Q1 2022 Montauk Renewables Inc Earnings Call
Yeah.
Good afternoon, everyone and thank you for participating in today's conference call I'd like to turn the call over to Mr. John Sorel Lee as he provide some important cautions regarding forward looking statements contained in the earnings material are made on this call. John . Please proceed.
Good afternoon everyone and thank you for participating in today's conference call. I'd like to turn the call over to Mr. John Ceroli as he provides some important cautions regarding forward-looking statements contained in the earnings material or made on this call. John , please proceed.
Thank you and good afternoon, everyone welcome to Montauk Renewables earnings Conference call to review first quarter, 2022 financial and operating results and business developments I'm John's Rowley, Vice President General Counsel and Secretary at montage.
Thank you and good afternoon everyone. Welcome to Montauk Renewables Earnings Conference call to review first quarter 2022 financial and operating results and business developments. I'm John Srolli, Vice President, General Counsel and Secretary at Montauk.
Joining me today are Sean McLean, Montauk's president and chief executive officer to discuss business developments, and Kevin Van Asland, chief financial officer, to discuss our first quarter 2022 financial and operating results.
Joining me today are Shawn Mcclain, montage, President and Chief Executive Officer to discuss business development, and Kevin Vann, ASLAN, Chief Financial Officer to discuss our first quarter 2022 financial and operating results.
During this call, certain statements will be made which will be forward-looking and based on management's beliefs and assumptions and information currently available to management at this time, including without limitation.
During this call certain statements will be made which will be forward looking and based on management's beliefs and assumptions and information currently available to management at this time, including without limitation statements relating to the company's future results of operations and financial condition as well as our expectations.
statements relating to the company's future results of operations and financial condition, as well as our expectations and plans for the company.
And plans for the company such as with our Montauk Agri Renewables project in North Carolina.
such as with our Montauk ag renewables project in North Carolina, the PICO improvement project and PICO CI score, and market volatility and fluctuations in commodity prices.
<unk> improvement project, and Teco, Ci score and market volatility and fluctuation in commodity prices the market prices of the environmental attributes and future environmental attribute commitments. These.
the market prices of environmental attributes and future environmental attribute commitments.
These statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control, including those set forth in our safe harbor provision for forward-looking statements that can be found in our first quarter 2022 earnings press release.
These statements are subject to known and unknown risks and uncertainties, many of which maybe beyond our control, including those set forth in our safe Harbor provision for forward looking statements that can be found in our first quarter 2022 earnings press release, and our Form 10-Q for the <unk>.
in our Form 10Q for the first quarter of 2020.
First quarter of 2022.
in our most recent annual report on Form 10K, and then other reports on file with the SEC, which provide further detail about the risks associated with our business.
Our most recent annual report on Form 10-K, and then other reports on file with the S. E C, which provide further detail about the risks associated with our business.
Additionally, please note that the company's actual results may differ materially from those anticipated. And, except as required by law, we undertake no obligation to update any forward-looking statement.
Additionally, please note that the company's actual results may differ materially from those anticipated and except as required by law. We undertake no obligation to update any forward looking statement.
Our remarks today may also include non- GAAP financial majors. These non- GAAP financial majors are not prepared in accordance with generally accepted accounting
Our remarks today May also include non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles additional details regarding these non-GAAP financial measures, including reconciliations to the most directly comparable GAAP financial.
Additional details regarding these non- GAAP financial measures, including reconciliations to the most directly comparable GAAP financial measures.
Actual measures can be found in our slide presentation and in our first quarter 2022 earnings press release and Form 10-Q issued and filed this morning. Those are available on our website at IR dot montage renewables dot com.
can be found in our slide presentation in our first quarter 2022 earnings press release and form 10Q issued and filed this morning. Those are available on our website at ir.montagrenovals.com.
After our prepared remarks, we will open the call to questions. We ask that you please keep the one question to accommodate as many questions as possible. And with that, I will turn the call over to Sean.
After our prepared remarks, we will open the call to questions. We ask that you. Please keep to one question to accommodate as many questions as possible and with that I will turn the call over to Sean.
Thank you John .
Thank you, John . Good day, everyone, and thanks for joining our call. I will begin with an update on the development progress at the Pico facility, our Dairy Cluster R&G Project in Idaho.
Good day, everyone and thanks for joining our call.
I will begin with an update on the development progress at the Pico facility, our dairy cluster R&D projects in Idaho.
Our Pico facility continues to meet our expectations after the improvements to the existing digestion process.
Pico facility continues to meet our expectations after the improvements to the existing digestion process production has more than doubled in the first quarter of 2022 as compared to production volumes in the first quarter of 2021.
Production has more than doubled in the first quarter of 2022 as compared to production volumes in the first quarter of 2021.
