted after the auction, reinforcing our position as a key player in Brazil’s energy landscape. I will provide more details on the auction opportunity in the following slides. Now let’s move to slide number twenty-one, please. And continuing with an overview of our business, I want to emphasize the strong foundation we’ve built in Brazil through our existing contract. In addition to the Alunorte long-term supply agreement that I mentioned it for we have secured over two point two gigawatts with long-term power purchase agreements contracted for more than fifteen years with inflation-adjusted PPAs. This ensures a stable and predictable revenue stream for New Fortress Energy Inc. in the long run.

It’s also important for to highlight that New Fortress Energy Inc. has no commodity index risk in any of those existing contracts. Both Alunorte and just say, and the power plant PPAs, they do have a pass-through for the commodity price. With those contracts, as far as I’m concerned, the Barcarena terminal is the only terminal in Brazil almost a hundred percent of its capacity long-term contracted. It’s still on existing contracts, on the funding side. We have already secured all necessary equity funding which was already injected into the project. And on the debt front, the long-term financing was already secured and disbursed. This demonstrates our diligence and commitment to these projects, which are fully funded until their completion. And looking ahead, we are focused on near-term growth opportunities and we believe that that the upcoming Brazilian capacity auction could represent a great second wave of growth for New Fortress Energy Inc.

in Brazil. The market is expecting a big auction that will contract over a ten gigawatts of capacity. This auction represents a the potential for higher margins for New Fortress Energy Inc. in the south terminal and requires minimal additional capital investment. As we have already built the necessary foundation for the of our request file. I would also like to highlight that New Fortress Energy Inc. Rash It’s over two gigawatts of its own capacity to participate in the next auction and has many players requesting gas supply for our terminal, which, again, elevates our confidence that after the auction, in June, a material part of the TGS terminal will have long-term contracts, meaning, New Fortress Energy Inc. could potentially double its size in Brazil.

Moving to slide number twenty-two, I’m gonna give you guys an overview about the auction. So first of all, this slide highlights the strategic advantage of our TGS terminal’s location It’s ideally positioned to serve part of the anticipated demand from the upcoming auction supply not only greenfield projects, but also existing assets in a region that currently lack access to flexible and reliable gas. If you move to slide number twenty-three, please, As I mentioned it, we see a significant growth potential in the power auction scheduled for June. As I also said, this auction is at expected to award between ten to fifteen gigawatts of new and existing power projects. The PPA is awarded in this auction will commence its operation between twenty-five and 2030, and the PPA term will be from ten years for our existing power plants to fifteen years for new plants.

Those contracts, they will be very similar to the one that we own in Barcarena, the one point six gigawatts power plants. Where the system would pay a capacity fee for the power project and an energy fee whenever the project is called to produce power. The energy fee of those contracts can be linked to international indexes, including spot indices like JKM, the TTS. As as I mentioned it before, and if you already registered two gigawatts of our own projects for this auction and have you received a request from third parties to supply gas to an additional three gigawatts of projects. Our our plan is to dedicate part of the terminal capacity to supply existing projects, supplying gas, and terminal services, aiming for revenues stream already starting as early as of September 2025.

And utilizing parts of the terminal to supply new projects. Including New Fortress Energy Inc.’s, of course, targeting commercial operation dates between 2028 and 2030. It’s important to highlight again that we can capture substantial growth with very little CapEx and equity needs. At this stage, we have no overbooking of opportunities for our terminal, and we will need to select the best project to support our growth in Brazil until the auction date. This strong demand underscore the value of our integrated LNG and power capabilities. And New Fortress Energy Inc. right now in Brazil is only one of the few players that is able Good. Provide these capabilities. We are confident that New Fortress Energy Inc. will secure significant share of the awarded capacity in the auction further reinforcing our position as a leading energy provider in Brazil.

This growth will generate substantial value, I’m sure, for our shareholders and contribute to Brazil’s energy security and economic development. I will now hand it over to Jeremy Dawson, who will give you an updates on construction.

Jeremy Dawson: Thank you, Leandro, and good afternoon, everybody. My name is Jeremy Dawson. I’m responsible for building and operating the Brazilian assets. I’d like to start. I just have a couple of slides. I’m on slide twenty-four. But I would like to start just with the bottom line upfront. The good news, we’re on schedule. In one case, we’re ahead of schedule with construction. We’re also on budget. So this is an excellent outcome for the company. And we’ve done a good job in terms of contracting and and being able to eliminate any CapEx leakage and also been able to back to back any regulatory or delay risk we have to the parties most capable of managing that risk, which is the construction consortiums themselves. If I could have you and draw your attention to the map on the right side of the slide, I’d like to point out this nice geographical cluster of assets that we have coming together.

