Q1 2024 New Fortress Energy Inc Earnings Call

Ladies and gentlemen, thank you for standing by your currently on hold for the N V first quarter 'twenty 'twenty four earnings call. At this time, we are assembling today's audience and plan to be underway. Shortly we appreciate your patience and ask that you. Please remain on the line.

Operator: Ladies and gentlemen, thank you for standing by. You're currently on hold for the NFE first quarter 2024 earnings call. At this time, we are assembling today's audience and plan to be underway shortly. We appreciate your patience and ask that you please remain on the line. Today's conference is being recorded, and all phone lines are in a listen-only mode, but later we will have an opportunity to ask questions. To get us started today with opening remarks and introductions, I am pleased to turn the floor over to Managing Director of Strategy and Investor Relations, Mr. Chance Pipitone. Please go ahead, sir.

Yes.

Yeah.

[music].

Speaker Change: Good morning, everyone and welcome to the New fortress Energy first quarter 'twenty 'twenty four earnings Conference call. Today's conference is being recorded and all phone lines. All phone participant lines are in a listen only mode. But later, we will have an opportunity to ask questions to get US started today with opening remarks and introductions I am pleased to turn the floor.

Chance Pipitone: Great. Thanks, Chance, and welcome, everybody.

Speaker Change: Two managing director of strategy and Investor Relations Mr. Chance Pepitone. Please go ahead Sir.

Unknown Executive: Thank you Lisa and good morning, everyone. Thank you for joining today's conference call, where we will discuss our first quarter 2024 results. The call is being recorded and will be available by replay on the investors section of our website under the subheading events and presentations at the same location you will find a presentation that we will walk through on today's.

Unknown Executive: Paul. Please review this as it includes important information, including disclosures and risk factors with that I'll now hand over the call to our chairman and CEO Wes Edens, great. Thanks, Jess and welcome everybody as usual please refer to the materials that we sent out and that's what we'll be using to kind of walk through the.

Wesley Robert Edens: As usual, please refer to the materials that we sent out. That's what we'll be using to kind of walk through the financial presentation for the day. So, flip to page number three, and first, let's start with the results. The quarterly results were very solid. $340 million in EBITDA, right on top of our estimates, still tracking on our guidance for the year, so financially a very, very good quarter for us. Financial results were exactly as expected, and the path for the rest of the year is now very clear.

Wesley Robert Edens: Financial presentation for the day.

Wesley Robert Edens: So flip to page number three and first let's start with our results quarterly results were very solid.

Wesley Robert Edens: Hundred and $40 million in EBITDA right on top of our estimates still tracking on our guidance for the year. So financially a very very good quarter for us financial results for exact exactly as expected in the past for the rest of the year is now very clear.

Wesley Robert Edens: Our business now is one that is fully focused on generating long-term sustainable and growing results, and we've never felt better about it than we do today. Now, let's turn to page four, and I'll talk about each of the three major updates that we'd like to talk about and introduce them for you, and then turn them over to the guys that run each part of these businesses. Brannen McElmurray runs our Puerto Rico operation, Andrew Dete runs the Brazil operation, and then Chris Ginta, our CFO, who's also in charge of our Crest Energy project. So let's turn to page four and talk about that.

Wesley Robert Edens: Our business now is one that is fully focused on generating long term sustainable and growing results and we've never felt better about it than we do today.

Wesley Robert Edens: Let's turn to page four and I'll talk about each of the three major updates I would like to talk about and introduce them for you and then turn them over to the guys that run huge part of these businesses Brennan macro Mercury runs our Puerto Rican operation, Andrew <unk>, who runs the Brazil operation and then Chris agenda. Our CFO, who is also in charge of our brass LNG projects. So, let's turn to page number four and talk about.

Brennan: At first Puerto Rico, Let's just put where we are today in the context, we went to Puerto Rico and the fall of 2017 three days after Hurricane Maria saw the devastation in the islands saw the need for a for power and for cheaper power and went to work both the logistics chain to bring gas and power into the island opened our terminal in the June of 2002.

Wesley Robert Edens: First, Puerto Rico. Let's just put where we are today into context. We went to Puerto Rico in the fall of 2017, three days after Hurricane Maria.

Wesley Robert Edens: We saw the devastation of the island, saw the need for power and for cheaper power, and went to work. We built the logistics chain to bring gas and power into the island, opened our terminal in June of 2020, right in the middle of COVID, and entered into a contract for roughly 25 TBTUs to provide gas to San Juan for the first time. This is a big first step for us. Three years later, in 2023, in response to a FEMA process, we successfully were awarded the contracts to build two additional power plants, 425 megawatts of power in total for FEMA and the Army Corps. We did so in record time.

Brennan: Right in the middle of Covid and entered into a contract for roughly 25 TVT used to provide gas to San Juan for the first time. This is a big first step for us.

Brennan: Three years later in 2023 in response to a FEMA.

Brennan: Process, we did successfully and were awarded the contract to build two additional power plants 425 megawatts of power in total for FEMA and the Army Corps we.

Brennan: We did so in record time.

Wesley Robert Edens: The power has been dispatched 98% of the time, so it's been highly reliable. It's provided a critical 15% of the margin to the system. It's had a massive impact on the island. This has been a very powerful economic result for us, as you know as well. But the most asked question we get is how will this transition, what will be the long-term future for us with respect to this and other gas opportunities on the island? Today, we have that answer.

Brennan: Power has been dispatched 98% of the time since been a highly reliable which provided the critical 15% in the margin to the system has had a massive impact on the island. This has been a very powerful economic result for us as you know.

Brennan: As well, but the most asked question we get is how will this transition well over the long term future for us with respect to this and other gas opportunities on the island.

Brennan: Today, we have that answer the government has done exactly as we said that we thought that they would when fever decided to end the contract. The decision that was made to nominally keep the power plants on and keep them using gas, but to also greatly expanded use of natural gas around the island.

Wesley Robert Edens: The government has done exactly as we thought that they would when FEMA decided to end the contract, the decision that was made to not only keep the power plants on and keep them using gas, but to also greatly expand the use of natural gas around the island. The goal from the Puerto Rican government is very simple. First, replace distillate fuels, diesel, and fuel oil, with gas.

Brennan: The goal from the Puerto Rican government very simple.

Brennan: Replace distillate fuels diesel and fuel oil with gas it's much cheaper it's much cleaner and can be done throughout the island with our extensive logistics chain. So when the government terminated agreement. They also put out for bid a contract to provide gas for roughly twice as much fuel is being used by FEMA to 40 TVT used that they are using <unk>.

Wesley Robert Edens: It's much cheaper, it's much cleaner, and it can be done throughout the island with our extensive logistics chain. So when the government terminated the agreement, they also put out for bid a contract to provide gas for roughly twice as much fuel as what's being used by FEMA. The 40 TPTUs that they were using previously now go to 80, and the term that they were using them for extends from one year to four.

Brennan: Previously now goes to 80 and a term that they are using it for extends from one year to four twice as much feel much longer duration. What we said before is exactly what we expected to happen sell more fuel at a lower price. So we make less money on the margin, but we make it up on volume Brandon will walk through in detail, but in simple terms.

Wesley Robert Edens: Twice as much fuel, much longer duration. What we said before is exactly what we expected to happen; sell more fuel at a lower price, so we make less money on the margin, but we make it up on volume. Brannen will walk through, in detail, but in simple terms, the need on the portfolio across the islands for a total of about 300 TBTU, and we detail that in the presentation. So even with this new contract, we are now at 105 TBTU. So think of 25 from the original contract and another 80 from this contract.

Brennan: The need for and the portfolio across the arms for a total of about 300 <unk>, we detailed out in the presentation. So even with this new contract.

Brennan: We're now at 105 <unk>. So think of 25 from the original contract. Another 80 from this contract. That's approximately 2 million tons of LNG is a very significant downstream customer for us, but it only represents only about one third of what the current need is so it's really an amazing outcome for us and an amazing outcome from Puerto Rico simply switching.

Wesley Robert Edens: That's approximately 2 million tons of LNG, so it's a very significant downstream customer for us, but it represents only about one-third of what the current need is. So it's really an amazing outcome for us and an amazing outcome for Puerto Rico. Simply switching fuel from distillate fuels to gas will save them billions at no capital cost to the island and cut emissions dramatically. And this then paves the way for the next leg of this, which is exactly what we expect them to do now, which is to go out and build new, efficient generation plants to replace the old power plants. This will dramatically increase the reliability of the system.

Brennan: Fuel from distillate fuels to gas will save them billions at no capital cost the island and cut emissions dramatically and this then paves the way for the next leg of this which is exactly we expect him to do now which is now to go out and build new efficient generation plants to replace the old power plants. This will increase the reliability of the system dramatically. It will extend the term of our contracts and savings.

Wesley Robert Edens: It will extend the term of our contracts and save even more money for Puerto Rico. What's left for us in Puerto Rico in our business is simply long-duration, highly sustainable, highly predictable gas contracts for us all, which is amazing. That's the outcome that we are looking for, and with this today, we can see the path to getting there exactly as we predicted. The last piece of the FEMA situation is the economic resolution of the early termination of the contract.

Brennan: More money for border regions was left for us in Puerto Rico, and our business is simply long duration high sustainable highly predictable cash gas contracts for at all which is amazing that's the outcome that we're looking for and with US today, we can see the path to getting there exactly as we predicted.

Brennan: The last piece of the FEMA situation as the economic resolution of the early termination of the contract. There are cute clear contractual obligations that now will be not this is an ongoing process that should be resolved in the near term and under terms that are agreeable to both parties Brandon will detail. This but it's a very very good outcome for us and a good outcome for them we.

Wesley Robert Edens: There are clear contractual obligations that will now be met. This is an ongoing process that should be resolved in the near term and under terms that are agreeable to both parties. Brannen will detail this, but it's a very, very good outcome for us and a good outcome for them. We will complete, this will complete the transition for us. I'll be able to provide much more clarity to you in the coming quarters as to the marginal economics of Puerto Rico, just as we have marginal economics of each of our major... Second item on the agenda that I wanted to highlight is Brazil. Brazil is, without question, the greatest gas-to-power situation in the world when we're in a dominant position to transact. It has every element you could possibly wish for.

Brennan: We will complete this will complete the transition for us I'll be able to provide much more clarity to you in the coming quarters as to the marginal economics of Puerto Rico, just as when we have marginal economics of each of our major markets.

Brennan: Second item up that I wanted to highlight is Brazil.

Brennan: Brazil is without question the greatest gas to power situation in the world and when we were in a dominant position to transact. It as every element you could possibly wish for its large size of the country is large and significant 200 plus million people one of the biggest energy markets in the world.

Wesley Robert Edens: It's large. The size of the country is large and significant. 200 plus million people, one of the biggest energy markets in the world. Number two, need.

Wesley Robert Edens: 75% of their power in their system is renewable, which is great. It provides baseload production at a very, very low cost, but it is not entirely reliable in all situations. So what they need is baseload dispatchable power to balance the system when the sun doesn't shine or the rain doesn't fall. They have been running capacity auctions for nearly 20 years in Brazil, so the term structure and the plumbing of how they auction off this capacity are very, very well known.

Brennan: Number two need 75% of their power in their systems renewable which is great. It provides baseload production from the very very low cost, but it is not entirely reliable in all situations. So what they need as base load dispatch will power the balance of the system when the Sun doesn't shine the rain doesn't fall they have been running capacity auctions for.

Brennan: Nearly 20 years in Brazil, so the term structure and the plumbing of how they auction off this capacity is very very well known to date, they've auction nearly 30 gigawatts of power and they have recently announced another eight gigawatts to be auctioned off later this summer.

Wesley Robert Edens: To date, they have auctioned nearly 30 gigawatts of power, and they have recently announced another 8 gigawatts to be auctioned off later this summer. The duration, the duration of these power assets that we have there is very, very long term, 15 and 20 years in total, 18 years on average. Very, very long term, very easy to predict, and predict economics. Next, credit quality. These are direct obligations of the Brazilian government. Basically, sovereign risk is directly from the government, which is the largest country in South America.