We continue to anticipate the California Air Resource Board will complete their review of our CI score pathway and we will expect to receive approval of our score during the second half of 2022.
We continue to anticipate the California Air Resource Board will complete their review of our Ci score pathway and we will expect to receive approval of our score during the second half of 2022.
While we continue to store gas in 2022, we expect to begin to release gas from storage in the third quarter of 2022.
While we continue to store gas in 2022, we expect to begin to release gas from storage in the third quarter of 2022.
And while we do not expect to recognize LCFS credit revenue on 2022 production until 2023, we do anticipate recognizing revenues on RINs generated from gas released from storage over the second half of 2022.
And while we do not expect to recognize L. CFS credit revenue on 2022 production until 2023, we do anticipate recognizing revenues on rens generated from gas released from storage over the second half of 2022.
Related to RP feedstock amendments, we expect the dairy to begin to deliver the first tranche of increased feedstock volumes in the second half of 2022.
Related to our feedstock amendments, we expect the dairy to begin to deliver the first tranche of increased feedstock volumes in the second half of 2022.
The improved efficiencies of our existing digestion process have provided the opportunity to pursue additional process changes related to water management.
Improved efficiencies of our existing digestion process have provided the opportunity to pursue additional process changes related to water management.
The volume of water in the existing digestion process limits the capacity available for feedstock, we expect that our water management improvements will enable us to process. The increased feedstock volumes expected from the dairy in the second half of 2022.
the volume of water in the existing digestion process limits the capacity available for feedstock. We expect that our water management improvements will enable us to process the increased feedstock volumes that they expected from the dairy in the second half of 2022.
Our improved water management has also allowed us to work with the dairy to meet their needs and interests related to enhanced water purification.
Our improved water management has also allowed us to work with the dairy to meet their needs and interests related to enhanced water purification. Changes to the water purification
Changes to the water purification process benefits the dairy by improving the quality of water, that's being sent to their lagoons and may reduce our operating costs, though the improvements naturally elongate the timeline of the overall capacity expansion at the peak of facility. We expect the final design phase for our digest.
benefits the dairy by improving the quality of water that's being sent to their lagoons, and may reduce our operating costs, though the improvements naturally elongate the timeline of the overall capacity expansion at the PICO facility. We expect the final design phase for our digestion capacity to be completed during the third quarter of 2022, incorporating both these water management and water purification.
<unk> capacity to be completed during the third quarter of 2022, incorporating both these water management and water purification improvements.
I also want to update on the Montauk Ag Renewable Development Project in North Carolina. We continue to work with our engineer record to optimize improvements to the now-patented reactor technology, which is operating at pilot scale at our Magnolia, North Carolina location.
I also want to update on.
On the Montauk egg renewables development project in North Carolina.
We continue to work with our engineer of record to optimize improvements to the now patented reactor technology, which is operating at pilot scale at our Magnolia in North Carolina location, we have not yet however completed the full improvement programs and have not yet reached commercial operations at dislocation the improvements to the.
We have not yet, however, completed the full improvement programs and have not yet reached commercial operations at this location. The improvements to the reactor technology are intended to be deployed at our Turkey-North Carolina location.
Technology are intended to be deployed at our Turkey, North Carolina location.
While these improvements continue we're in various stages of discussion with regulatory agencies in North Carolina related to the resulting power generation derived from swine waste to ensure its eligibility for renewable energy credits under North Carolina's renewable energy portfolio standards.
While these improvements continue, we're in various stages of discussion with regulatory agencies in North Carolina related to the resulting power generation derived from swine waste to ensure its eligibility for renewable energy credits under North Carolina's Renewable Energy Portfolio Stand.
Our Magnolia, North Carolina location has an existing electricity interconnection which can be reactivated based on the outcome of those discussions.
Our Magnolia in North Carolina location has an existing electricity interconnection, which can be reactivated based on the outcome of those discussions.
We are also in varying stages of corresponding negotiations with power purchasers related to our Magnolia North Carolina electric production.
We are also in varying stages of corresponding negotiations with power purchasers related to our Magnolia North Carolina Electric.
And while Kevin will discuss in greater detail I will note that we made a strategic decision to not commit a significant amount of 2022 vintage rens during the first quarter, which had an impact on our revenues and profitability. This decision was made due to the D. Three written index price generally declining during the <unk>.
And while Kevin will discuss in greater detail, I will note that we made a strategic decision to not commit a significant amount of 2022 vintage RINs during the first quarter, which had an impact on our revenues and profitability. This decision was made due to the D3 RIN index price generally declining during the first quarter of 2022, which we viewed as a temporary event.