You can see the Alunorte, Norsk Hydro Aluminum Refinery right in the middle of the photo. And then just down into the left, both of our power plant locations I’ll talk about those in just a second. But this is a profitable cluster of assets that will be delivered in into next summer. And we will then be able to conclude our CapEx cycle in the Barcarena cluster. This cluster of assets is going to is going to have a a demand of approximately sixty TBTUs per year. With potential for upsizing that as the power plants dispatch increases. In years of poor hydrology in Brazil, which are becoming more frequent. I’d like to start with the Norsk Hydro contract. This is a thirty TBtu per annum contract, which we started servicing in March of 2024. It’s got a fifteen year tenure with a very creditworthy counterparty in Norsk.

That contract, and our current volumes on a month on a daily basis, we’re currently supplying approximately seventy-four million cubic feet per day. Of gas to that facility. Have two power projects, which you’ve heard about before. I’ll give you an update on them. They’re although they’re they’re they’re both power plants, of course, they’re quite different. The Selva power plant is a combined cycle power plant, which basically means it it captures the waste heat generated by the turbine combustion and passes that through a water and steam cycle to it to increase power plant efficiency and output by about fifty percent. Compared to a simple cycle project. That’s a very important process for a power plant that’s expected to dispatch any significant annual basis, which this plant does.

The power plant is a six hundred and thirty megawatt power plant using Mitsubishi technology. It is eighty-eight percent complete. Has a twenty-five year PPA. With all of the terms that Leandro mentioned before. In terms of commodity risk pass-through, and also inflation adjusted. The COD or the commercial operation date of this asset will occur in the second half of of this year. The Porto de Sergipe asset is quite different. This is a simple cycle. Project. Which is generally used when you have any kind of sort of fast start peak support application. Is the nature of this asset. It’s a one point six gigawatt power plant, which is expected to dispatch less than than Selva. But is at thirty-nine percent complete, has a fifteen year PPA, and the COD will be the following summer.

If I could have you go to now slide twenty-five, please. I wanna get into a little bit more detail on these these assets. And talk about the construction specifically of each one. As I did mention, Selva two is the six hundred and thirty megawatt plant. And being combined cycle, it’s a bit more complex in terms of the engineering and and the erection phase of this project. So we chose an engineering heavy consortium. Chose a consortium a Japanese consortium of Toyo Engineering with Mitsubishi as the equipment supplier. And have been able to secure lump sum turnkey contracts which place the risk of schedule and cost overruns firmly on the consortium. And also aligns our goals in terms of project completion on time and on budget. The project is eighty-eight percent complete.

As I said, we’ve already started cold commissioning. Just this week, we had a very important milestone for the project. Especially for a combined cycle project. We we were able to introduce water onto the site into the water treatment plant, which allows us to start commissioning the water and steam cycle. This project, as I said, will provide firm power dispatch annually during the second semester of every year. And the cash flows for this project will commence in the second half of 2025. You can see a few photos there on the right. Porto de Sergipe, we have a different consortium makeup, primarily because of the different nature of the projects. A simple cycle project is much more civil construction focused rather than the complex erection and construction activities that are related to a combined cycle.

So we chose a local contractor that is very experienced and has a very good track record in Brazil and is very experienced with the civil construction part of of the scope. They’re also partnered with Mitsubishi on a joint and several basis. In one in our strong lump sum turnkey contracts. Project is thirty-nine percent complete compared to a planned at this stage, completion of thirty-one percent. So we’re we’re we’re quite pleased to be quite significantly ahead of schedule. This is, as I said before, a standby asset. It is a it is a capacity contract where we earn very healthy capacity payments. In exchange for being ready to be online. Immediately upon being notified by the system operator. The capacity revenues of this contract will commence in the second half of 2026, as I said before.

I wanted to point out one interesting or two interesting photos on Porto de Sergipe, which highlights sort of the challenges that that are inherent in constructing in a very remote and rainy area of the world. In this case, we’re building in the Amazon. You can see in the first photo on the bottom left, that we have a very large tent erected over the site. That tent is almost sixty feet high and and over three hundred feet long. It essentially is covering an area of the work of the site where we’re gonna do a lot of civil work and installation of balance of plant equipment. During the rainy season. So, essentially, we created a a dome so that we could opt continue construction without any interference from the the the weather that is going on right now as we’re in the rainy season.