Brennan: The duration the duration of these power assets that we have there is very very long term, 15% and 20 years in total 18 years on average very very long term very easy to.

Brennan: Protect economics.

Brennan: Next credit quality. These are direct obligations with the Brazilian government basically sovereign risk directly from the government, which is the largest country in South America. So it couldnt be better in terms of the need the duration and credit quality.

Wesley Robert Edens: So it couldn't be better in terms of the need, the duration, and the credit quality of the contracts we enter into. And lastly, and, of course, from our perspective, the most important thing is that we have a massive competitive advantage. We have two huge LNG terminals that are completed and are operational today. They're delivering gas into the system as we speak. The way the auctions are structured, you need to provide power immediately at a call.

Brennan: The contracts, we enter into and lastly, and of course market perspective.

Brennan: Most important is we have a massive competitive advantage here.

Brennan: Have two huge LNG terminals that are completed and are up and running operationally today. They are delivering gas into the system as we speak.

Brennan: The way the auctions are structured you need to provide power immediately call capacity simply means that when the sun doesn't shine and the rain doesn't fall. They can call you within 72 hours you asked us to provide the power to them. The only way to do that is to have standby gas and power. The only way you can have standby gas and powers of LNG. The only LNG terminals that are down to their own.

Wesley Robert Edens: Capacity simply means that when the sun doesn't shine and the rain doesn't fall, they can call you within 72 hours if you're asked to provide power to them. The only way to do that is to have standby gas and power.

Wesley Robert Edens: The only way you can have standby gas and power is with LNG. The only LNG terminals that are down to their own privately are the ones by us. It's a massive competitive advantage. And this is not just a theoretical opportunity for us. What we've accomplished to date down there is incredible. We have both terminals operating.

Brennan: <unk> are the ones by US is a massive competitive advantage and this is not just a theoretical and the future opportunity for us what we've accomplished to date down there is incredible we are both terminals operating we have 122 gigawatts of power that is under construction today and will be delivered next summer in the summer afterwards on the books since <unk>.

Wesley Robert Edens: We have one 2.2 gigawatt of power that is under construction today. It will be delivered next summer and the summer after that. On the books, it's 500 million dollars of highly predictable and long-duration cash flow, wholly owned by us, fully funded, and has the potential for it to grow significantly with these auctions this summer, which we have an incredible competitive advantage to talk about. We're now in the middle of the process of thinking through how to bring this value to our shareholders, and we are in the middle of the process of doing two things.

Brennan: $500 million of highly predictable and long duration cash flow wholly owned by US fully funded and has the potential for it to grow significantly with these auctions. This summer, which will be an incredible competitive advantage due to talk about we're now in the middle of the process to thinking through how to bring this value to our shareholders and are in the middle of a process to do two things one to bring.

Wesley Robert Edens: One, to bring in a partner or partners to buy a piece of the business, both to return capital from our original investment and also to validate the value of the business, both of which we think are going to happen.

Brennan: A partner or partners to buy a piece of the business both to return capital from our original investment and also to validate the value of the business both of which we think are going to happen. We think that that'll be a process that culminated in summer. It will be shown at an attractive valuation to us and provide liquidity to us back on our original investment.

Wesley Robert Edens: We think that'll be a process that culminates this summer. It'll be shown an attractive valuation to us and provide liquidity to us back on our original investment. And two, we expect to file this company for an IPO this summer, probably in July or August. We'll see how the auctions transpire in the fall and then get this into the equity markets. We think the valuation proposition for investors is tremendous, and obviously, the derivative of that is valuation to us.

Brennan: And two we expect to file this company for an IPO. This summer probably in July or August we will see how the auctions transpire in the fall and then gets us into the equity markets with its evaluation proposition for investors is tremendous and obviously the derivative of that is the valuation to us it's an incredible opportunity as an incredible portfolio of assets that exist today.

Wesley Robert Edens: It's an incredible opportunity. It's an incredible portfolio of assets that exists today. It's an incredible management team with huge growth opportunities, and that translates into huge value for our shareholders. The third item on the list is the FLNG update. Today the liquefier is mechanically complete. We are in the final stages of commissioning it. We expect gas in a matter of the next several days, not months. We expect the first cargo in June.

Brennan: <unk> is an incredible management team with huge growth opportunity and that translates into a huge value for our shareholders.

Brennan: Third item on the list is the LNG update today. The liquefied is mechanically complete we are in the final stages of commissioning that we expect gas in that matter over the next several days.

Brennan: Not months, we expect the first cargo in June. This is a culmination of many years of hard work and represents a huge accomplishment for our team both here and in the field represents an incredibly valuable asset for us. So we can then finance in the matter of all other LNG projects. Once it is completed and operations, putting finance against this will allow us to repay significant amounts of <unk>.

Wesley Robert Edens: This is the culmination of many years of hard work. It represents a huge accomplishment for our team, both here and in the field. It represents an incredibly valuable asset for us that we can then finance in the manner of all other LNG projects once it's completed in operations. Putting finance against this will allow us to repay significant amounts of corporate debt, lower the cost of our debt, and extend the term, which are all very important, achievable financial goals for us as a company. So that's the update. So with that, let me turn it over to you. It starts with Brannen.

Brennan: Corporate debt lowered the cost of our debt and extend the term which are all very important achievable.

Speaker Change: Initial goals for us as a company. So that's the update so with that let me turn it over to start with Brian.

Brannen McElmurray: Yes, thank you, Wes. And I'll refer to page 7 in the presentation. And I appreciate you all joining us this morning. As Wes so often says, affordable, clean, reliable power is the cornerstone of economic growth. And in that regard, a majority of the world is underserved. For our business, we seek to address that need by providing infrastructure solutions that are responsive to needs today with technology that supports a desired future. Puerto Rico is a great example of executing on that strategy.

Brian: Yes, thank you and I'll refer to page seven.

Brian: In the in the presentation.

Brian: And I appreciate you all joining us this morning, as what's often says affordable clean reliable power is the cornerstone of economic growth and in that regard. The majority of the world is underserved for our business, we seek to address that need by providing infrastructure solutions that are responsive to needs today with technology that supports the desired future Puerto <unk>.

Brannen McElmurray: As Wes said, we've been investing in Puerto Rico since 2017. We have a large and growing energy presence there. We've been growing our footprint and expanding our franchise for about six years. Today, our portfolio includes a world-class LNG terminal, which is the only terminal in the north where most of the population is, and the demand center, so it's perfectly positioned on the island. In addition, we have logistics assets, which include off-island logistics chains, which are ships both large and small, on-island logistics chains, which are trucks, ISOs, and, of course, our outstanding operational personnel and expertise.

Brian: <unk> is a great example of executing on that strategy as Wes said, we've been investing in Puerto Rico. Since 2017, we have a large and growing energy presence there and we've been growing our footprint and expanding our franchise for about six years.

Brian: Today, our portfolio includes a world class LNG terminal, which is the only terminal in the north where most of the population is in the demand centers. So it's perfectly positioned on the island. In addition, we have logistics assets, which include off island logistics chains, which are ships, both large and small on island logistics change which is trucked.

Brian: Isos and of course, our outstanding operational personnel and expertise. This logistics chain allows us to reach each and every customer on the island of Puerto Rico and services through our existing terminal.

Brannen McElmurray: This logistics chain allows us to reach each and every customer on the island of Puerto Rico and service them through our existing terminal. In terms of customer contracts, we initially started with a 25 TBTU contract for San Juan 5 and 6, which itself has generated hundreds of millions of dollars of savings for Puerto Rican ratepayers. On March 15th of this year, we entered into an 80 TBTU island-wide contract, which allows us to serve Palo Seco, San Juan incremental power plus additional sites, which fold into our strategy in terms of gasification around the island.

Brian: In terms of customer contracts. We initially started with a 25 <unk> contract for San Juan five and six which itself has generated hundreds of millions of dollars of savings for Puerto Rican ratepayers in March of <unk> March 15th of this year, we entered into an ADT Btu Island wide contract, which allows us to serve palisade goes.

Brian: San Juan incremental power, plus additional sites, which fold into our strategy in terms of gasification around the island. In total. This is a 105 <unk>, which is a significant portion of Puerto Rico's entire energy need, but it has room to grow from there and finally, we have our <unk> asset management.

Brannen McElmurray: In total, this is 105 TBTU, which is a significant portion of Puerto Rico's entire energy needs, but it has room to grow from there. And finally, we have our Hanera asset management platform, which today manages over 4,000 megawatts of installed power at 12 plants across the island. We have approximately 800 people, and we manage a budget of over $3 billion.

Brian: For them, which today manages over 4000 megawatts of installed power 12 plants across the island, we have approximately 800 people and we manage a budget of over $3 billion. In short. This particular platform allows us incredible visibility and also the ability to integrate with the transformational plan in Puerto Rico.

Brannen McElmurray: In short, this particular platform allows us incredible visibility and also the ability to integrate with the transformational plan in Puerto Rico as the asset base transforms from distillate to natural gas over time. These assets, together with our people and expertise, position us perfectly to execute on our priorities, of which we have two. One, accelerating the transition from distillates to natural gas. In short, as Wes mentioned earlier, this transformation would save Puerto Rican ratepayers billions of dollars a year. To put that in perspective, that's the equivalent budget for the Department of Education, and it spends on teachers every year.

Brian: As the asset base transforms from distillate to natural gas over time.

Brian: These assets together with our people and expertise position us perfectly to execute on our priorities of which we have two one accelerating the transition from distillate to natural gas in short as Wes mentioned earlier. This transformation would say, Puerto Rican ratepayers of $1 billion a year to put that in perspective, that's the.

Brian: Equivalent budget for the department of Education, and it spins on teachers every year. So this kind of savings year over year is incredibly impactful in this jurisdiction.

Brannen McElmurray: So this kind of savings year over year is incredibly impactful in this jurisdiction. The second priority is adding more reliable generation to the system. In addition to saving money, reliable generation allows us to also accelerate the transformation to renewables on the island and fundamentally take the asset base now, retire old and inefficient units, and replace them with natural gas-fired units that, over time, will support batteries and solar as the island transitions, consistent with its public policy, to a net zero grid.

Brian: The second priority is adding more reliable generation to the system. In addition to saving money what reliable generation allows us to do is to accelerate the transformation to renewables on the island and fundamentally take the asset base now retire old and inefficient units replace it with natural gas fired units that over time.

Brian: <unk> will support batteries and solar as the island transitions and consistent with its public policy to a net zero grid.

Brannen McElmurray: Put simply, NFE is uniquely positioned to drive the transformation of the Puerto Rican energy system because of its existing infrastructure, on the ground organization, and market knowledge. Turning to page 8, as Wes also mentioned, a majority of the power in Puerto Rico still runs on diesel and heavy fuel oil. This is a very unique situation for the U.S. and its territories.

Brian: Simply unique NFC is uniquely positioned to drive transformation of the Puerto Rican energy system because of the existing infrastructure on the ground organization and market knowledge.

Brian: Turning to page eight.

Brian: As we also mentioned a majority of the power in Puerto Rico still runs on diesel.

Brian: And heavy fuel oil. This is a very unique situation for the U S and its territories big picture less than 1% of the power on mainland U S runs on distillate versus approximately 60% in Puerto Rico. This energy mix for Puerto Rico contributes to its.

Brannen McElmurray: Big picture, less than 1% of the power in the mainland U.S. runs on distillate, versus approximately 60% in Puerto Rico. This energy mix for Puerto Rico contributes to it having the highest price for electricity and the worst..., you know, worst electricity in terms of service in the U.S. and its territories. This creates an incredible situation for NFE, and this opportunity we intend to, you know, push forward with our existing assets. Our goal here is to transform the grid from one that relies on diesel and HFO today to renewables and gas in the future. So how are we doing on that?