First quarter of 2022, which we viewed as a temporary event with the rebound in the D. Three written index pricing in the second quarter of 2022, we have since entered into commitments to sell all of our rigs generated but unsold as of the end of the first quarter and with that I will turn the call over to Kevin.
With the rebound in the D3 RIN index pricing in the second quarter of 2022, we have since entered into commitments to sell all of our RINs generated but unsold as of the end of the first quarter. And with that, I will turn the call to the next slide.
Thank you Sean I will be discussing our first quarter of 2022 financial and operating results. Please refer to our earnings press release and the supplemental slides that have been posted to our website for additional information.
Thank you, Sean. I will be discussing our first quarter of 2022 financial and offer.
Please refer to our earnings press release and the supplemental slides that have been posted to our website for additional information.
Total revenues in the first quarter of 2022 were $32.2 million, an increase of over approximately $0.7 million, or 2.3%, compared to $31.4 million in the first quarter of 2021.
Revenues in the first quarter of 2022 were $32 2 million an increase of over approximately zero point $7 million or two 3% compared to $31 4 million in the first quarter of 2021.
The primary driver for this increase related to an increase of 81.2 percent in realized rent pricing in the first quarter of 2022 of $3.46 compared to $1.91 in the first quarter of 2021. Additionally, higher revenues were driven by an increase in natural gas index pricing of 84.0 percent in the first quarter of 2022 of $4.95 compared to $2.69 in the first quarter of 2021.
The primary driver for this increase related to an increase of 81, 2% and realized RIN pricing in the first quarter of 2022 of $3 46 compared to $1 91 in the first quarter of 2021 <unk>.
Additionally, higher revenues were driven by an increase in natural gas index pricing of 84.0% in the first quarter of 2020 to $4 95 compared to $2 69 in the first quarter of 2021.
These increases were offset by lower counterparty sharing revenues of $0.2 million in the first quarter of 2022 compared to $3.8 million in the first quarter of 2021. Also offsetting the increases, our losses recognized in the first quarter of 2022 related to gas commodity hedging settlement of approximately $3.5 million.
These increases were offset by lower counterparty sharing revenues of 0.2 million in the first quarter of 2022 compared to $3 8 million in the first quarter of 'twenty 'twenty. One also offsetting the increases are losses recognized in the first quarter of 2022 related to gas commodity hedging settlements of approximately $3 5 million.
Yes.
As it relates to 2022 results our profitability is highly dependent when the market price of environmental attributes, including the market price of brands.
As it relates to 2022 results, our profitability is highly dependent on the market price of environmental attributes, including the market price of water.
As we self market a significant portion of our rent a decision not to commit available rent during a period will impact our revenue and operating profit the.
As we self-market a significant portion of our RINs, a decision not to commit available RINs during a period will impact our revenue and operating process.
The industry experienced volatile D3 rent index prices during the first quarter.
The industry experienced volatile D. Three rent index prices during the first quarter.
The average market price of the D. Three rent index. During the first quarter ended March 31, 2022 was approximately $3 25.
Though the average market price of the D3 RIND index during the first quarter ended March 3, 2022 was approximately $3.25, the market price declined as low as $2.85 and generally decreased during the first quarter of 2020.
The market price decline is low at $2 85, and generally decrease during the first quarter of 2022.
We viewed this reduction in price as a temporary event, and we chose not to transfer a significant amount of D3 RINs generated and available for
We viewed this reduction in price as a temporary headwind and we chose not to transfer a significant amount of D. Three rens generated and available for transport as a result for the quarter ended March 31, 2022, we had approximately 4.4 million rins in inventory as compared to 0.6 million Rins in inventory for the first quarter.
As a result, for the quarter-ended March 31, 2022, we had approximately 4.4 million rents in inventory as compared to 0.6 million rents in inventory for the first quarter – for the quarter-ended March 31, 2021.
For the quarter ended March 31 2021.
The market price of D3 RINs has subsequently improved during the second quarter of 2022 with an average year-to-date D3 RIN index price of approximately $3 in 2017.
The market price of D. Three renz has subsequently improved during the second quarter of 2022 with an average year to date, the three rent index price of approximately $3 27.
Accordingly, we have now entered into commitments to transfer all RINDs in inventory as of March 31, 2020.
Accordingly, we have now entered into commitments to transfer all wind in inventory as of March 31 2022.
We have also entered into agreements to transfer the majority of rent expected to be generated and available for transfer during the second quarter of 2020.
We have also entered into agreements to transfer the majority of rent expected to be generated and available for transfer during the second quarter of 2020 to.
The average real-life price of these commitments is approximately $3.40. The average D3 RIN index price during the month of April was approximately $3.33.
The average realized price of these commitment is approximately $3 40.
The average D. Three rent index price during the month of April was approximately $3 33.