Then you see a photo of one of the gas turbines that is currently en route to the site. That is a Mitsubishi five zero one j a c, advanced air cooled design gas turbine. It’s state of the art. It is one of the largest turbines available in the world with a ISO output rating of about of over four hundred megawatts. It is it is one of the five of these turbines that we own as New Fortress Energy Inc. We’re the second largest fleet owner second largest customer of Mitsubishi power in the world. When it comes to advanced class gas turbines. This this gas turbine is being loaded in this photo at the Savannah, Georgia port after departing Mitsubishi’s manufacturing facilities in the United States. They’re two of them are currently in route to to to our project right now.

They’ll arrive in about four to five weeks. And the other two will arrive a few months after that. With that, I’ll turn it over to Chris for the financials update. Thank you.

Christopher Guinta: Super. Thanks, Jeremy. Let’s turn to the next section. I’ll walk through a little more detail on both the financial results for the quarter and year 2024 as well as an update on cash flow and liquidity. So turning to slide twenty-seven, we’ve included some comments on financing activities both past and present. As you’re all familiar, in Q4 2024, the company completed a series of refinancing transactions where we exchanged $875 million of 2025 notes, $1 billion of 2026 notes, $500 million of 2029 notes into a new $2.7 billion 2029 tranche that included about $300 million of new cash proceeds to the balance sheet. As part of that transaction, we agreed to an amendment with our revolving credit facility lenders to extend $900 million of the $1 billion revolver into October 2027.

In addition, we issued $400 million of primary equity equity anchored by an additional personal investment from our CEO. And Friday, we priced, and today we’re closing the upsize of our term loan B facility where we raised $425 million associated with this, we terminated commitments under the term loan A facility in the amount of $350 million. This transaction puts incremental cash on balance sheet, which we used to fund the FLNG two CapEx program. This refinancing was a natural progression of terming out replacing relationship capital from select members of our supportive bank group within institutional investors that are better situated to have long-term funded loans in place. The 2025 asset sales processes are well underway, and it’s best talked about earlier, we expect to generate $2 billion net proceeds after fees and any asset level debt payoffs can be used to further pay down corporate debt.

Specifically, we will be using eligible proceeds from asset sales to retire the 2026 notes or we could do a refinancing to extend them. But in any event, that is a near-term focus for us. Longer term, we think the right capital structure would be to take out the terminal B and the remainder of the terminal A, the long-term asset level financing secured by the FLNG units as well as long-term offtake agreement. We think that this combination of de-levering well as extending maturities is in the best interest of debt and equity holders alike. My final comment here is that while we have seen some downgrades to our corporate debt ratings, we would expect that these steps, once completed, will result in positive improvements to our corporate debt profile which we expect will lead to upgrades.

Flipping to slide twenty-eight, The takeaway from this page is that as a result of the refinancing transactions, and equity capital raise we completed in Q4 as well as the monetizing the portion of our supply that we were long, you can see the company has ample liquidity to service debt and to pay committed CapEx. On the left side of the page, we have a cash flow walk that we’ve included in prior presentations. It Embedded in this, we’ve updated the 2025 estimated adjusted EBITDA to be $1 billion as Wes described already this afternoon. On CapEx, this now includes the cost associated with FLNG two as we have that cash on balance it continues to exclude the Brazil power plant CapEx, which is fully funded through either restricted cash on the balance sheet committed financing facilities.

For debt service, this this includes the increased costs associated with refinancing, but assumes that we pay off $2 billion of debt coming from asset sale proceeds. An important note here is that the way the debt documents work, a minimum of 75% of any asset sale proceeds in excess of $50 million go to pay off debt. The company does have discretion in keeping a portion of the cash on the balance sheet But for this exercise and consistent with what we’ve said publicly, we’re assuming we use all of the proceeds to delever. And again, to keep it simple, this assumes a pay down pro rata to the 2029 notes, the RCF, and the term loans. We’ve excluded the portion of adjusted EBITDA that represents earnings that are generated from Charter to third parties, and we’ve excluded the portion of Ship Charter Hire since running through interest expense.

This results in cash flow use of $200 million for fiscal year 2025. On the right side of the page, we show beginning of the year unrestricted cash balance $493 million. Then add to that the proceeds from the term loan B and Luminess financing that have just closed, which is $490 million. You have the negative $200 million of funds of cash flow from the left side of the page, and finally, our expectation of the FEMA claim which after taxes and debt repayment suite yields cash inflows of $405 million. All of this results in an end of year cash balance projection in excess of $1.2 billion. Turn forward to slide twenty-nine, and we have the financial results. Total segment operating margin was $240 million for Q4, and just under $1.1 billion for fiscal year 2024.