Brian: Having the highest price for electricity and the worst.

Brian: Worst electricity in terms of service in the U S and its territories. This creates an incredible situation for NFC and this opportunity we intend to push forward with our existing assets. Our goal here is to transform the grid from one that relies on diesel and <unk> today to renewables and gas in the future. So how are we do.

Brian: That in March we took that step by entering into an ADT Btu island wide contract as Wes mentioned, adding to our existing twenty-five TVT portfolio, bringing us to 105 TV to you. If you look at the graph on the left or the chart on the left hand side of the page. It's interesting to think about it from a demand perspective.

Brannen McElmurray: In March, we took that step by entering into an 80 TBTU island-wide contract, as Wes mentioned, adding to our existing 25 TBTU portfolio, bringing us to 105 TBTU. If you look at the graph on the left or the chart on the left hand side of the page, it's interesting to think about it from a demand perspective. We've bucketed our opportunity into four categories. First, gas now.

Brian: Bucket in our opportunity into four categories first gas now and those are assets that exist and Reno and gas exist could run on gas and just needed supply for example, the ADT Btu contract that we just entered into and some total that's one gigawatt.

Brannen McElmurray: And those are assets that exist and run on gas, or could run on gas, and just need supply. For example, the 80 TBTU contract that we just entered into, and some total, that's one gigawatt. The second category is gas ready, which are assets that today could run on gas.

Brian: The second category is gas ready, which are assets that today could run on gas.

Brannen McElmurray: But today they run on diesel and so need both infrastructure and a little bit of work on the units to make them gas ready. But these are projects that could be done in under six months. Today that's about 600 megawatts. Then there are additional conversion opportunities, which roll up to about 1 gigawatt. And as Wes mentioned, there are plans on the board and active steps being taken on the procurement side to build a new generation, partly responsible, Hinera's responsibility for about half, and then partly responsible for the P3 and an ongoing procurement.

Brian: But today run on diesel and Sony both infrastructure and a little bit of work on the units to make them gas ready, but these are projects that can be done in under six months. Today. That's about 600 megawatts. Then there are additional conversion opportunities, which roll up to about one gigawatt and as Wes mentioned their plans on the board and active.

Brian: Steps being taken on the procurement side to build new generation, partly responsible <unk> responsibility for about half and then partly responsible for the <unk> in an ongoing procurement, but altogether. This will rollout eventually to be about one gigawatt of additional power that'll be there long term this illustration.

Brannen McElmurray: But all together, this will roll up eventually to be about 1 gigawatt of additional power that will be there in the long term. This illustration to the right basically points out a very simple fact, which is once the distillates are pushed out of the system, which would also include coal that's being operated by a private operator, all in the chart on the left, including new generation, if dispatched at 80% is approximately 300 TBTUs for the island.

Brian: To the right basically points out a very simple fact, which is once the distillates are pushed out of the system, which would also include coal that's being operated by a private operator all in the chart on the left including New generation. If dispatch at 80% is approximately 300 TB to use for the island that encompasses today's demand and.

Brannen McElmurray: That encompasses today's demand and then where we expect and hope Puerto Rico will grow as its economy expands. The end state of this is we expect all oil and HFO power on the island to be retired, and the island to be powered simply by natural gas supplemented with solar and battery, and that is going to be Puerto Rico's future. Our business is perfectly positioned to capture this growth, and our job is to drive that transition as fast as possible.

Brian: And then where we expect and hope Puerto Rico will grow as their economy expands the in state of this as we expect all oil and <unk> power on the island to be retired and the island to be powered simply by natural gas supplemented with solar and battery and that is going to be Puerto Rico's future our biz.

Brian: <unk> is perfectly positioned to capture this growth and our job is to drive that transition as fast as possible. What is unique about Puerto Rico is there's complete alignment between our strategy public policy and just the sheer economics of what will happen and so this is simply a question of time and our job is to accelerate that time as fast as.

Brannen McElmurray: What is unique about Puerto Rico is that there is complete alignment between our strategy, public policy, and just the sheer economics of what will happen. And so this is simply a question of time, and our job is to accelerate that time as fast as possible and to convert these cash flows into long-term durable earnings that further increase the value of our franchise. Moving to page 9.

Brian: Possible and to convert these cash flows into long term durable, earning earnings that further increase the value of our franchise move.

Brian: Moving to page nine.

Brian: As Wes touched on we had an incredibly successful year last year from an installation and execution perspective by responding to a FEMA mandate to install emergency power. We built 425 megawatts of SaaS power across two sites. Both projects were done in less than a 120 days both based on two year contracts with.

Brannen McElmurray: As Wes touched on, we had an incredibly successful year last year from an installation and execution perspective by responding to a FEMA mandate to install emergency power. We built 425 megawatts of fast power across two sites. Both projects were done in less than 120 days, both based on two-year contracts with Weston and the Army Corps. Both projects were viewed as incredible success stories from our side, the federal government side, Puerto Rico's side, and the rate payer's side.

Brian: Western and the Army Corps, both projects are viewed as incredible success stories from our side the federal government side, Puerto Rico side and the repair side. This is a highly unique situation given the success of this project and given the real world on the ground impacts our contract ended on March 15th we then.

Brannen McElmurray: This is a highly unique situation given the success of this project and given the real-world, on-the-ground impacts. Our contract ended on March 15th. We then switched to a longer-term contract with the government of Puerto Rico for gas on the 16th of March, and on the same day, we sold the power plant to the government of Puerto Rico. So this 425 megawatts that started off as temporary power will effectively become permanent. Discussions are ongoing with Weston and the Army Corps on terms of our settlement.

Brian: Switched to a longer term contract with the government of Puerto Rico for gas on the 16th of March and on the same day, we sold the power plants to the government of Puerto Rico. So this 425 megawatts that started off as temporary power will effectively become permanent.

Brian: Discussions are ongoing with western and the Army Corps on terms of settlement they have been incredibly constructive and positive.

Brannen McElmurray: They've been incredibly constructive and positive. We're finalizing our claim submission, and the recovery is expected to be significant. Just for perspective, the gross amount owing under the remaining term for both contracts is over a billion, and we expect those discussions to progress and end constructively as well. Meanwhile, we continue to invest in Puerto Rico and expand our franchise there by adding essential infrastructure. These projects and the experiences they bring can be readily applied to other markets addressing similar challenges, creating opportunities for NFE and other jurisdictions seeking solutions to accelerate the energy transition and driving value for NFE as a solution provider and, of course, for our shareholders. I will now turn it over to Andrew to talk about Brazil.

We're finalizing our claims submission and the recovery is expected to be significant just for perspective, the gross amount owing under the remaining term for both contracts is over $1 billion and we expect those discussions to progress and constructively as well, we continue to invest in Puerto Rico and expand our franchise there by adding our central infrastructure.

Brian: These products these projects and the experience that they bring can be readily applied to other markets addressing similar challenges, creating opportunity for NFC and other jurisdictions seeking solutions to accelerate the energy transition and driving value to NFC solution provider and of course to our shareholders I will now turn it over to Andrew talk about Brazil.

Andrew Dete: Great. Thanks, Brennan. Thank you, everybody, for joining us this morning.

Andrew: Great. Thanks, Brendan Thank you everybody for joining us. This morning excited to be talking with you about Brazil, There's three main points I'm going to go through here. The first is an update on our two LNG terminals, which are now online.

Andrew Dete: I'm excited to be talking with you about Brazil. There are three main points I'm going to go through here. The first is an update on our two LNG terminals, which are now online, are contracted for the long term, and we're making rapid commercial progress. The second is to describe the near-term growth opportunity, mostly at our Santa Catarina terminal, around the announced power auctions in Brazil and growing LNG supply through that terminal. And then the third one is to update you on our capital plan for Brazil, which Wes mentioned a little bit.

Andrew: Our contracted for the long term and we're making rapid commercial progress. The second is described the near term growth opportunity, mostly at our Santa Catarina terminal around the announced power auctions, Brazil and growing LNG supply through that terminal and then the third one is to update you on our capital plan for Brazil, which Wes mentioned, a little bit so turning to page 11.

Andrew: <unk>.

Andrew: We've talked a few times about this in the last calls and updates, but just to kind of level set where we are in Brazil. Today. So in February returned on two LNG terminals one in <unk>, one in Santa Catarina, the Fsrus hooked up to the pipeline, we finalized commissioning and now we have 12 <unk> of LNG import capacity.

Andrew Dete: So turning to page 11, you know, we've talked a few times about this in the last calls and updates, but just to kind of set the level where we are in Brazil today. So in February, we turned on two LNG terminals, one in Bacarena and one in Santa Catarina. The FSRU is hooked up to the pipeline. We finalized commissioning, and now we have 12 MTPA of LNG import capacity in Brazil. That's over 600 million tons of carbon dioxide a year.

Andrew: <unk> in Brazil, that's over 600 GB to use a year.

Andrew Dete: We also have contracts for 2.2 gigawatts of contracted power with an average duration of 18 years and 50 TBTUs of baseload gas supply, also with an average duration of 18 years. That leads to 500 million contracted EBITDA on a run rate basis in 2026. And we have, you know, effectively completed our regional strategy of bringing critical infrastructure online for Brazil that would deliver on both the power and the energy needs of these regions and the country as a whole.

Andrew: We also have contracts for two two gigawatts of contracted power with an average duration of 18 years and 50 TV to use a base load gas supply also with an average duration of 18 years that leads to 500 million contracted EBITDA on a run rate 2026 basis, and we have effectively completed now are regional.

Andrew: <unk> bring your online critical infrastructure for Brazil that will deliver on both the power and the energy needs of these regions in the country as a whole.

Andrew Dete: Moving to page 12, we want to give you, you know, a little bit more of a deep dive on the Bacarena Terminal and how we're constructing the commercial portfolio here. So first, we have our Norsk Hydro agreement. So, a 15-year gas supply agreement that's fully started. We are ramping up that contract now as we commission each boiler and calciner in the alumina refinery for Norsk Hydro. We hope to expand. This is the sort of classic NFE project but done at scale.

Andrew: Moving to page 12, we want to give a little bit more of a deep dive on the Buck Arena terminal and how we're constructing the commercial portfolio here. So so first is our Norsk Hydro agreement. So 15 year gas supply agreement. That's fully started we are ramping up that contract now as we commission each boiler and calciner in the alumina refinery for North <unk>.

Andrew Dete: So, you know, we have benefits for Norsk Hydro in terms of cost, especially with a more volatile oil market. We've got benefits for North Kydro in terms of maintenance, because using gas versus distillate fuels is much cleaner. And then we've got huge benefits for the region on emissions and on local air quality. So we're seeing immediate benefits. You know, this is exactly what the mission of the company is, and we're really happy to be in this long-term agreement.

Andrew: And we hope to expand this is the.

Andrew: Sort of classic NFC project, but done at scale. So we have we have.

Andrew: Benefits for Norsk hydro in terms of cost.

Andrew: Especially with a more volatile oil market, we've got benefits Norsk hydro in terms of maintenance using gas versus distillate fuels is much cleaner and then we've got huge benefits for the region on emissions and on local air quality. So we're seeing immediate benefit.

Andrew: Exactly kind of what the mission of the company is and we're really happy to be in this long term agreement and we're working to expand and related power. The whole facility is our hope at some point in the future.

Andrew Dete: And we're working to expand and really power the whole facility is our hope at some point in the future. Second is the Baccarina Power Plant. So 630 megawatts, 25-year PPA. This project is about 60% complete under a fixed price, date certain EPC contract with Mitsubishi and Toyo Satal. That'll come online in July 2025.

Andrew: Second is the <unk> power plant to 630 megawatts 25 year PPA. This project is about 60% complete under a fixed price date, certain EPC contract with Mitsubishi and toys to tall that will come online in July 2025.