We have not currently committed to transfer a significant amount of RINs beyond the second quarter of 2020.
We have not currently committed to transfer a significant amount of rins beyond the second quarter of 2022.
We report the impacts of our gas commodity hedge program within our corporate segment in the first quarter of 2022, our gas commodity hedge program was priced at rates below actual index prices, resulting in realized losses of approximately $3 5 million.
We report the impacts of our Gas Commodity Hedge Program within our corporate segment. In the first quarter of 2022, our Gas Commodity Hedge Program was priced at rates below actual index prices, resulting in realized losses of approximately $1.5 million.
We did not have any gas hedge programs in the first quarter of 2021. Based on current rates, we expect our gas commodity hedge program to continue to be priced below actual index prices through year end of 2022, at which time the hedge program will expand.
We did not have any gas hedge programs in the first quarter of 2021 based on current rates, we expect our gas commodity hedge program to continue to be priced below actual index prices through year end of 2022 at which time the hedge program will expire.
Total general and administrative expenses were $8 5 million for the first quarter of 2022, a decrease of approximately 12 points of euro million or 58, 5% compared to $20 5 million for the first quarter of 2021.
Total general and administrative expenses were $8.5 million for the first quarter of 2022, a decrease of approximately $12.0 million or 58.5% compared to $20.5 million for the first quarter of 2021.
Of the total expense in the first quarter of 2021, approximately $14 4 million was related to stock based compensation costs, primarily associated with the IPO and reorganization transaction.
of the total expense in the first quarter of 2021, approximately $14.4 million was related to stock-based commutation costs primarily associated with the IPO and reorganization trend.
Employee related costs, including stock based compensation decreased approximately $11 9 million or 71% in the first quarter of 2022.
Employee-related costs, including stock-based compensation, decreased approximately 11.9 million or 71 percent in the first quarter of 2020.
Professional fees decreased approximately 0.7 million or 34.4% during the first quarter of 2022, primarily driven by higher fees incurred during the first quarter of 2021 related to our successful completion of our IPO and reorganization.
Professional fees decreased approximately <unk> 7 million or 34, 4% during the first quarter of 2022, primarily driven by higher fees incurred during the first quarter of 2021 related to our successful completion of our IPO and reorganization transactions.
Turning to our segment operating metrics I'll begin by reviewing our renewable natural gas segment.
Turning to our segment operating metrics, I'll begin by reviewing our renewable natural gas.
We produced approximately 1.4 million M M Btu of R&D during the first quarter of 2022, an increase of approximately 21000 M. Btu of R&D over the fourth quarter of 2021.
We produced approximately 1.4 million MMBtU of RNG during the first quarter of 2022, an increase of approximately 21,000 MMBtU of RNG over the first quarter of 2021.
Our Galveston facility.
Produced 66000 more in the first quarter of 2022 compared to the first quarter of 2021 as a result of higher inlet gas due to whirlpool changes in plant efficiency optimization of process equipment.
produced 66,000 more in the first quarter of 2022 compared to the first quarter of 2021 as a result of higher inlet gas due to well fuel changes and plant efficiency optimization, a process
Our McCarty site produced 31,000 less MMVTU of RNG during the first quarter of 2022 compared to the first quarter of 2021. Our landfill host has made changes to its wellfield practices, which has reduced available processable feedstock.
Our Mccarty site produced 31000, and that's M. Btu of R&D during the first quarter of 2022 compared to the first quarter of 2021, our landfill host has made changes to its welfare practices, which has reduced available processible feedstock.
Our ATAS Casita facility produced 24,000 fewer MABTU in the first quarter of 2022 compared to the first quarter of 2021 due to a process equipment failure that has since been repaired.
Our task of feeder facility produced 24000 fewer M. B to you in the first quarter of 2022 compared to the first quarter of 2021 due to a process equipment failure that has since been repaired.
Revenues from the renewable natural gas segment in the first quarter of 2022 were $32 7 million, an increase of approximately $4 5 million or 16, 2% compared to $28 1 million in the first quarter of 2021.
Revenues from the renewable natural gas segment in the first quarter of 2022 were $32.7 million, an increase of approximately $4.5 million, or 16.2 percent compared to $28.1 million in the first quarter of 2021.
Average commodity pricing for natural gas in the first quarter of 2022 with 84.0% higher than the first quarter of 2021.
Average commodity pricing for natural gas in the first quarter of 2022 with 84.0% higher than the first quarter of 2021.
During the first quarter of 2022, we self-marketed approximately 6.5 million RINs, representing an approximate 2.4 million or 26.9% decrease compared to the 8.9 million self-marketed in the first quarter of 2021.
During the first quarter of 2022, we felt marketed approximately $6 5 million of Rins, representing an approximate $2 4 million or 26, 9% decrease compared to the $8 9 million south marketed in the first quarter of 2021.
