Consistent with our prior guidance, we expect a significant uptake in the transaction volume and operating results in the second quarter. I’ll now turn the call back to Mark for closing comments.
Mark McHugh: Thanks, April. As we wrap up today’s call, I’d like to recognize the extraordinary efforts of our team during what has been an incredibly busy period of time for our entire organization. Amid challenging end market conditions, our team has worked diligently to make value-optimizing decisions throughout our operations while also advancing several important strategic initiatives. As we move through the remainder of the year, we are optimistic that continued favorable dynamics for single-family housing, higher operating rates for many of our pulpwood customers and lower log inventories in China will translate to improving fundamentals in our timber segments. On the real estate front, we’ve been pleased by the continued strong demand for our rural land and development properties despite the higher interest rate environment.
We are especially excited to start executing on new opportunities in wildlife stemming from the entitlements that our team secured last November. We’ve also continued to make progress in our land-based solutions business. Specifically, we’ve increased the number of acres we have under lease for carbon capture and storage to 70,000 acres as of today, up from 59,000 acres at the time of our Investor Day. In addition, we now have 33,000 acres under option for solar development, up from 27,000 acres at the end of 2023. As we’ve expanded our pipeline of opportunities in land-based solutions, we’ve continued to focus on working with high-caliber counterparties that we believe will ultimately see a stronger conversion rate to operational facilities.
All said, I’m very proud of how we worked together to effectively manage through some difficult market conditions while also advancing these important strategic initiatives. In closing, I’d further like to thank our Board as well as our recently retired CEO, Dave Nunes, for guiding us through a smooth leadership transition process over the past two years. Their collective efforts helped ensure that the organization didn’t skip a beat amid a very dynamic market environment. Lastly, I also want to take a moment to recognize the significant contributions of our Board Chair, Dod Fraser, who will be retiring from our Board in May. Dod has served on the Board of Rayonier since the 2014 spinoff of the Performance Fibers business, including as Chair for the past four years as well as Audit Chair for the prior six years.
Throughout this time, he’s demonstrated impeccable leadership, dedication and judgment. On behalf of the Board and the entire company, I want to thank Dod for his invaluable contributions, the governance of Rayonier and wish him well in his future endeavors. That concludes our prepared remarks. And I’ll now turn the call back to the operator for questions.
Operator: [Operator Instructions] Ketan Mamtora with BMO Capital Markets. You may go ahead.
Ketan Mamtora: Thank you and good morning. Perhaps we’ll start with Mark, can you talk a little more about sort of the progress on the land-based solutions side. As you look at, you talked about solar, you talked about CCS. As you think about next two, three, five years, where do you think sort of from your standpoint, you see the most opportunity? And how should we sort of think about when this starts to have an impact on EBITDA?
Douglas Long: Sure. This is Doug. I’ll start off with that. So as we laid out at our Investor Day, we talked about kind of a process here with respect to getting these — the pipeline built out on our land-based solutions, particularly on the CCS side of things as well as the solar. And then there’s that, depending on what it is, a multiyear project to get it permitted and get it into the grid, if it’s a solar and then to get it built. So we are building that out as we talked about and very happy we’re out on those, and I’ll talk about kind of progress in each of those in a second. But when it comes to delivering on those things, as we mentioned at Investor Day, there’s kind of these incremental steps, which is why we put out kind of interim targets to share with that.
So we see that building, but there is going to be a slight delay as we get these in the pipeline, which we do recognize option values and lease payments at that point in time. But it’s really at the point in time when they start to produce either power or we sequester carbon where we’ll see the real benefit of those hit in and we see that still kind of in that three to five year time horizon.
Mark McHugh: Ketan, we did lay out our targets at our Investor Day back in February, $75 million of adjusted EBITDA by 2030 and that interim target that Doug referenced of $30 million by 2027. We’ve also started to break out our land-based solutions contribution in our Southern Timber segment detail in our supplement just so investors can start to track our progress against those targets.
Douglas Long: Yes. What I would say is that we’re seeing really strong interest in both those areas. On the carbon capture storage, that mark just continues to grow for us, and we’re seeing just a lot of interest from other people. We started off in the oil and gas industry. We are really starting to see more interest broader from utilities, pulp and paper industries. And we have our pipeline of projects is really strong, and we’re advancing multiple large-scale opportunities across the U.S. South that we think will meaningfully contribute towards our goals in 2024. Mark mentioned that we’ve increased our actual lease acres up to 70,000 acres in his comments, and we’re actively in exploration discussions on additional 200,000 acres with several other companies.
So we feel good about the progress we’re making in our carbon capture storage. And on the solar side of things, also really happy with the progress we’re seeing there. So our pipeline projects, again, is really strong and growing. We now have over 33,000 acres under option for solar development, which is up from 27,000 at the end of 2023. And we’re on track to achieve our year-end objective having 50,000 acres under options. And we’re advancing quite a few multiple large-scale solar relationships across the South. And we think those will contribute meaningfully over the next few years as we go forward. What I’m really excited to see is that some of the ISOs, those independent system operators for the regional transmissions, they have started to implement interconnection key reforms with the goal of ensuring that projects that are going to basically have a high level of success get brought up in the queue.
And in the past, we talked about we’ve seen where there’s been a lot of projects clog in the queue and some of those had low probability of success. And we’re seeing reforms that help with that. And we believe that our focus on working with high-quality counterparties who are, in a lot of cases, the utility companies themselves, that will help speed that process up and move it up the queue. So we do believe that, that will bring some of these forward and we’ve seen more of those projects kind of moving forward, and we believe we’ll be under construction this year.