Andrew Dete: And then the third big contract here is the Porto Sen power plant, that's 1.6 gigawatts. So on December 23rd, 2023, we announced the acquisition of this PPA. Between December 23rd and, I think, March 17th, we effectively completed the transfer of this PPA from a state in Brazil called Serra to our site adjacent to the Bacarena terminal. We have also, during that time, signed a fixed price, date certain contract for construction with Mitsubishi and Andrade Gutierrez.

Andrew: And then the third big contract here is the <unk> power plant.

Andrew: That's one six gigawatts. So in December 23, 2023, we announced the acquisition of this PPA.

Andrew: Tween December 23rd in I think March 17, we effectively completed the transfer of this PPA from a state in Brazil called <unk> to our site adjacent to the Buck Arena terminal. We have also during that time sign fixed price date certain contract for construction with Mitsubishi and <unk> Gutierrez and we have financed the project at the asset level and started construction.

Andrew Dete: And we have financed the project at the asset level and started construction. So really rapid progress here in terms of being able to use our existing infrastructure to acquire this project and really begin construction. This will go online in July 2026, which is why you see most of our numbers kind of on a run rate 2026 basis when these three big contracts are online. We've also signed two other small contracts at the port for almost one TBTU, but important contracts to us with Imerys and Alobar, who are located right next to Norsk Hydro.

Andrew: <unk>.

Andrew: So really rapid progress here in terms of being able to use our existing infrastructure to acquire this project.

Andrew: And really begin construction. This will turn online in July 2026, which is why you see most of our numbers kind of on a run rate 2026 basis. When these three big contracts or online. We've also signed two other small contracts at the port for almost <unk>, but important contracts to us with emeritus and alloy bar who are.

Andrew: Located right next to Norsk hydro.

Andrew Dete: So just pausing on Bacarena for a second, and if you see the graph on the right, this is, for us, really the footprint of what a great LNG terminal looks like. We've got our terminal there in yellow at the top, so extended jetty on the FSRU.

Andrew: Just pausing on about granted for a second and if you see the graph on the right.

Andrew: This is really for us the footprint of what a great LNG terminal looks like we've got our terminal there in yellow at the top so extended Jedi in the Fsrus, we've got the Norsk Hydro facility on the right side of this page, where we're supplying gas long term and then we've got the two sites for building power that we owned for the left if you think about the overall portfolio composition.

Andrew Dete: We've got the Norsk Hydro facility on the right side of this page, where we're supplying gas long term. And then we've got the two sites for building power that we own to the left. If we think about the overall portfolio composition, we have one FSRU with six MTPA of capacity.

Andrew: We have one fsrus with fixed MTO MTP AF capacity, we've got 2.2 Gigawatts of power and we're basically today reserving for MTA of contracted LNG supply one MTA of that is for base load supply under the 18 year duration agreements that we've talked about and then <unk> of that is reserved for when these power plants dispatch.

Andrew Dete: We've got 2.2 gigawatts of power, and we're basically today reserving four MTPA of contracted LNG supply. One MTPA of that is for baseload supply under the 18-year duration agreements that we talked about, and then three MTPA of that is reserved for when these power plants dispatch, and that price is connected to the JKM spot price plus a very significant premium. And so this is really set up with a combination of baseload supply, contingent supply, and then long-duration fixed capacity fees from the power plants.

Andrew: And that price is connected to the <unk> spot price plus a very significant premium and so this is really set up with a combination of base load supply contingent supply and then long duration fixed capacity fees from the power plants.

Andrew Dete: For the new page 13, I want to provide an update on our Santa Catarina terminal. So, exciting developments here. First, we've signed our first commercial contract in Santa Catarina, which is with the Trans Bolivia Gas Pipeline System, which we refer to as TBG. We have signed up two different products with TBG.

Andrew: Flipping to page 13.

Andrew: Provide an update on our Santa Catarina terminal. So exciting developments here first is that we signed our first commercial contract in Santa Catarina, which is with the trends Bolivia gas pipeline system, which we refer to as T. BG. We have we've signed up to different products with TPG first is just baseload gas supply, which will be used in.

Andrew Dete: First is just baseload gas supply, which will be used in the pipeline system to run the compression. And then, second, is a really important thing that'll become more of a theme for us in South Brazil, which is that we're providing balancing to the pipeline system. So basically, on a daily basis, we will help the system inject gas to balance out customers, which basically, as they supply almost, I think it's 200 customers on the pipeline system, we'll be able to help them balance their daily needs against some of the domestic gas that's also in that system. So really providing the flexibility that's necessary for this pipeline system.

Andrew: The pipeline system to run the compression and then second is a really important thing that'll that'll become more of a theme for us in South, Brazil, which is we're providing balancing to the pipeline system. So basically.

Andrew: On a daily basis, we will help the system inject gas to balance our customers, which basically you know as they supply almost I think its 200 customers on the pipeline system will be able to help them balance their daily needs against some of the domestic gas. Its also in that system, so really providing the flexibility that's necessary for this.

Andrew Dete: The second big opportunity here is the announcement of the 2024 power auctions in Brazil. So those were announced in March for an August 30th auction, and they really represent a huge commercial opportunity for Santa Catarina and for the power system in the south of Brazil, which we'll talk about here on page 14. So Wes alluded to this a little bit, but Brazil is really, really unique for us because we can't find another market that has the following three things.

Andrew: Pipeline system.

Andrew: The second big opportunity here is the announcement of the 2024 power auctions in Brazil. So those were announced in March four on August 30th auction.

Andrew: And really represents a huge commercial opportunity for Santa Catarina and for the power system in the south of Brazil, which.

Andrew: We'll talk about here on page 14.

Andrew Dete: Majority intermittency, so Brazil is over 80% hydro and renewable. At scale, Brazil is over 200 gigawatts of grid, so I think it is the seventh largest electric grid in the world, and 200 million plus people. And then we can't find a market like this that is mostly intermittent, at a huge scale, and also continuing to grow. So on the right side of this page, you can see how overall energy consumption and natural gas consumption per capita really lag behind the developed world in a very significant way and represent a huge opportunity for Brazil to continue growing.

Speaker Change: So Wes alluded to this a little bit, but Brazil is really really unique for us because if we can't find another market that has the following three things majority intermittency, So Brazil is over 80% hydro and renewable.

Speaker Change: At scale, Brazil has over 200 gigawatt.

Speaker Change: So I think the seventh largest electric grid in the World 200 million plus people and then we can't find a market like this it is majority of intermittent at huge scale and also continuing to grow so on the right side of this page you can see how overall energy consumption in natural gas presumption per capita really lagged behind the developed world.

Speaker Change: And a very significant way and represent a huge opportunity for Brazil to continue growing.

Andrew Dete: So this really is the market setup as we head into these power auctions, and what we're going to see is that what we really need, and flipping to page 15, is we need a firm in Brazil. This page 15 shows not our forecast, but the actual Brazilian regulator forecast. There's a group called EPE, which does this work in Brazil.

Speaker Change: This really is the market set up as we head into these power auctions.

Speaker Change: And what we're going to see is that what we really need and flipping to page 15, as we need in Brazil firm capacity.

Speaker Change: This page 15 shows not our forecast, but the actual Brazilian regulator forecast Theres, a group called <unk>, which which does this work in Brazil, and what their forecast is a need for 20 gigawatts of firm power to be added to the grid by 2032, which includes eight gigawatts theyre going to be auctioned this year, what they do here as they forecast the retirement of the existing for empower.

Andrew Dete: And what they forecast is a need for 20 gigawatts of firm power to be added to the grid by 2032, which includes 8 gigawatts that are going to be auctioned this year. What they do here is forecast the retirement of the existing firm power. They forecast the growth in power consumption in the country, and they want to maintain a 5% grid reserve, which is pretty low.

Speaker Change: Are they forecasted the growth in power consumption in the country and they want to maintain a 5% grid reserve, which is pretty low and thats. What shows is 20 gigawatts of need.

Andrew Dete: And that shows this 20 gigawatts of need. Brazil has actually done an amazing job of responding to the needs of the power system, which is effectively, you know, they need firm capacity. They need insurance for the fact that as consumption grows and you have days where, you know, hydrocapacity and renewable capacity maybe aren't producing as much as you think, you have reliability. You know, Brannen mentioned it, but the things you need for economic growth are affordable and clean power, which Brazil has, you know, in spades. But what they really need to work on and what they're focusing on is reliability. So if we flip to page 16,

Speaker Change: Brazil has actually done an amazing job of responding to.

Speaker Change: The needs of the power system, which are effectively they need firm capacity they need insurance and in.

Speaker Change: And the fact that as consumption grows and heavier days, where hydro capacity in renewable capacity, maybe isn't producing as much as you think you have reliability Brandon mentioned, it but but the things you need for economic growth of our affordable and clean power, which Brazil has stayed but what they are.

Speaker Change: They need to work on them what they are focusing on is reliability.

Speaker Change: Flip to page 16.

Andrew Dete: The opportunity for us at NFE is really to provide that reliability in a really dedicated regional strategy from the Santa Catarina terminal. So today there are over three and a half gigawatts of existing power plants in the region that are connected to our pipeline system and do not have firm gas contracts or firm power contracts. NFE is also developing a number of greenfield sites that we will bid into the auction. But what we really want the message to be and for people to understand on this call is that the scarce resource here is incremental fuel supply and then flexible fuel supply.

Speaker Change: The opportunity for us at <unk> is really to provide that reliability and a really dedicated regional strategy from the Santa Catarina terminal. So today theres over three five gigawatts of existing power plants in the region that are connected to our pipeline system and do not have firm gas contracts or firm power contracts and if he is also developing a number of greenfield sites that we will get into.

Speaker Change: The auction, but what we really want the message to be in for people to understand on this call is the scarce resource here is incremental fuel supply and then flexible fuel supply in order to run. These capacity contracts you need to have power plants that can respond to the grid in a matter of hours.

Andrew Dete: In order to run these capacity contracts, you need to have power plants that can respond to the grid in a matter of hours. That is what our LNG terminals allow because we can store gas and supply it throughout this pipeline system on an almost instantaneous basis. And so we're providing something which is, you know, a new import point and, crucially, storage, which the grid in Brazil and especially in South Brazil does not have today. There's a reason that all these power plants do not have PPAs, and that's basically because they don't have fuel and they don't have flexible fuel.

Speaker Change: That is what our LNG terminals allow because we can store gas and supplier throughout this pipeline system on an almost instantaneous basis and.

Speaker Change: And so we're providing something which is a new important point and critically storage, which the grid in Brazil, and especially in South Brazil does not have today. There's a reason that all of these power plants do not have ppas and thats basically because they don't have fuel and they don't have flexible fuel and so thats what were going to provided Santa catarina. So what we believe happens in the auctions. This year is that they will.

Andrew Dete: And so that's what we're going to provide at Santa Catarina. So what we believe will happen in the auctions this year is that they will auction off eight gigawatts of new power contracts, all with 15-year terms for the new power plants and seven-year terms for existing power plants. We believe we can capture an opportunity of two and a half gigawatts. That will be both new-build power from NFV and also contracts where we supply gas to existing power plants for third-party owners. So that's what we have coming up in August of this year and what we're really positioning for the rapid development of the Santa Catarina terminal. Last page is page 17.

Speaker Change: <unk> eight gigawatts of new power contracts, all with 15 year terms.

Speaker Change: For the new power plants, and seven year terms for existing power plants.

Speaker Change: We believe we can capture an opportunity of two five gigawatts that will be both newbuild power from <unk> and also contracts, where we supply power.

Speaker Change: Sorry supply gas to existing power plants for third party owners. So that's what we have coming up in August of this year and what we're really positioning for the rapid development of the Santa Catarina terminal.

Andrew Dete: So I wanted to provide an update on our Brazil capital planning here. The unique thing we have in Brazil is we have a business that is highly contracted today. So 500 megawatts or 500 million of EBITDA on a 2026 run rate basis with just the contracts that we have today. And then we have a huge opportunity for growth. We think we can effectively double that with our Santa Catarina terminal and deliver almost 1 billion euros of EBITDA by 2028.