The decrease was driven by our decision not to self-market a significant amount of RINs due to our belief that the 2022 first quarter, the three RIN index volatility and decline was temporary.
The decrease was driven by our decision not to self market a significant amount of rins due to our belief that the 2022 first quarter. The three rent index volatility and decline with temporary.
Average realized pricing on RIN sales during the first quarter of 2022 was $3.46 as compared to $1.91 in the first quarter of 2021, an increase of 81.2 percent. This compares to the average D3 RIN index price for the first quarter of 2022 of $3.25 being approximately 28.0 percent higher than the average D3 RIN index price in the first quarter of 2021.
Average realized pricing on RIN sales during the first quarter of 2022 was $3 46.
As compared to $8 91 in the first quarter of 2021, an increase of 81, 2%. This compares to the average D. Three rent index price for the first quarter of 2022 of $3 25, being approximately 28.0% higher than the average D. Three rent index price in the first quarter of 2021.
Operating and maintenance expenses for our R&G facilities in the first quarter of 2022 were $9.6 million, an increase of approximately $2.0 million or 25.8% as compared to $7.6 million in the first quarter of 2021.
Operating and maintenance expenses for our R&D facilities in the first quarter of 2022 were $9 6 million, an increase of approximately 2.0 million or 25, 8% as compared to $7 6 million in the first quarter of 2021.
The primary driver of this variance was the favorable impact on our Houston-Texas-based facilities of lower utility rates during the first quarter of 2021.
The primary driver of this variance was the favorable impact on our Houston based Houston, Texas based facilities of lower utility rates during the first quarter of 2021.
Certain of our utility contracts have provisions that when we are not using utilities. The providers are able to contribute that capacity back into the market and we receive credit against our future bills. The first quarter of 2021 weather event, which temporarily impacted our Houston facilities utility consumption resulted in our R&D utilities being approximately $2 2 million.
Certain of our utility contracts have provisions that when we are not using utilities, the providers are able to contribute that capacity back into the market and we receive credit against our future bills. The first quarter of 2021 weather event, which temporarily impacted our Houston facility's utility consumption, resulted in our R&G utilities being approximately $2.2 million lower in such period as compared to the first quarter of 2020.
Lower in such period as compared to the first quarter of 2022.
We produced approximately 45,000 megawatt hours in renewable electricity during the first quarter of 2022, a decrease of 2000 megawatt hours from the 47,000 or 4.2% produced in the first quarter of 2021.
We produced approximately 45000 megawatt hours in renewable electricity during the first quarter of 2022, a decrease of 2000 megawatt hours from the 47000 or four 2% produced in the first quarter of 2021.
The nominal decrease was due to our environment facility having produced two megawatt hours less in the first quarter of 2022 compared to the first quarter of 2021 due to preventive preventative engine.
The nominal decrease was due to our garment facility, having produced two megawatt hours less in the first quarter of 2022 compared to the first quarter of 2021 due to preventive.
Preventative engine maintenance.
Revenues from renewable electric facilities in the first quarter of 2022 were $4.0 million and an increase of approximately $0.6 million or 19.5% compared to $3.3 million in the first quarter of 2021.
Revenues from renewable electric facilities in the first quarter of 2022 were 4.0 million an increase of approximately 0.6 million or 19, 5% compared to $3 3 million in the first quarter of 2021 hour.
Our Bower Mint facility was impacted in the fourth quarter of 2020 by California wildfires forcing it to temporarily shut down the facility.
Our baumann facility was impacted in the fourth quarter of 2020 by California, wildfires, forcing it to temporarily shut down the facility.
This shutdown delayed the timing of monetization of the environmental attributes associated with the Bowerment Facility, which resulted in an approximately $0.6 million in reduced revenues in the first quarter of 2021, as compared to the first quarter of 2021.
Shutdown delayed the timing of monetization of the environmental attributes associated with the <unk> facility, which resulted in an approximately zero point $6 million in reduced revenues in the first quarter of 2021 as compared to the first quarter of 2022.
Operating and maintenance expenses for our renewable electricity facilities in the first quarter of 2022 were 3.3 million.
Operating and maintenance expenses for our renewable electricity facilities in the first quarter of 2022 were $3 3 million.
an increase of approximately 0.4 million or 11.8% compared to 3 million in the first quarter of 2021. The increase is primarily a result of the timing of scheduled engine preventative maintenance intervals at our environment facility, which was approximately 0.5 million higher in the first quarter of 2022 over the first quarter of 2021.
An increase of approximately zero point $4 million were 11, 8% compared to $3 million in the first quarter of 2021. The increase was primarily a result of the timing of scheduled engine preventative maintenance intervals at our <unk> facility, which was approximately 0.5 million higher in the first quarter of 2022 over the first quarter of 2021.