For Q4, this is $206 million from sales to customers through our downstream terminals and cargoes that were sold to the market which is about 85% of the revenue for the quarter. Similar percentage exists for the full year 2024, which is $950 million for the year or 88% total segment operating margin. In Q4, we had $34 million of operating margin from the ships, which contributed to $137 million for the full year. Core SG and A for the third quarter was $34 million, which is up slightly from Q3 largely due to the professional fees incurred around the refinancing transactions. For 2025, we’re forecasting $30 million per quarter or $120 million for a year. The deferred earnings line was $108 million in the fourth quarter and is nil for the fiscal year 2024.

This represents previously contemplated cargo sales that were included in segment revenue in Q2 and Q3, but they were not recognized in EBITDA until Q4. As a result of all of this and the punch line adjusted EBITDA for the third quarter $313 million or $950 million for the full year of 2024. Moving on to slide thirty. For Q4, $242 million of net loss for GAAP or loss of $1.11 per share for fiscal year 2024, $270 million of a net loss or $1.25 a share. But importantly, the majority of the Q4 result is a $235 million of charges related to the extinguishment of debt. $225 million of that was noncash and it’s largely driven by the equity issuance associated with the new 2029 notes, which was issued as part of the refinancing. If you adjust that and other nonrecurring items out, we would result in $29 million of net income for Q4 or $0.13 a share.

$101 million net income for the full year 2024 or $0.46 a share. Finally, funds from operation for the fourth quarter, $68 million, and for the fiscal year $163 million. Now that we shared the high-level earnings for Q4 and fiscal year 2024, I want to expand just a little more on the financing financial statement impact of the press release out this morning. Regarding the termination of the fuel incentives of PREPA. In prior quarters, notably Q2 and Q3 2024, we previously recognized $58 million associated with the fuel savings under our Henera incentive contract with PREPA. However, given that we are changing this incentive contract, we are having to reverse that revenue. So we recognized $33 million in fuel savings during Q2, $25 million in fuel savings during Q3, and we had been intending to recognize another $25 million in Q4.

So we were previously projecting an additional $83 million in EBITDA for fiscal year 2024 that will be excluded and deferred over future periods, but the cash is in hand. Now given this has been a chain this has been changing daily over the past week, we need a couple of extra days to ensure appropriate presentation and disclosures in the 10-K. So as a result, we will be filing a notification of late filing under rule 12b-25 with the SEC. It is important to note though that the income statement and adjusted EBITDA numbers included in our earnings release are reflective of the final PREPA deal. We do not any expect any material changes to these results released and furnished within the earnings 8-K filed with the SEC today. Further, it is our expectation that we will file the 10-K before the end of the week.

With that, I’ll turn the call back over to Wes for some additional updates.

Wesley Edens: Great. Just a couple brief updates, and then we’ll and we’ll go to questions. So the three most frequently asked questions, I thought I would actually say it to the end. So questions about the asset sales, we’ve said this This is all public information. You know, we are very focused on deleveraging the Deleveraging can happen from one of two ways. It can happen the old-fashioned way by making more money than you spend and using that to pay down debt. Which, of course, we intend to do, and that’ll become a bigger and bigger factor for us as we move forward. Number two, though, you can sell assets at accretive values and use those proceeds to pay down debt. The first asset that we are focused on is Jamaica. So Jamaica is a the country where we went first, so it’s our oldest and most developed market.

Just to buy, by review, it’s about a thirty TBtu downstream market. We generate about $125 million in EBITDA. Virtually, all of that is cash flow because that’s what happens in these businesses over time is that once they’re up and running, there’s very little CapEx to run them. It’s an extremely attractive profile of assets. It’s got you know, twenty plus years of downstream demand contractually. Got twenty plus years of gas supply. A hundred percent of the of the assets are US dollar based. It’s never suffered a dollar of credit loss in its entire history. So it is a phenomenal asset. It had it’s in a very, very good market. And we have phenomenal people that actually we’re lucky to work with down there. So not surprisingly, it’s been a very sought after asset.

We had started this process back in the fourth quarter, whereas we’re now in a kind of a final process with a handful of different folks. And although it’s always hard to predict the exact timing for this, if you like, the outcome thus far has been very positive, and then we’ll kinda go on from there. So it’s the asset sale update. FEMA, my favorite four-letter word, has been a has been a very, very productive, you know, period of time for us, FEMA. Way that it works just administratively is that you have you know, we contracted with a prime contractor. Who then in turn contracts with the Army Corps that then in turn that money is paid by FEMA. FEMA obviously is the is the disaster relief, you know, providers. They play a massive role in all seriousness, both in in a place like Puerto Rico, but also in the wildfires out west in every place else.