Speaker Change: The last pages page 17, so whenever we get an update on our Brazil capital planning here. The unique thing we have in Brazil is we have a business that is highly contracted today, so 500 megawatts or $500 million of EBITDA on a 2026 run rate basis with just the contracts that we have today and then we have a huge opportunity for growth. We think we can effectively double that with our syndicate.

Speaker Change: Arena terminal and deliver almost $1 billion of EBITDA by 2028, So we stand at a at a really important time for the business and what we want to achieve here is we want to capitalize the business for growth. We want to continue to grow very quickly when it continues to grow very capital efficiently and we have this opportunity we've been talking about the size of Brazil, the need for power capacity and then.

Andrew Dete: So we stand at a really important time for the business, and what we want to achieve here is to capitalise on the business for growth. We want to continue to grow very quickly, want to continue to grow capital very efficiently. And we have this opportunity. We've been talking about, you know, the size of Brazil, the need for power capacity, and then the really effective mechanism and local capital markets that make this attractive.

Speaker Change: The really effective mechanism and local capital markets that make this attractive. So we will look at a minority sale here in the near term and we'll also look at an IPO.

Andrew Dete: So we'll look at a minority sale here in the near term, and we'll also look at an IPO, you know, later in 2024 to help continue to capitalize this business and grow into the opportunity we see available in Brazil.

Speaker Change: Later in 2024 to help continue to capitalize this business and grow into the opportunity we see available in Brazil, Chris I'll flip to you. Thanks Andrew.

Christopher S. Guinta: I'll flip it to you. Thanks, Andrew. Good morning, everybody.

Chris: Everybody, let's let's flip to page number 19 and talk to the LNG projects on this slide we've included a recent photo of <unk> one offshore altamira in the positive news is we're in the absolute final stages of commissioning, we fully commissioned all safety systems power and utilities equipment, the gas treatment modules, LNG pumps, and the LNG transfer hoses and where.

Christopher S. Guinta: Let's flip to page 19 and talk through the FLNG projects. On this slide, we've included a recent photo of FLNG-1 offshore Altamira, and the positive news is we are in the absolute final stages of commissioning. We've fully commissioned all safety systems, power and utilities equipment, the gas treatment modules, LNG pumps, and the LNG transfer hoses, and we're working on the final system to be completed, which is the MR compressor. I do want to take a moment and confirm that we did experience an incident with a pipe fracture inside of our cold box last Friday, April 26th.

Speaker Change: We're working on the final system to be completed which is EMR compressor.

Speaker Change: I do want to take a moment and confirm that we did experienced an incident with a pipe fracture inside of our cold box last Friday April 26. This is an extremely unfortunate given that we're expecting first LNG a mere 72 hours later.

Christopher S. Guinta: This is extremely unfortunate given that we were expecting the first LNG a mere 72 hours later. The pipe incident caused the box's insulation material, a non-toxic volcanic sand called perlite, to be emitted all over the rig. Thankfully, no significant injuries were sustained, and as a result of our excellent team in the field, as well as our preventative measures, together ensured that no adjacent systems were damaged. While the incident looked like it was much more extensive than it actually was, on account of the perlite dusting, the damage was isolated to one pipe and manifold within the box and is expected to be repaired by next weekend.

Speaker Change: The pipe incident caused the boxes installation material a nontoxic volcanic sand called Pearl eight to be admitted all over the rigs.

Speaker Change: Thankfully no significant injuries were sustained and as a result of our excellent team in the field as well as our preventative measures together ensure that no adjacent systems were damaged.

Speaker Change: While the incident looked like it was much more extensive than it actually was on account of the perlite dusting. The damage was isolated to one pipe and manifold within the box and is expected to be repaired by next weekend. This.

Christopher S. Guinta: This is why commissioning is so important and why we've invested in excellent partners that have been overwhelmingly supportive as we try to move through the balance of the commissioning work and produce LNG. Moving on to slide 20, we talk about why we chose to in-source the production of LNG and demonstrate the value of the FLNG-1 asset. We estimate the value of the FLNG-1 unit exceeds $3 billion. This value is built up by a combination of one, the cost to replicate the liquefier, and two, the time value of having production in today's still elevated market for global LNG.

Speaker Change: This is why commissioning is so important and why we've invested in excellent partners that have been overwhelmingly supportive as we try to move through the balance of the commissioning work and produce LNG.

Speaker Change: Moving on to Slide 20, we talk about why we chose to in source the production of LNG and demonstrate the value of the <unk> asset we estimate the value of <unk>. One the unit exceeds $3 billion. This value is built up by a combination of one the cost to replicate the liquefy are and to the time value of having.

Speaker Change: <unk> and today is still elevated market for global LNG.

Christopher S. Guinta: We have talked with various EPC firms about what it would cost for a fully wrapped LNG project at a similar size, and we've been provided with a range of $1,300 to $1,500 per ton, excluding storage. This is just the cost paid to the EPC firm and does not include all of the project support expenses such as permitting, environmental studies, SG&A overheads, and, of course, interest earned during construction.

Speaker Change: We have talked with various EPC firms on what it would cost for a fully wrapped LNG project at similar size and we've been provided a range of 300 to $500 per ton. Excluding storage. This is just the cost paid to the EPC firm and does not include all of the projects support expenses, such as permitting environmental studies, SG&A overheads and of course interest bearing <unk>.

Speaker Change: Structure.

Christopher S. Guinta: The second reason is the fact that NFE's FLNG asset will produce approximately 280 TBTUs, or a little more than 90 cargoes, over the next four years, which is when the majority of the projects recently FID'ed will come online. The value of this LNG sold into the current market is worth another $1 billion. So when you combine the $2 billion paid to the EPC with the carrying cost of developing the asset and the time value of LNG now, you have an asset worth well in excess of $3 billion. Let's flip to the next slide and talk about this in a little bit more detail.

Speaker Change: The second reason is the fact that <unk> LNG asset will produce approximately 280 TVT us we're a little more than 90 cargoes over the next four years, which is when the majority of the projects recently <unk> will come on line the value of this LNG is sold into the current market is worth another $1 billion.

Speaker Change: So when you combine the 2 billion paid to the EPC with the carrying cost of developing the asset and the time value of LNG now you have an asset worth well in excess of $3 billion.

Speaker Change: Let's flip to the next slide and talk about this with a little bit more detail.

Christopher S. Guinta: On slide 21, in last quarter, we talked about how the LNG supply market is dominated by investment-grade participants, and our FLNG solution is intended to be responsive to the needs of our customers now. As a result, NFE built an asset that has meaningful near-term cash flows, as well as provides us with long-term operational confidence. The graph on this page shows the value of having LNG production in the current market as opposed to an ordinary course SPA, which is priced around 115% Henry Hub plus $250.

Speaker Change: On slide 21 in last quarter, we talked about how the LNG supply market is dominated by investment grade participants and RF LNG solution is intended to be responsive to the needs of our customers now as a result, and if you've built an asset that is meaningful near term cash flows as well as provides us long term operational confidence the graph on this page shows the value of having LNG production.

Speaker Change: The current market as opposed to an ordinary course, SBA, which is priced around 115% of Henry hub plus $2 50.

Christopher S. Guinta: Over the next four years, which is about when a new SPA would begin providing cargoes to the buyer, our first fast LNG unit will produce around 280 TBTUs of supply worth an estimated $1 billion using the forward TTF price less shipping. The sheer in-the-money value of the LNG is remarkable, but the operational benefits are also important to recognize. First, it gives us certainty of supply and ensures that we are not at the behest of producers with competing interests.

Speaker Change: Over the next four years, which is about when a new SBA would begin providing cargoes to the buyer or first fast LNG unit will produce around 280 <unk> use of supply worth an estimated $1 billion using the forward TGF price less shipping this year in the money value of the LNG is remarkable but the operational benefits are also important to recognize.

Speaker Change: First it gives us surety of supply and ensures that we are not at the behest of producers with competing interests second it provides increased flexibility to manage supply and demand imbalances at our terminals and third our location should see should see increased uptime as opposed to U S. Gulf projects that have weather and congestion to contend with.

Christopher S. Guinta: Second, it provides increased flexibility to manage supply and demand imbalances at our terminals. And third, our location should see increased uptime as opposed to U.S. Gulf projects that have weather and congestion to contend with. So move to slide 22, and this is designed to share with you our plans for the FLNG capital structure moving forward. Our goal is to finance the assets on a secured basis with a project bond similar to what has been done in other LNG projects in the past.

Speaker Change: So move to slide 22, and this is designed to share with you our plans for the LNG capital structure moving forward. Our goal is to finance the assets on a secured basis with a project bonds similar to what's been done in other LNG projects in the past granted it made sense to finance the asset on balance sheet using corporate debt, while it was under development, but we feel that this will be a.

Christopher S. Guinta: Granted, it made sense to finance the asset on balance sheet using corporate debt while it was under development, but we feel that this will be a better solution for us. We are targeting $1.5 to $1.75 billion in proceeds, which represents a low loan-to-value given the asset exceeds $3 billion, as we outlined on slide 20. This furthers the three primary objectives listed on this slide.

Speaker Change: A better solution for US we are targeting one five to $1 75 billion in proceeds which represents a low loan to value given the asset exceeds $3 billion as we outlined on slide 20. This furthers. The three primary objectives listed on this slide first the financing structure will provide longer term with little or no amortization in order to match the tenor.

Christopher S. Guinta: First, the financing structure would provide longer terms with little or no amortization in order to match the tenor with the asset life. Second, the lower loan-to-value on an operational asset with a fixed cash flow stream should yield a lower borrowing cost than the corporate parent. And third, given that right now this asset is pledged to Terminal B in the revolving credit facility, we would pay off both of these upon a successful financing, thus lowering our corporate debt.

Speaker Change: With the asset life second the lower loan to value on an operational asset with fixed cash flow stream should yield a lower borrowing costs in the corporate parent.

Speaker Change: And third given that right now this asset has pledged to the term loan b and the revolving credit facility, we would pay off both of these upon a successful financing thus lowering our corporate debt. This financing model building with on balance sheet financing using corporate debt and then refinancing with asset level bonds. It's a path we intend to deploy in a similar fashion on future LNG projects.

Christopher S. Guinta: This financing model of building with on balance sheet financing using corporate debt and then refinancing with asset-level bonds is a path we intend to deploy in a similar fashion on future FLNG projects. So now, let's move to slide 24 and talk about the financial results for the first quarter. Total operating margin was $350 million from sales to customers through our downstream terminals, and we had another $34 million of operating margin from the ship segment.

Speaker Change: So now let's move to slide 24, and talk about the financial results for the first quarter.

Christopher S. Guinta: The $34 million in ship's operating margin will be mostly flat for the balance of the year and then go down to 2025. When you back out SG&A, our adjusted EBITDA for the first quarter was $340 million. The majority of the change from Q4 2023 is a decrease in the ship's margin, as well as the early termination of the FEMA contract. We're happy to report that, as has been the case, in all of the second half of 2023, we had no material sales from open market cargoes.

Speaker Change: Total op margin was $350 million from sales to customers through our downstream terminals and we had another $34 million of operating margin from the ship segment. The $34 million of ships operating margin will be mostly flat for the balance of year and then it goes down in 2025, when you back out SG&A, our adjusted EBITDA for the first quarter was $340 million the majority of that.

Speaker Change: <unk> from Q4 2023 as a decrease in the ships margin as well as the early termination of the FEMA contract. We're happy to report that has that as has been the case in all of the second half of 2023, we had no material sales from open market cargos all of the earnings are coming from our downstream customers through our terminals our vessels.

Christopher S. Guinta: All of the earnings are coming from our downstream customers through our terminals or vests. Move to slide 25, and this shows GAP's net income for the quarter, which was $54 million or $0.26 per share on a diluted basis. However, as Wes mentioned, this does include some noise associated with a loss incurred on the sale of the turbines to PREPA. So when you add back the non-recurring charges, it results in a net income for the quarter of $138 million, or $0.67 per share.