Operating loss in the first quarter of 2022 was 1.7 million, a decrease of approximately 10.6 million or 86.5 percent compared to an operating loss of 12.2 million in the first quarter of 2021.
Operating loss in the first quarter of 2022 was $1 7 million a decrease of approximately $10.6 million or 86, 5% compared to an operating loss of $12 2 million in the first quarter of 2021.
RNG operating profit for the first quarter of 2022 was $13 million, an increase of approximately $2.4 million for 22.4 percent compared to $10.6 million in the first quarter of 2021.
R&D operating profit for the first quarter of 2022 was $13 million, an increase of approximately $2 4 million or 22, 4% compared to $10 6 million in the first quarter of 2021.
Renewable electricity generation operating loss for the first quarter of 2022 was 1.4 million, a decrease of approximately 0.8 million or 33.7 percent compared to an operating loss of 2.2 million for the first quarter of 2021.
Renewable electricity generation operating loss for the first quarter of 2022 was $1 4 million a decrease of approximately <unk> 8 million or 33, 7% compared to an operating loss of $2 2 million for the first quarter of 2021.
Yeah.
Turning to the balance sheet, as of March 31, 2022, $78 million was outstanding under our term loan, and we had no borrowings under our revolving credit.
Turning to the balance sheet as of March 31, 2022, 78 million was outstanding under our term loan and we had no borrowings under our revolving credit facility.
The company's capacity available for borrowing under the revolving credit facility was $116 1 million during.
The company's capacity available for borrowing under the Revolving Credit Facility was 116.1 million. During the first quarter of 2022, we generated 9.6 million of cash from operating activities, a 23.5% increase from the first quarter of 2021 of 7.8 million.
During the first quarter of 2022, we generated $9 6 million of cash from operating activities. A 23, 5% increase from the first quarter of 2021 of $7 8 million.
For the first quarter of 2022, our capital expenditures were approximately $2 4 million of which approximately $1 1 million.
For the first quarter of 2022, our capital expenditures were approximately $2.4 million of which approximately $1.1 million of the first quarter of 2022 capital expenditures were related to the ongoing development of Montauk Ag Renewables in North Carolina.
Of the first quarter of 2022 capital expenditures were related to the ongoing development of Montoc add renewables and North Carolina.
In the first quarter of 2022, we also received proceeds from the sale of knock-emission allowance credits, resulting in a gain of approximately $0.3 million.
In the first quarter of 2022, we all.
Also receive proceeds from the sale of Nox emission allowance credits, resulting in a gain of approximately zero point $3 million.
We present EBITDA and adjusted EBITDA metrics, because we believe the measures assist investors in analyzing our performance across reporting periods on a consistent basis by excluding items.
We present EBITDA and adjusted EBITDA metrics because we believe the measures assist investors in analyzing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of.
That we do not believe are indicative of our core operating performance.
adjusted EBITDA in the first quarter of 2022 was 7.0 million, an increase of approximately 12.8 million or 221.8 percent over adjusted EBITDA of negative 5.8 million for the first quarter of 2021.
Adjusted EBITDA in the first quarter of 2022 was 7.0 million an increase of approximately $12 8 million or 221, 8% over adjusted EBITDA of negative $5 8 million for the first quarter of 2021.
EBITDA for the first quarter of 2022 was $3.8 million, an increase of approximately $10.3 million for 158.6 percent over EBITDA of negative $6.5 million for the first quarter of 2021.
EBIT for the first quarter of 2022 was $3 8 million, an increase of approximately $10 3 million or 158, 6% over EBITDA of negative $6 5 million in the first quarter of 2021.
Net loss for the first quarter of 2022 decreased approximately $13 2 million or <unk> 92, 2% from net loss of $14 3 million for the first quarter of 2021. This decrease was primarily related to reduced employee related costs, including stock based compensation of $11 9 million in professional fees of <unk> 7 million respectively.
Net loss for the first quarter of 2022 decreased approximately $13.2 million, or 92.2% from net loss of $14.3 million for the first quarter of 2021. This decrease was primarily related to reduced employee-related costs, including stock-based compensation of $11.9 million and professional fees of $0.7 million.
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In the first quarter of 2022 over the first quarter of 2021 related to the successful completion of our IPO and reorganization transaction.
in the first quarter of 2022 over the first quarter of 2021 related to the successful completion of our IPO and reorganization transactions. I'm also
Now I'll turn the call back over to Sean.
Thanks, Kevin.
Thanks, Kevin. In closing, we want to reaffirm our full year 2022 outlook.
In closing, we want to reaffirm our full year 2022 outlook.