So it’s a critical critical role that we value and deeply respect. We have had the most, kinda, comprehensive in-person interactions with the Army Corps folks. I think that there’s a great amount of understanding that we have accomplished in terms of them explain us explain to them what the nature is of our business and exactly how we provide a gas to this and all the different aspects of the contract. And we’ve learned a lot about from them in terms of how they think about the process and whatnot. It’s an interactive process that does not have a definitive date right now, but I can say that the level of respect and interaction across the board between us and between them and between FEMA is at an all-time high for sure, and we feel very good about the constructiveness of it.

Lastly, Klondike is our effort to provide power to data center developments. That asset the first asset that we have that is in our portfolio is in Pennsylvania. We filed in early January to get building permits and air permits for the power plant that we would build there. We expect to get those sometime in the middle of this year. And we are hopeful that later this year, we’ll have good news with respect to the consummation of construction and marketing with it. So those are the three updates. Last thing I would say is just, you know, when you look at the quarter and the year in total, it’s been obviously a heck of a period. Q4, $313 million in EBITDA. The year, $950 million in EBITDA. Our guidance for next year is $1 billion, which is what we’re just reaffirming what we said before.

Our two biggest markets are the ones that have biggest opportunities. You know, Brazil, that first power plant we we expect to turn on in the second half of the year and produce cash flow for us. The power auctions as we, Leandro, went through, are upcoming. They could be, you know, significant as for us. We’re incredibly well positioned in that market in both the North and and most importantly in the south. You know, Puerto Rico, perhaps the biggest gas to power opportunity in the world. We are the sole provider of gas in San Juan. We’re eighty percent of the people live in that geographic area. So we feel like we’re incredibly well positioned. Capital structure wise, $4.775 billion later, it’s been a very, very busy and productive year for us.

The balance sheet is in much better shape than it was at the beginning of it. We have excellent liquidity as Chris went through. We are poised to deleverage simplify, and grow the business. And those are the the the perspectives that we have. So with that, I will take a pause and we’ll open it up to questions. Thank you very much.

Q&A Session

Operator: Thank you. And if you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. And we’ll take our first question from Benjamin Nolan with Stifel.

Benjamin Nolan: Yeah. Thanks. I appreciate you taking my questions. So I the first I wanted to start if we could, on slide number six where you talked about your effective open position Can you maybe help me quantify that a little bit? You’ve just between what you’re buying and producing a hundred and seventy TBTUs of annual supply, how much of that is available? And and then you talk about a portion of it has been fixed. Can you maybe put a little context on the the spread that you have locked in for? Yeah.

Wesley Edens: Yeah. The majority of our position, the vast majority of it is either sold or destined for a downstream customer or hedged. So our actual long position would show up as something slightly more than that then. But, basically, the decision that we made, as I said, was to derisk the portfolio you know, with really the, you know, the caveat being that we think that there is a lot of volatility potentially ahead, and to the extent that there was, we didn’t want to let the yellow box about evaporate. And so our goal is not to be exposed to, at this point, either increases in TTF that actually then somehow hurt us because we’re Sure. Or decrease in the TTF and somehow erode it as the profits that we already had in the balance sheet.

And so we thought that actually the conservative approach was the right one, and that’s why we hedged it up. Obviously, when the FLNG two comes into the portfolio here in, the first part of 2027, will be incremental volumes. Those are those are volumes that we are already talking to people that are interested in in buying them, so it’s a good position to be in. So that would be a technically, a long position, but it’s not yet something that is deliverable about it. But the on on the balance sheet deliverable positions, we are essentially neutral. So we have either as I said, we’ve either sold committed discreetly, or we have hedged them to to so that we are actually insulated from price moves.

Benjamin Nolan: Okay. And then and then I for my next question, I know in in conversation that we’ve had in the past, there were a number of cost saving initiatives that you guys were looking to undertake and do that in in Puerto Rico or in Virgin Islands or in Jamaica. Could you maybe give any update on first of all, what those look like? How how how meaningful they would be and and where you are in that process?

Wesley Edens: Yeah. The the I’d say the majority of the cost savings are from the ships and FSRU side of the balance sheet. So we’ve got some FSRUs that have come back to us that are under market we’ve talked about initiatives to try to realize the gap between market and where they’re priced. Those are those are more opportunities on the profit side. On the other side, we’ve got an abundance of shifts. When we started the we increased the portfolio of gas we provided in Puerto Rico. We increased the number of supply ships from two to five. Kinda we’re trying to reduce that from five to two. So and that is well well underway. We spent tremendous amount of time and effort, basically refurbishing and upgrading the berth in Puerto Rico to to be able to take in a bigger ship.