Speaker Change: Move to slide 25, and this shows GAAP net income for the quarter, which was $54 million 26 per share on a diluted basis. However, as Wes mentioned and this doesn't include some noise associated with the loss incurred on the sale of the turbines to PREPA. So when you add back the nonrecurring charges that results in net income for the quarter of $138 million or <unk> 67.

Speaker Change: Per share the funds from operations for the first quarter was $189 million or <unk> 92 per share when backing out the nonrecurring losses as mentioned in the bullet on the right. The bulk of the non recurring charges related to the sale of the turbines to PREPA and part of the termination of the <unk> as part of the termination of the emergency power contract as a refresher we sold 14 TM 'twenty.

Christopher S. Guinta: The funds from operations for the first quarter were $189 million, or $0.92 per share when backing out the non-recurring losses. As mentioned in the bullet on the right, the bulk of the non-recurring charges are related to the sale of the turbines to PREPA as part of the termination of the emergency power contract. As a refresher, we sold 14 TM2500s for a total price of $303 million. Of the units sold, NFE owned 11 and purchased 3 of the units that we were leasing.

Speaker Change: 500 for a total price of $303 million.

Speaker Change: The units sold in the owned 11 and purchased three of the units that we releasing the way the accounting treatment applies here is we have to include a cost basis and the turbines that we own plus the purchase and pay off of lease obligations. Additionally, we included some maintenance obligations in the carrying value all of this leads to a loss of $78 million recognized in the quarter.

Christopher S. Guinta: The way that the accounting treatment applies here is that we have to include a cost basis for the turbines that we own, plus the purchase and payoff of lease obligations. Additionally, we included some maintenance obligations in the carrying value. All of this leads to a loss of $78 million recognized in the quarter and will be further detailed in the 10-Q filed later this afternoon.

Speaker Change: We further detailed in the 10-Q filed later this afternoon.

Christopher S. Guinta: Finally, when we settle out the remaining components of the claim in Puerto Rico, as Brannen and Wes discussed, those proceeds will be recognized in earnings. And quickly on slide number 26, a comment about our financing strategy for the rest of the year. Now that terminal development has been virtually complete, and FLNG has been successfully deployed and is soon to be operational, we are focusing on financing assets at the project level and using proceeds to reduce corporate debt.

Speaker Change: Finally, when we settle out the remaining components of the claim of Puerto Rico, as Brandon and West discussed those proceeds will be recognized in earnings.

Speaker Change: And quickly on slide number 26, a comment about our financing strategy for the rest of the year now of the terminal development is virtually complete and <unk> has been successfully deployed and soon to be operational we are focusing on financing asset to the project level and using proceeds to reduce corporate debt, we met with the rating agencies over the past couple of weeks and we will work with them in a review and update of our corporate credit rating, which we.

Christopher S. Guinta: We met with the rating agencies over the past couple of weeks, and we will work with them and update our corporate credit rating, which we believe should sit squarely in the double B to double B plus range with a strong path to improvements over the next 12 to 18 months. As such, our goals are one, to get upgraded and refinance the $875 million notes due 2024, pushing out the near-term maturities, and two, to execute on the previously mentioned rated bond deal secured by FLNG1 asset with estimated proceeds of $1.5 to $1.75 billion, which we will use to repay terminal B in the revolving credit facility. This ensures we have a fully funded capital plan with robust free cash flow generation and sound financial policy.

Speaker Change: Believe should we sit and sit squarely in the double B double B plus range with a strong path to improvements over the next 12 to 18 months.

Speaker Change: As such our goal is to one get upgraded and refinance the $875 million notes due 2020 for pushing out near term maturities and to execute on the previously mentioned rated bond deal secured by <unk> assets with estimated proceeds of one five to $1 5 billion, which we will use to repay the terminal b in the revolving credit facility. This insurers.

Speaker Change: We have a fully funded capital plan with robust free cash flow generation and sound financial policy.

Wesley Robert Edens: That'll turn the call over to Wes for some comments. Great. I mean, that's the update.

Speaker Change: Now I will turn the call over to.

Speaker Change: West for so Paulo.

Wesley Robert Edens: Great, I mean, so that's the update. It's been an incredible quarter for us and an incredible time in the life of the company. We're all very focused on our core initiatives, as we've just detailed. This will be the most productive summer of our lives if we continue to achieve what we're focused on in the very near term.

West: I mean, that's the update I have spent an incredible quarter for US is incredible time in our life as a company.

West: All very focused on our core initiatives as we've just detailed this will be the most productive some of our lives we continue.

West: Achieve or focused on very near term. There is one additional adjacencies is worth mentioning that we're also focused on is perhaps no need or no no greater growth needed in the world than Datacenters and there is no greater need and the data centers for core <unk>.

Wesley Robert Edens: There's one additional adjacency that's worth mentioning that we're also focused on. There's perhaps no greater growth need in the world than data centers, and there's no greater need in data centers for core dispatchable power. Power is a core competency of ours. Rapid development of highly reliable power is what we do extremely well and have demonstrated that in a number of markets. We've received numerous reverse inquiries in our core markets in Puerto Rico, Brazil, and Ireland in situations where people are looking for us to help provide the solution to allow them to develop data centers. There's nothing to report today, but stay tuned for more on this.

West: This festival power power as a core competencies of ours rapid development of highly reliable power is what we do extremely well and have demonstrated that a number of markets. We received numerous reverse inquiries in our core markets in Puerto Rico, and Brazil and in Ireland.

West: Situations, where people are looking for us to help provide the solution to allow them to develop the data centers theres nothing to report today, but stay tuned on this.

Wesley Robert Edens: This could evolve into a direct adjacency of our core capabilities, and we're very focused on this opportunity. The company or companies that help solve these needs will benefit greatly. We're clearly focused on our core businesses. This is a direct adjacency that we think will also have a material impact on us in the future. This is just something I wanted to highlight. Now I'm going to turn it over to Chancellor for questions.

West: Moving to a direct adjacency to our core capabilities and we're very focused on this opportunity.

West: The company or companies that help solve these needs will benefit greatly we're clearly focused on our core businesses. This is a direct adjacency that we think also has material impact for us in the future. This is just not something I want to highlight that I will turn it over a chance for questions.

Speaker Change: Thank you operator, if you would open the lines up for questions.

Operator: Thank you, sir. If you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star 1 to ask a question. And we'll take our first question from Craig Shere on the Tui Brothers. Please go ahead, your line is open.

Speaker Change: Thank you Sir if you would like to ask a question. Please signal by pressing star one on your telephone keypad.

Speaker Change: A speaker phone please make sure to mute your mute function is turned off to allow your signal to reach our equipment.

Speaker Change: Again press Star one to ask a question.

Speaker Change: And we'll take our first question from Craig Shere with Tuohy Brothers. Please go ahead. Your line is open.

Wesley Robert Edens: Hi, good morning. Thanks for taking the question. Can your incremental Puerto Rico growth beyond the 80 TBTU PREPA contract also be linked to liquid fuel pricing to afford acceptable spreads during sustained elevated LNG market pricing? And can you update us on current spot LNG spread to perhaps 73% of landed Puerto Rican diesel? And finally, any thoughts on hedging out LNG to liquid spread risk?

Craig Shere: Hi, good morning, Thanks for taking the questions.

Craig Shere: So can you incremental Puerto Rico growth beyond the 80, <unk> PREPA contract.

Craig Shere: <unk> linked to liquid fuel pricing to afford acceptable spreads during sustained elevated LNG market pricing and can you update us on current spot LNG spreads to perhaps 73% of blended Puerto Rican diesel and finally any thoughts on hedging out.

Craig Shere: LNG liquid LNG to liquid spread risk.

Wesley Robert Edens: You know, I'll let Brannen talk about it specifically, but the nature of the conversation with Puerto Rico about this contract was basically, during this interim period where they want to switch fuels and benefit from that, while looking to enter into longer-term contracts, they want to make sure that they had a contract that ensured them savings. And so linking it directly to diesel was the simplest and most direct way of doing so.

Craig Shere: I'll, let Brian talk about it specifically, but the.

Craig Shere: The nature of the conversation with Puerto Rico about this contract was to basically during this interim period, where they want to switch fuels and benefit from that while looking to enter into longer term contracts. They want to make sure that they had a contract that ensure them savings and so lagging or directly to diesel was the simplest and most direct way of doing so.

Wesley Robert Edens: So 73% of diesel today, diesel is roughly $20; 73% is roughly $15. So $15 represents a significant savings versus what they're spending on diesel today and also represents significant margins for us relative to our business. Our view is that this is something that will actually be the correct algorithm and the right way to price this in the short term over this next, you know, four-year transition period. But I would expect long-term contracts for new developments to be directly Enrihub-based.

Craig Shere: So 73% of diesel today diesel is roughly $20, 73% is roughly $15. So $15 represents a significant savings versus what they're spending on diesel today and it also represents significant margins for us relative to our business. Our view is that this is something that will actually is the correct all of it.

Craig Shere: And the right way to prices in the short term over this next four year transition period, but I would expect long term contracts for new developments would be direct Henry hub base and so that's what I think we expect and Thats, what <unk> expect and it's the same basic pattern of.

Wesley Robert Edens: And so that's what I think we expect, and that's what you all should expect. And it's the same basic pattern of transition as how we go from a short-term contract to provide gas and power. That was a very, very good contract for us with FEMA. We now provide twice as much fuel as we did to them at a lower price, but, you know, the P times Q, the quantity is greater, so there's more volumes to run through that.

Craig Shere: Transition of how we go from a short term contract to provide gas and power. There was a very very good contract for us with FEMA. We now provide twice as much fuel as we did to them at a lower price, but the P times Q. The quantity is greater so theres more volume to run through that and then as they expand their needs around the Isle.

Wesley Robert Edens: And that as they expand their needs around the island and actually look to longer-term generation, we would expect that to expand even more. As Brannen said, it's 300 TBQs in total demand right now, which is roughly 3x what we have. So without knowing exactly how much of that will get converted and when it will get converted and what it is, all you can say is that it's 300% of what the current capacity is today, so it represents a meaningful increase to it. Brannen, do you have any thoughts about that?

Craig Shere: <unk> and actually look to longer term generation, we would expect that to expand even more as Brian said, it's 300 TVD using total demand right now which is roughly three actually we have so without knowing exactly how much of that will get converted and we know we can convert and what it is all you can say is that it's 300% of what the current capacity is today as it represents.

Craig Shere: A meaningful increase Brian do you have thoughts about that.

Brannen McElmurray: I think you've captured it perfectly. Maybe just the two quick ones, and then I think I'll hit one of your points.

Brian: I think that captures it perfectly maybe just two quick ones and then.

Brian: I think one of them.

Brannen McElmurray: First of all, a more macro point, which I think is kind of highly relevant here, particularly when you think about the 300 TBTU. For the first time in probably 10 years, the official estimates for GDP growth and population growth in Puerto Rico are being revised up, you know, basically from flat to maybe even slightly negative to now positive, not indifferent, you know, not that much different than what other people are seeing, but a tremendous opportunity for them.

Brian: Your points.

Brian: First of all more and more macro point, which I think is kind of highly relevant here, particularly when you think about the 300 <unk> for the first time actually in probably 10 years.

Brian: The official estimates for GDP growth.

Brian: And population growth in Puerto Rico are being revised up.

Brian: Basically from flat to maybe even slightly negative to now positive not indifferent not that much different than what other people are seeing but are tremendous.

Brian: So really a tremendous opportunity for them because even if you kind of think about our plans in terms of generation that exists today in transformation et cetera. Most of that historically been based on flat kind of projections going forward, but you can certainly imagine now what will happen as the place grows you need more power in particular you need more.