While our decision to delay the monetization of 2022 rigs during the first quarter impacted the timing of our revenues were nominally updating our 2022 outlook, we expect R&D production volumes to range between five and a half and $6 7 million M. M Btu with corresponding RMG revenues between 181 and two.
While our decision to delay the monetization of 2022 RINs during the first quarter impacted the timing of our revenues, we're nominally updating our 2022 outlook.
We expect R&G production volumes to range between $5.5M and $6.7M MMBTU with corresponding R&G revenues between $181M and $226M. We expect Renewable R&G revenues to range between $1M and $6.7M MMBTU with corresponding R&G revenues between $1M and $6.7M MMBTU with corresponding R&G revenues between $1M and $6.7M MMBTU with corresponding R&G revenues between $1M and $6.7M MMBTU with corresponding R&G revenues between $1M and $6.7M MMBTU with corresponding R&G revenues between $1M and $6.7M MMBTU with corresponding R&G revenues between $1M and $6.7M MMBTU with corresponding R&G revenues between $1M and $6.7M MMBTU with corresponding R&G revenues between $1M and $6.7M MMBTU with corresponding R&G revenues between $1M and $6.7M MMBTU with corresponding R&G revenues between $1M and $6.7M MMBTU with corresponding R&G revenues between $1
Third and $26 million, we expect renewable electric production volumes to range between 188, 230000 megawatt hours with corresponding renewable electricity revenues between 17 and $20 million and with that we'll pause for any questions.
production volumes to range between 188 and 230,000 megawatt hours with corresponding renewable electricity revenues between 17 and 20 million. And with that, we'll pause for any
Thank you to ask a question you will need to press star one on your telephone to withdraw your question press the pound key.
Thank you. To ask a question, you'll need to press star one on your telephone. To withdraw your question, press the pound key. Again, if you would like to ask a question, press star one.
If you would like to ask a question press star one.
Our first question comes from Matthew Blair with T. P. H Your line is open.
Our first question comes from Matthew Blair with TPH, your line is open.
Good morning. Thanks for taking my question here. I'm looking at slide 11, which shows your opportunity pipeline. It's pretty specific, you know, talking about six landfill R&G sites and multiple dairy digesters, even some wastewater treatment. I was hoping you could give us a sense of, you know, if all that materialized and came to pass.
Hey, good morning, Thanks for taking my question here.
I am looking at slide 11, which shows your opportunity pipeline, it's pretty specific you know talking about six.
Landfill Orange these sites in multiple dairy digesters, even some wastewater treatment I was hoping you could give us a sense of.
If all of that materialize when it came to pass.
What kind of production uplift would you expect? For example, would that double or even triple your existing production?
What kind of production.
Uplift would you expect you know for example would that double or even triple your existing production.
Yeah, Matt. Thanks for the question I can I can take that.
Yeah, Matt, thanks for the question. I can take that. The opportunity suite that we're looking at for inorganic growth is unprecedented. It's unprecedented in the industry right now, and in specific regards to this company, having been in the business going into its fourth decade, you're shortlisted on a number of these opportunities right at the onset, several of these projects, you're shortlisted on a number of these opportunities right at the onset, several of these projects.
The the opportunity suite that we're looking at for inorganic growth.
Is is unprecedented it's unprecedented in the industry right now and in specific regards to this company having been in the business going into its fourth decade.
Your shortlisted on a number of these opportunities right at the onset several of these projects.
We're in the second rounds of due diligence. We've offered non-binding indicatives to go into this. Should any subset of these
We're in the second rounds of due diligence we've offered.
Nonbinding indicative to go into this.
Should any subset of these opportunities close they will have a material impact on not only our production, but also the the revenue and the corresponding EBITDA that comes out of a variety of projects that either take primary focus on the RFS or play into the state based programs.
opportunities closed. They will have a material impact on not only our production, but also the revenue of the corresponding EBITDA that comes out of a variety of projects that either take primary focus on the RFS or play into the state-based programs for decarbonization, such as California's low carbon fuel standard.
For de carbonization, such as California's low carbon fuel standard to.
To stay specific regards as to what percentage of volume production you would expect to get out of this, there wouldn't be something that would be discloseable at this time. One as most of these projects are in varying stages of due diligence, we wouldn't want to set expectations that 30% or 70% or 100% of these projects.
To say specific regards as to what percentage of volume production you would expect to get out of this.
It wouldn't be something that would be disclosed a bull at this time one as most of these projects are in varying stages of due diligence, we wouldn't want to set expectations that 30% or 70% or 100% of these projects end up being closed upon and two.
end up being closed upon, and two, it would be short-sighted to communicate a percentage pickup in production because, as we all know, depending on the
It would be shortsighted to communicate a percentage pickup in production because as we all know depending on the item, that's being produced or the way in which it's being monetized or its carbon footprint profile.
item that's being produced or the way in which it's being monetized or its carbon footprint profile.