That’ll then simplify that supply chain. That’s what we’re focused on right now. We have a handful of other initiatives that we think are also useful. You know, one of the things that has been really interesting is that as we have, basically built some version of just about every terminal you can imagine, we’ve learned a lot of things. As part of that, we think that there are there are significant opportunities. And pretty much in the shipping business, everything you touch is worth millions of dollars. So if you can reduce or ship or two, or or just use it more efficiently, you can save meaningful amounts of money, and that really is Focus. On the on the people side, obviously, we think There’s always opportunities to continue to grow the business and and whatnot, but we’ve got a great core of people that have worked you know, extremely hard and really effectively.

And so we think there’s less on the labor side but on the ship side of it, we think that there’s definitely meaningful opportunities to do. Some good work.

Benjamin Nolan: Alright. I appreciate it. Thanks, Wes.

Operator: And we’ll take our next question from Christopher Robertson with Deutsche Bank.

Christopher Robertson: Hi. Good afternoon. Thank you for taking my questions. I was gonna ask a bit About the Brazil power option, But, Leandro did a a pretty good job of laying the overview there. So I wanted to ask him a bit more of a specific question about the the two gigawatts that you register of your own power projects Just in terms of where would you source the turbines, how are you thinking about the number of different projects that makes up that two gigawatts and what estimated CapEx might look like for something like that.

Leandro Acuna: Hi, Chris. Thanks for your question. So we we as I said, we brushed straight two gigawatts in projects, and you went straight to the point I mean, the most difficult thing for this auction will be to see turbines availability. And we did it So we have a secured turbines from one of the ONMs that are our partners. So we’re confident that we have terminals available not only for the 2028 COD date, but also for twenty-nine and thirty. The CapEx for those plants and I’m mirroring here what we just did at the Porto de Sergipe, which we hired the full PPC Lamps and turnkey last year. Is around six hundred Bres dollars. I’m sorry. Per kilowatts installed. And those projects, they’re gonna be spread over two different sites.

Initially. Nevertheless, we have many other projects that’s qualified for the auction connected to the same pipeline that we do provide gas, that would also be interested to somehow partner with us So that number until the auction in June could increase a bit.

Christopher Robertson: Okay. Thanks for that, Leandro. I guess as a follow-up, when you guys are talking to potential partners here, that have existing assets and you’re coming in as a potential gas supply, partner. How are those conversations going with the the potential for sharing in some part of fixed capacity payment in addition to you know, the variable dispatch and and the spread on that. Is that part of the conversation, or or what does that Look like.

Leandro Acuna: Yeah. Absolutely, Chris. I mean, we are discussing with about potentially supplying gas to brownfield assets And in the end of the day, what those projects need is a kind of a gas call option. Right? Because their power plants is available to produce power whenever the system needs. So they need to buy gas whenever they’re required to produce power. So it’s a gas call option. And, yes, I mean, in order to buy that gas call option for us, they will need to a premium? For the the the call option, which is our terminal fee. Plus a strike price that it’s gonna be a premium over the the JKM. So, yes, I I would say is that all the players in the country they are already expecting that because we have done contracts before. Charging capacity fees or terminal fees. In a a a high strike price whenever they buy the gas, So all the discussions that we are having there having right now, they are boarding on that direction.

Christopher Robertson: Great. Yeah. That was really helpful, Leandro. Thank you. I’ll I’ll turn it over. Thank you.

Operator: And we’ll take our next question from Sherif Elmaghrabi with BTIG.

Sherif Elmaghrabi: Hey. Thanks for taking my questions. A couple on Puerto Rico. First, as we think about building to that billion dollars of EBITDA guidance, seems like there’s a lot of upside to volumes under the island wide contract. How quickly can some of these older plants switch over to gas?

Wesley Edens: Really, as quickly as they can get regas and And so if you have the regas in stock, which we do, you can actually convert them fairly quickly. The mega gens are actually connected to a regas system now, so they could actually convert at the drop of a hat. The Maguas plant is entirely gas ready. They just simply needs regas that is put in place. It’s basically a regas unit and a buffer tank is is what kinda sits between it. The Campilachi plant same thing. It’s actually a gas ready plant, and a hundred and sixty of the two hundred and forty megawatts, the other asset needs some some technical work. And the Aguirre plant is actually ready today. So the the the the short term opportunity on the conversions is significant.