Brannen McElmurray: Because even if you kind of think about our plans, in terms of generation that exists today and transformation, etc., most of that, you know, has historically been based on flat kind of projections going forward. But you can certainly imagine now what will happen, you know, as the place grows, you need more power, and in particular, you need more gas firepower. So specifically, I think what you're asking about and actually what Wes indicated, the current contract for 80 TBTUs, which is really a four-year contract, one year with, you know, a few extension periods, which will, you know, certainly get exercised in my view. What that really supports is the current fleet as it's being transitioned.

Brian: Gas firepower, so specifically I think what you're asking about next year, what Wes indicated the current contract for ADT to use which is really a four year contract one year with few extension periods, which will.

Brian: Certainly get exercised in my view.

Brian: What that really supports us the current fleet as its being transition, but as <unk> also mentioned the idea and they're taking action on it. They are building now long term power. So you could certainly imagine this diesel index over time migrating to a Henry hub index and potentially even migrating to something.

Brannen McElmurray: But as Wes also mentioned, you know, the idea and they're taking action on it; they are building now for long-term power. So you can certainly imagine this diesel index, over time, migrating to a Henry Hubb index and potentially even migrating to something that resembles more of a fixed price concept. In particular, because you raised it on the hedging, we have started conversations with them about that. They are deeply interested in it.

Brannen McElmurray: That resembles more of a fixed price concept in.

Christopher Guinta: In particular, because you raised it on the hedging we have started conversations with them about that they are deeply interested in and I think the idea here is.

Brannen McElmurray: And I think the idea here is, you know, if you're buying 25 years of solar on fixed PPAs, you might start to think about, you know, buying 25 years of gas on a fixed price basis. So that's, conceptually, certainly something that, you know, will likely be discussed. But I think in particular, you know, we expect there to be growth beyond the 80 TBTU. As Wes said, it will likely be the Henry Hubb index.

Brannen McElmurray: You are buying 25 years of solar on fixed Ppas, you might start to think about buying 25 year gas on a fixed price basis. So that's conceptually certainly.

Brannen McElmurray: Something that.

Brannen McElmurray: We'll likely be discussed, but I think in particular, we expect there to be growth beyond the ADT Btu as Wes said, it will be likely Henry hub index, but is that.

Brannen McElmurray: The whole energy.

Brannen McElmurray: But as the whole energy, you know, complex moves to really gas plus renewables, what they're also trying to do, you know, is get long-term price certainty, because that really supercharges the growth proposition on the island.

Brannen McElmurray: Complex moves to really gas plus renewables, what they're also trying to do.

Brannen McElmurray: Long term price certainty.

Brannen McElmurray: Because that really for them supercharging the growth.

Brannen McElmurray: Proposition on the island.

Brannen McElmurray: Okay.

Wesley Robert Edens: Thanks. If I could just fit in one more quickly,

Speaker Change: Thanks, if I could just fit in one more quickly.

Wesley Robert Edens: From an adjusted EBITDA standpoint thoughts on how to treat proceeds from settlement of the early FEMA contract end and excluding that is it fair to envision a U shape EBITDA performance.

Wesley Robert Edens: From an adjusted EBITDA standpoint, thoughts on how to treat proceeds from settlement of the early FEMA contract end and exclude that. Is it fair to anticipate a U-shaped EBITDA performance as the lost FEMA contract is filled in over an extended period of time with the ADT-TBTU FEMA contract growing an error contribution and then the 630 megawatt park arena Brazilian plant and finally Nicaragua?

Wesley Robert Edens: As the loss FEMA contract, there's still been over an extended period of time.

Wesley Robert Edens: IDT <unk> FEMA contract growing and Eric contribution and then the 630 megawatt Park Arena Brazilian plant and finally in Nicaragua.

Wesley Robert Edens: The bulk of the money in a settlement would be earnings, right, simply. There is some that could be a return of capital for certain things that we have paid for and whatnot, but the bulk of the settlement would be expected to be earnings.

Wesley Robert Edens: The bulk of the money in the settlement would be earnings right simply there is some that could be a return of capital for certain things that we have a paid for and whatnot, but the bulk of the.

Wesley Robert Edens: The settlement would be expected to be earnings with respect to the U shape of it. It really is a function of how rapidly the transformation happens in terms of.

Wesley Robert Edens: With respect to the U-shape of it, it really is a function of how rapidly the transformation happens in terms of switching fuels from distillate fuels to gas. That is a multi-month process, not a multi-year process. As Brannen did a great job of kind of outlining, there is significant amounts of power on the island today that is gas-ready that can simply be hooked up and just needs re-gas capacity and maybe some very, very modest capital improvements that can burn gas today.

Wesley Robert Edens: Switching fuels from distillate fuels to gas that has a multi month process not a multiyear process.

Wesley Robert Edens: <unk> did a great job of kind of outlining there is significant amounts of power on the island today that is gas ready that actually you can simply be hooked up and just means re gas capacity and maybe some some very very modest capital improvements that can burn gas today, but all of that's going to happen in a relatively short period of time and with respect to the U shaped with the rest of the company, it's a little harder.

Wesley Robert Edens: But all of this can happen in a relatively short period of time. And with respect to the U-shape with the rest of the company, it is a little harder to predict because there are some massive other issues that could happen in the short term, in particular the developments in Brazil, turning this stuff on in Nicaragua, et cetera. So I recognize that actually modeling the company during this period of transition is difficult, and so we try to give as much guidance as we can.

Wesley Robert Edens: Two two predicted because simply there are some massive other issues that could happen in the short term in particular, the developments in Brazil, turning to Stefan Nicaragua et cetera, So I recognize that actually modeling the company. During this period of transition is difficult and so we've tried to give as much guidance as we can you'll probably a quarter away from being able to get.

Wesley Robert Edens: You are probably a quarter away from being able to get country-by-country data, which will make the modeling exercise much, much simpler. The one thing I can say with great certainty is that, in any model result, it looks like the valuation proposition of what we have on the books today, not prospectively, is vastly greater than the sum of the parts in the capital structure today. So I think that A will be much, much simpler to model once all this transition is completed. That's why we are so positive about the events in Puerto Rico and elsewhere.

Wesley Robert Edens: To provide.

Wesley Robert Edens: By country data, which will make the modeling exercise much much simpler the one thing I can say with great certainty as in any model result, it looks like the valuation proposition of what we have on the books today, not prospectively is vastly greater than the sum of the parts and the.

Wesley Robert Edens: In the capital structure today, so I think I.

Wesley Robert Edens: I think that there'll be much simpler to model once all of this transition is completed that's why we're so positive about the events in Puerto Rico and elsewhere, but if you just look at the numbers the numbers that Andrew I went through in Brazil. These are not theoretical forecast. These are not theoretical growth numbers. These are actually in place.

Operator: But all you have to do is look at the numbers. The numbers that Andrew went through in Brazil, these are not theoretical forecasts. These are not theoretical growth numbers; these are actual cash flows on existing assets. And we forecast these over the next couple of years. We're really showing them on a direct basis. So when you add those to our current business, it doesn't look to me like there's a U to it at all.

Operator: Cash flows on existing assets. So we forecast. These over the next couple of years, we're really showing them actually on a direct basis. So when you add those into our current business. It doesn't look to me like there's a youtube. It at all so I think timing differences over a quarter or two it can happen, but certainly over a.

Operator: So I think timing differences over a quarter or two could happen, but certainly over a one- or a two-year period, we think there is nothing but upside to our numbers from this point, both in terms of size but also in terms of duration. And ladies and gentlemen, we will move to our next question comes from, with Barclays. Please go ahead. Good morning.

Barclays: One or two year period, we think there is nothing but upside to our numbers from this point both in terms of size, but also in terms of duration.

Operator: And ladies and gentlemen, we will move to our next question comes from Theresa Chen with Barclays. Please go ahead. Your line is open.

Operator: And ladies and gentlemen, we will move to our next question. It comes from Teresa Chen with Barclays. Please go ahead, your line is open.

Brannen McElmurray: Yeah, sure. This is Brannen.

Teresa Chen: Good morning.

Brannen McElmurray: Wanted to follow up on the Puerto Rico side as far as what is the.

Teresa Chen: Timeline and pathway near term to bring them to the ADT can you can you give us an indication.

Teresa Chen: What the volumes are.

Brannen McElmurray: Okay.

Brannen McElmurray: Okay.

Brannen McElmurray: Yes.

Brannen McElmurray: I think, as Wes said, and I think actually the slide, in my view, actually lays it out well, even from a modeling standpoint. You know, if you kind of just start with the basics for what we have today, which is 25 TBTU going into San Juan five and six, and then you look at the temporary power that has now really been converted to permanent power, which all in is 425 megawatts that exists today.

Brannen McElmurray: Sure. This is.

Brannen McElmurray: Brendan.

Brannen McElmurray: As Wes said and I think actually the slide I mean.

Brannen McElmurray: In my view actually laid that out well given from a modeling standpoint.

Brannen McElmurray: If you kind of just start with the basics for what we have today, which is 25 <unk> going into San Juan five and six and then you look at.

Brannen McElmurray: The temp power that is now really been converted to permanent power, which all in.

Brannen McElmurray: It's 425 megawatts.

Brannen McElmurray: And then if you look at the existing assets that are in Palo Seco, and then you look at the opportunity, for example, in Mayaguez, and to add supplemental power, depending on the month, you want to pick and, you know, depending on, you know, how you want to kind of model that in the way I kind of think about it, you're likely to get there certainly by the end of the year, and then, on But depending on how you want to, you know, kind of think about that, I think the drivers of timing, you know, that you, you know, on our side, we're obviously racing to settle quickly are a little bit of infrastructure, you know, a little bit of logistics around asset movement, and then, of course, finalizing, you know, permits and permissions that you might need to increase utilization at some of these sites.

Brannen McElmurray: That exists today and then if you look at.

Brannen McElmurray: The existing assets that are in palisade co and then you look at the opportunity for example in <unk> and to add supplemental power.

Brannen McElmurray: Depending on the month, you want to pick and depending on how you want to kind of model that in the way I kind of think about it as you are likely to get there certainly by the end of the year and then.

Brannen McElmurray: On a ramp rate that starts off at 20, plus 30 50 going to 80 over the next quarter and a half but depends on how you want to kind of think about that I think the drivers of timing.

Speaker Change: Got you.

Brannen McElmurray: On our side, we're obviously racing to settle quickly are a little bit of infrastructure, a little bit of logistics around asset movement, and then of course finalizing permits and permissions that you might need to increase utilization at some of these sites, but all of these are things that are in progress I would say there.

Brannen McElmurray: But all of these are things that are, you know, in progress. I would say they're just very ordinary course events from a development perspective. And if you look at our history in Puerto Rico, we've obviously been highly successful getting those things done in the past.

Brannen McElmurray: Very ordinary course events from a development perspective, and if you look at our history in Puerto Rico, We've obviously been highly successful at getting those things done in the past we've never not done it.

Brannen McElmurray: We've never, you know, not done it, you know, not to say that, you know, there won't be bumps in the road going in the future. But, you know, we're very confident that we'll be able to do that. And then.

Brannen McElmurray: Not to say there won't be bumps in the road going in the future, but we're very confident that we'll be able to do that and then.

Operator: Even beyond the 80, I think, you know, as Wes indicated, there's incremental opportunity that we're working on at the same time. So, you know, I don't think, you know, our view, certainly my view is, I don't view 80 as a ceiling; I view it, you know, kind of as a start. And then we want to see, you know, what we can do from there. It's very clear that the, you know, the mega trend there is, all the oil-fired and HFO stuff is going to be retired.

Brannen McElmurray: Even beyond the <unk> I think as Wes indicated I mean, there is incremental opportunity that we're working on at the same time, so I don't think.

Operator: Our view certainly my view is I don't view <unk> as a ceiling I view it kind of as a start and then we want to see what we can do from there. It's very clear that the megatrend. There is all the oil fired and <unk> stuff is going to be retired.