You are going to have varying degrees of value that you can recognize out of every additional and then BTU of production that comes out of any one of those.
You are going to have varying degrees of value that you can recognize out of every additional M. Btu of production that comes out of any one of those facilities.
And then Matthew, just to reiterate what Sean said, I did want to make sure that you saw the note there that we have not entered into any definitive agreement with any of the inorganic strategic opportunities within that development pipe.
And then Matthew just to reiterate what Ron said I did want to make sure that you can solve a note there that we had not entered into any definitive agreement with any of the inorganic strategic opportunities within that development pipeline.
Thank you and our next question comes from Craig Shere with Tuohy Brothers. Your line is open.
Thank you. And our next question comes from Craig Shear with Two E Brothers. Your line is open.
Hi.
Just taking a look again along with Matthew's question Slide 11.
I guess taking a look again on with Matthew's question at slide 11, what kind of all-in
What what kind of all in.
acquisition and associated CAPEX multiple to
Acquisition and associated Capex.
Multiple too.
you know, longer-term run rate EBITDA, do you target for these inorganic opportunities? And how do you contrast that with your organic opportunities?
Longer term run rate EBITDA do you do target for these inorganic opportunities and how do you contrast that with organic opportunities.
That's a great question, Craig. The way in which we typically prioritize and value these opportunities is depending primarily on how we intend to monetize the process that we
That's a that's a great question, Craig the way in which we typically prioritize and value of these opportunities is depending primarily on how we intend to monetize.
The process that we take in looking at new project opportunities is whether or not we need cash for ongoing operations for short term transaction due diligence processes in which case, we may look to bind a subset of that production or the production for an entire project.
in looking at new project opportunities is whether or not we need cash for ongoing operations for short-term transaction due diligence processes, in which case we may look to bind a subset of that production or the production for an entire project into a long-term fixed price agreement.
<unk> into a long term fixed price agreement now that will come at a discount relative to the self marketing approach. The majority of the company's portfolio takes and in that.
Now, that will come at a discount relative to the self-marketing approach that the majority of the company's portfolio takes.
In that example, we will focus on a low double-digit tenure IRR to focus on the profitability of that type of a project relative to the capital that goes in.
Instance, in that example, we will focus on a.
You know a low double digit 10 year IRR to focus on the profitability of that type of project relative to the capital that goes in if we are taking the more traditional approach to the business takes which is.
If we are taking the more traditional approach that the business takes, which is aggressively into the federal and state attribute programs and self-monetizing those, not quite real-time, but on a nominal delay and being more respective of the market conditions, you look for a more aggressive approach in the form of a payback, a recovery of your capital, probably somewhere in that five-year, six-year range.
Aggressively into the federal and state of atrophy programs and self monetizing those not quite real time, but on a on a nominal delay and being more respective of the market conditions. You look for a more aggressive approach in the form of a payback of recovery of your capital probably somewhere in that.
Five year six year range and so we're focused heavily in that regard. If we are able to take advantage of the ever growing federal and state programs and and monetize it in that fashion relative to the capital needs for those projects.
and so we're focused heavily in that regard if we are able to take advantage of the ever-growing federal and state programs.
and monetize in that fashion.
Relative to the capital needs for those projects, we're focused on
We're focused on.
A a sufficient amount of capital.
To work through all of the varying stages of the due diligence processes that we have for each of the opportunity through a combination of our cash flows from operations.
of the due diligence processes that we have for each of the opportunity through a combination of our cash flows from operations, from a newly amended and robust credit syndication, as well as an opportunity to tap even into accordion features that allow for us to get quick access to the capitals that we would need for the development of a substantial majority of those projects should they come to fruition. And we will announce the success of those as those projects to Kevin's point are ultimately contracted.
A a newly amended and robust credit syndication.
As well as an opportunity to tap even into accordion features that allow for us to get quick access to the capital that we would need for the development of a substantial majority of those of those projects should they come to fruition and we will announce the success of those as those projects to Kevin's point.
Ultimately contracted.
Thank you and I'm showing no other questions in the queue I'd like to turn the call back to management for any closing remarks.
Thank you, and I'm showing no other questions to the queue. I'd like to turn the call back to management for any closing remarks.
Oh. Thank you. Thank you for taking the time to join US on the conference call today, and we look forward to speaking with you again on our 2022 second quarter conference call.
Thank you. Thank you for taking the time to join us on the conference call today, and we look forward to speaking with you again on our 2022 Second Quarter Conference call.
This concludes today's conference call. Thank you for participating you may now disconnect everyone have a great day.
This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.
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