It really became one of the factors in the discussions we had them. As I said, they were just uncomfortable. Notwithstanding the contract, they were uncomfortable with the notion that we would be selling gas and generating revenues and still uncertain earning an incentive. Even though that’s what the contract called for. And it was an easy decision to sit down with them and say, look. We share objectives, and our objectives are we want us to provide more gas and power to the island, and we wanna save you a lot of money They wanna save money on a go forward basis, and they wanna save on the incentives. And so it’s a very, very simple and easy transaction. There there are few things in life that are truly win wins. This is one of them. So happy to to do our part on that, and we think that the benefits will become manifest quickly because we think that there’s gonna be a significant amount of activity on these initiatives on the on the on the the conversion side.

Sherif Elmaghrabi: That’s that’s helpful color. And then, you know, kinda longer term, how does contract renewal work for the island wide contract? It there a fixed number of extension options or, like, you know, does it does it just roll every March?

Wesley Edens: There there there’s a couple of different extension options, but for the first time, the government really came to us came to me a couple of months ago and said, we would like to run an RFP for a new contract that would have a significantly more duration. Obviously, the the year by year, you know, tenure of it creates know, instability in terms of their energy security, They recognize what a a critical part of the energy sector of the gas is today, only to get more critical as they add more volume into it. And so this is something we talked about having a duration of ten years or fifteen years or even longer. So we know what the the tenure looks like on the new contract that we signed. On the new power plant. That’s a twenty year.

So but I I would expect that there will be something that happens in the not too distant future with no no specific time associated with it right now. And I would expect it would end up being a significantly longer duration, at least on a portion of it, what they have right now.

Sherif Elmaghrabi: Wes, thanks very much for taking my question.

Wesley Edens: Great. Thank you very much.

Operator: Take our next question from Craig Shere with Tuohy Brothers.

Craig Shere: Hi. Thanks for taking the question. On, just continuing on the question about renewing or or extending a longer term, the ADT Btu contract with Islandwide with PREPA. So your initial sales on the island We’re we’re just, like, gas sales, gas margin sales. But but that eighty TBTU is diesel linked. But it won’t be useful in forever. Right? I mean, you may still apply this for twenty years, but go ahead.

Wesley Edens: You know, it it definitely won’t be the the diesel length, ironically, is was our initiative because it was linked to our savings initiative. We wanted to make it crystal clear there was savings, so we linked it to diesel. So you’d say, at seventy-three percent of diesel, you save twenty percent of the money. It’s not that hard. And but it it wasn’t the pricing that they objected to at the end of the day. It was really just this notion of you’re selling us gas. Why are you also being charged as an incentive for it? And that became you know, the heart of the discussion. I think the the new contract that we signed on the new new power plant is Henry Hub based. I think this certainly will be Henry Hub based. When they go to redo it.

It’s not a natural fit. To the the diesel savings that was an artifact from. A different part of a transaction that we were we were trying to do. But, you know, I mean, the the just to put it in perspective, you have again, nine hundred and twenty five megawatts of gas or diesel burning plants today. You probably have, you know, one and a half to two gigawatts of new power needed. Have the peaker plants that are being built right now that are another two hundred and eighty or sixty megawatts or whatever. So there’s a there’s a tremendous amount of of room for this. I mean, we can talk know, with them about converting some of their old steamer plants to burn those boilers to running on gas. So I think that now that we’ve, you know, kind of gotten past this point on the on the incentive part of it, I think it’s kind of a logjam that then opens up.

That’s our bet. It’s a bet based on the fact that I I assume that it people will want to save money and have less emissions. Right? That seems like a very logical outcome. And if they do that, we’ll sell more gas. It’ll be more profitable for us. And so seems like a given in the short run is actually a great opportunity for both of us. That’s the that’s that that’s the win win aspect of it.

Craig Shere: And and and with a conversion from diesel to Henry Hub Plus, you’re confident you still have sufficient LNG availability respectable margins, given selling at the Henry Hub Plus.

Wesley Edens: We we do. We think that the margins are are appropriate and consistent with what they are across the rest of the portfolio. So think it’s a it’s a good good situation. Obviously, the more that you sell, probably the may affect your margin at some level, but you’re on on a total volume basis. As I said, when you add it all up, the gas need quite likely could be two hundred and or three hundred or three hundred and fifty TBtu. So many, many times the size of the fifty TBTUs you currently have. So there’s just there’s a lot of efficiencies in in deploying that much cash. We think there’s a lot of savings for them, billions and billions of dollars of savings, frankly. And for us, it’s obviously could be a huge market.

Craig Shere: Gotcha. And I just wanna confirm real quick. The hundred ten million Panera parent payment is a part of the one billion guided 2025 EBITDA?

Wesley Edens: It is. Great. Thank you. You bet.

Operator: We’ll take our next question from Wade Suki with Capital One.

Wade Suki: Afternoon, everyone. Thank you for taking my question. Just one on guidance, if I could. I I might have missed an interim step somewhere, but I wonder if you could kinda speak to the moving parts from paraglabs. I thought it was around one point three to the one. And if there’s anything embedded in guidance, the thing like that. Sales or, you know, sort of nonaccrucations,

Christopher Guinta: K. Anyways, it’s Chris. No. It’s simple as changes we’re not including FEMA claim in the guidance for for 2025. The one billion dollars be exclusive of the claim. That’s a simple answer.

Wade Suki: Gotcha. That’s what I thought. Thank you. And just just to switch gears a little bit dovetail on I think, Osten’s question earlier, talking about the supply book open. Cargos and whatnot. I’m not so thinking about longer term after these projects, up and running. And so so just wondering if you might be able to give us us color on the third party supply book, kinda what the supply situation is and the out years, you know, excluding FLNG one and two, you know, maybe twenty-six, twenty-seven time frame. Any color you could give us on party supply book would be great. Thank you.

Wesley Edens: Yeah. I mean, obviously, the further out that you go, the more supplies available. The the tightness in the market is really a function of the shortness of gas, in particular in Europe, but the the restrictions on the the Russian gas. That’s why Russian gas coming back into the European markets, if that was the pass, would have a profound impact, I think, on, certainly, on prices in Europe and and thus thus worldwide. As you go further out, there’s obviously a tremendous amount of activity on the construction side. The prices go out. And so if you especially if you’re looking for longer term tenure, there’s a lot of of, you know, gas that is available. So you know, with respect to our portfolio, we do have a couple million tons.

In long term con contracts. We have our own FLNG. So we have very long dated I think that know, as you extend duration in some of these portfolios, you’re also then likely to then look to know, maybe layer in other amounts of supply. So it’s a it’s a large portfolio. As I said, it is on a current basis. We feel like it’s as well matched as we can make it. So it’s like you’re you’re predicting, you know, the usage levels with all the different customers, and there’s always different factors into it. But to the best of our abilities, that’s what we try to do to derisk the portfolio, take advantage of the elevation in price, generate some earnings, but still maintain some significant amount that’s the That’s the that’s the goal. But longer term, there’s lots of gas, I think, that is readily available for longer term projects, especially with creditworthy know, downstream.

Wade Suki: Perfect. Thank you so much. Appreciate it. Could I could I squeeze one more in?

Wesley Edens: Sure. I think you’re the last questions. Okay.

Wade Suki: Thank you. I’m just wondering if there’s anything sort of maybe more creative that you can do in Brazil with the auction coming up, and I’m thinking about the existing Porto de Sergipe and, Selva plants. Is there anything, whether it’s adding capacity or expanding the plants, anything like that Again, because they can creatively to participate more so in that in that option. Any any anything there would be great. Thank you.

Wesley Edens: I I can’t even answer for the Leandro on that. The the Porto de Sergipe and the Selva plants are committed. Right? So unfortunately, we can only commit them once. In fact, they’re they are they are tender they’re tied to very long-term contracts. That said, We think that there is incremental capacity at the terminal. And so, obviously, that’s something that, you know, Leandro and Jeremy and the other guys down there are in the thick of. And the the power auctions are an unbelievable opportunity in our judgment in terms of the, you know, the array of options that they have both on the brownfield and the greenfield sites. And both in the gas terminal cash flows, etcetera. The one point that I would just reinforce is that where in the past, we we either bought or acquired these PTAs and then built the plants, we think now that there’s lots of different opportunities to partner in different ways, We’re very focused on our terminal cash flows, but the overall, you know, impetus for business is to minimize CapEx, maximize free cash flow, grow, you know, without actually building a tremendous amount of stuff on balance sheet.

So while you could put capital into it, we think that that’s actually something that we’re very, very focused on. And we think there’s gonna be lots of opportunity to do so in this house.

Wade Suki: Great. Thank you so much. Appreciate it.

Operator: And at this time, I’ll turn the conference back for any additional or closing remarks.

Wesley Edens: Great. Well, thank you everyone for your time on a on a Monday night. We appreciate it and look forward to to talking to you again soon. Thank you.

Operator: And that’s connected to today’s call. Thank you for your time.