Operator: On the Henera platform, you know, we're in charge of those retirements, certainly driving that schedule. And so we're highly, you know, motivated to have that happen, not only because it's the right thing to do, but, you know, the island, you know, desperately wants to get to a scenario where, you know, they are gas fired plus solar and battery. But I think that's how we kind of see it, you know, towards the end of the year and certainly going into next year. But the trend is sort of, in my view, kind of up and to the right. And we'll move to our next question. It is coming from the line of Sherif. Elmaghrabi.

Operator: On the <unk> platform, we are in charge of those retirements and that's certainly driving that schedule and so we are highly motivated to have that happen not only because it's the right thing to do but the island desperately wants to get to a scenario, where they are gas fired plus solar and battery, but I think that's how we kind of see it towards the end of the year.

Sherif Ehab Elmaghrabi: And then certainly going into next year, but the trend is sort of in my view kind of up into the right.

Operator: Okay.

Operator: And we'll move to our next question. It is coming from the line of Sherif Elmaghrabi with BTIG. Please go ahead; your line is open.

Sherif Ehab Elmaghrabi: And we'll move to our next question is coming from the line of service.

Sherif Ehab Elmaghrabi: Robbie Please with BTG. Please go ahead your line is open.

Operator: Okay.

Sherif Ehab Elmaghrabi: Hey, Thanks for taking my question.

Sherif Ehab Elmaghrabi: And I hopped on late so I apologize. If this has been asked but on the power auction in Brazil can you remind us when this power would come online.

Sherif Ehab Elmaghrabi: Yeah, well I'll start with that.

Sherif Ehab Elmaghrabi: History, if it's Andrew so.

Andrew Dete: Hey Sheriff, it's Andrew. So the announcement is for two different products. The first product is for existing power plants, and that's a seven-year contract. And, you know, effectively, because it would come on, you know, immediately. And then there's a product for 15 years, which is for a new generation only, and you have to be online by 2028. But obviously, if you finish earlier, you can go to the agency and apply to start off earlier.

Andrew Dete: The announcement is for two different products.

Andrew Dete: The first product is for existing power plants, and that's a seven year contract and effectively because it's existing would come on immediately.

Andrew Dete: And then there is a product for 15 years, which is for new generation, only which you have to be online by 2028, but obviously if you finish earlier you can go to the agency in a pilot to start start earlier because this is generally simple cycle power. We think it's probably a two year build for larger power plants from the auctions run <unk>.

Wesley Robert Edens: Because this is generally simple cycle power, we think it's probably a two-year build for larger power plants from when the auctions run. So it's kind of August 2024. So we think it will be aligned by the end of 26, maybe 27 for new power plants. And, you know, we expect you to have a mix of those two products in your portfolio. Just to amplify a little bit. As Andrew said, when you think of power auctions, I think that the knee-jerk reactions assume that they're going to come on two or three years from now because that would be the norm.

Wesley Robert Edens: Kind of August 2024, so we think we'd be online by the end of 'twenty six 'twenty seven.

Wesley Robert Edens: For new power plants and.

Wesley Robert Edens: We expect to have a mix of those two products in our portfolio.

Wesley Robert Edens: Okay. That's helpful and just to amplify a little bit I mean, as Andrew said, the when you think power auctions I think that the knee jerk reactions to assume that's going to come on two or three years from now because it would be the normal course of events.

Wesley Robert Edens: Just to amplify a little bit, as Andrew said, when you think of power auctions, I think that the knee-jerk reactions assume that they're going to come on two or three years from now because that would be the normal course of events. Given that there is a significant amount of power in the South that does not have gas that would actually be eligible to bid into these auctions if they had gas, those are partnerships that we think are, you know, mutually beneficial for us, potentially, as a gas provider, and obviously for them, they're life-changing because they can now bid an existing asset into the marketplace.

Wesley Robert Edens: That there is a significant amount of power in the south that does not have gas that would actually be eligible to bid into these auctions that they had gas. Those are partnerships that we think are mutually beneficial for us potentially as a gas provider and provided obviously for them their life changing because they can now bid an existing asset into the marketplace. So.

Wesley Robert Edens: So this is a unique situation where a gas auction or a power auction may well result in power being turned on at the end of this year or early next year, and so these financial results that we're showing for 2025, 2026 may be increased by these kinds of long-term auctions in the short term.

Wesley Robert Edens: This is a unique situation where gas auction power auction may well result in powertrain on at the end of this year early next year and so these financial results that we're showing for 2025 2020.

Wesley Robert Edens: Maybe increased by these kind of long term auctions in the short term that's what it was so incredibly exciting about this from a valuation standpoint.

Wesley Robert Edens: Okay.

Speaker Change: Unless you actually touched on my second question, but so far the three five gigawatts that you guys highlight on slide 16 for three five gigawatts of power plants and that contract is it possible to go merchant power and entered agreements with these plans directly I'm thinking you highlighted Puerto Rico desire for Chrysler anti but it seems like there is a similar opportunity in Brazil.

Andrew Dete: Yeah, no, it certainly is possible. And Brazil, Brazil, certainly a different grid, though, right? So in many parts of the year in Brazil, you've got, you know, a lot of hydro and a lot of renewable power at very low cost. So there is a merchant opportunity there, but it's going to be more in times of stress where, you know, the cost of generating power at these plants is in the money.

Speaker Change: Yes, it certainly is possible.

Andrew Dete: <unk>.

Andrew Dete: Brazil, Brazil is certainly a different grid right. So in many parts of the year in Brazil, you've got a lot of hydro in a lot of renewable power at very low cost. So there is a merchant opportunity there, but it's going to be more in times of stress, where the cost of generating power at these at these plants is in the money.

Andrew Dete: And we think, you know, that that certainly is an opportunity. The real big opportunity here is the auctions, because they basically allow for a, you know, fixed capacity contract and then also the merchant opportunity as well. Right. So when you have these capacity contracts, not only are you getting a fixed fee, but then you're also in the sort of regulated and organized market to generate when the system needs you on a JPM basis. And we'll move to our next line. Martin Malloy with Johnson Rice, please go ahead, sir. Good morning. Thank you for taking my question.

Andrew Dete: And we think that certainly is an opportunity, but the real big opportunity here is the auctions.

Martin Whittier Malloy: Because they basically allow for a fixed capacity contract and then also the merchant opportunity as well right. So.

Martin Whittier Malloy: When you have these capacity contracts not only are you getting a fixed fee. But then you also in the in the sort of regulated organized market to generate when the system needs you on a <unk> basis.

Andrew Dete: And we'll move to our next question comes from Martin Malloy with Johnson Rice. Please go ahead, Sir your line is open.

Operator: And we'll move to our next question that comes from Martin Malloy with Johnson Rice. Please go ahead, sir, your line is open. Good morning. Thank you for taking my question. My first question is about Brazil.

Martin Whittier Malloy: Good morning, Thank you for taking my question.

Martin Whittier Malloy: First question is on Brazil.

Martin Whittier Malloy: Outside of the power options could you maybe talk about the outlook for adding additional volumes I know you mentioned the additional potential volumes for the Norske grow facility.

Martin Whittier Malloy: You may be talk about them.

Martin Whittier Malloy: How should we be thinking about other opportunities there.

Martin Whittier Malloy: Yes, so on the gas supply side.

Andrew Dete: Yeah, so on the gas supply side, we're announcing today our first contract at Santa Catarina, which is with the Trans-Bolivia Pipeline. It's about a 14 TBTU contract.

Andrew Dete: We're announcing today, our first contract at Santa Catarina, which is with the trends ability of pipeline. It's about a 14 television to your contract.

Andrew Dete: We're also working with a number of other large industrial consumers in the region. We've got about 300 TBTUs of consumption today on this pipeline system. And our terminal has a few benefits that are kind of outside of just molecule pricing. So first, the transport benefit we have. So customers that are buying from us will have a lower pipeline fee to pay than if they're buying from other sources, which would be either Bolivian gas or offshore gas that comes from the north of Brazil.

Martin Whittier Malloy: We're also working with a number of the other large industrial consumers in the region. We've got about 300 <unk> use of consumption today on this pipeline system and our terminal has a few benefits that are kind of outside of just molecule pricing. So first is basically the transport benefit we have so customers that are by.

Andrew Dete: From us will have a lower basically pipeline fee to pay than if they are buying from.

Andrew Dete: The other sources, which would be the Bolivian gas or offshore gas that comes from the north of Brazil.

Andrew Dete: The second is that we can help some of these consumers transition from buying from their regulated distribution companies to buying as what they call a free consumer in Brazil. They can save some money on that by paying less in regulatory fees. And then they can also get a contract from us, which is much more flexible and is usually designed really around their consumption patterns rather than the kind of inflexible contracts they have today.

Andrew Dete: Second is we can help some of these consumers transition from buying from the regulated distribution companies to buying is what they call a free consumer in Brazil. So they can save some money on that by paying less in regulatory fees and then also they can get a contract from us which is much more flexible and it's usually designed really around their consumption patterns rather than.

Andrew Dete: Kind of in flexible contracts. They have today and then of course, we can compete on actual price, but there's a few other benefits as well, but kind of going with the more flexible lower transport cost solution from us so.

Andrew Dete: And then, of course, we can compete on the actual price. But there are a few other benefits as well by kind of going with the more flexible, lower transport cost solution from us. So that's applicable to a number of the larger kind of industrial consumers who are typically good credit as well in Brazil. And we're working on that. We expect our portfolio in Santa Catarina to look a lot like Bacarena. So, you know, if we do this right, we'll have kind of one MTPA of baseload supply, which will make money on and will also give us the ability to then go and contract the more intermittent capacity contracts on the power side, so we might end up with kind of four MTPA of sort of total contracted supply, one MTPA of which is base load, and three is probably contingent on the power dispatch and linked to international LNG spot prices.

Andrew Dete: It is applicable to a number of the larger kind of industrial consumers, who are typically good credits as well in Brazil and.

Andrew Dete: We're working on that.

Andrew Dete: We expect our portfolio in Santa Catarina to look a lot like Buck arena. So if we if we do this right, we'll have kind of one and tpa a base load supply.

Andrew Dete: We will make money on and will also give us the ability to then go and contract the more intermittent.

Andrew Dete: Capacity contracts on the power side, so we might end up with kind of four MTA of sort of total contracted supply one MTBE, which is base load and three is probably contingent on the power dispatch and linked to international LNG spot prices.

Speaker Change: Great very helpful and my second question I, just wanted to ask about Capex I think it was up.

Andrew Dete: Brian Thanks for an $80 million during the first quarter could you maybe talk about how that.

Andrew Dete: Sure.

Speaker Change: Yes. So there is a lot of I'm sorry.

Christopher S. Guinta: Yeah, I mean, so there's a lot of sorry, microphone open here, guys. There's a lot of in and outs because there have been financing actions. And we can go through it further as you see the notes in the queue. And if you have follow-ups, we can go through it.

Christopher S. Guinta: And here guys.

Christopher S. Guinta: A lot of in and outs, because theres been financing actions and we can it will be further detailed as you see the notes in the Q and if you have follow ups. We can go through it but fundamentally when I look at the balance of the rest of the year, there's very little equity capex required to build out what we are executing in Nicaragua, and then the conversions in Puerto Rico, specifically Marty it's about.

Christopher S. Guinta: But fundamentally, when I look at the balance of the rest of the year, there's very little equity capex required to build out what we are executing in Nicaragua and then the conversions in Puerto Rico. Specifically, Marty, it's about 100 million dollars in total across the terminals and vessels and about 100 million dollars associated with the Puerto Rico expansion. The rest of the capex is FLNG2 in Brazil, both of which are fully financed on a debit.

Christopher S. Guinta: $100 million in total across the terminals in vessels and about $100 million associated with the Puerto Rico expansion. The rest of the Capex is LNG two in Brazil, both of which are fully financed on a debt basis.

Operator: And our next question comes from Chris Robertson with Deutsche Bank. Please go ahead; your line is open.

Christopher S. Guinta: Okay.

Christopher S. Guinta: And our next question comes from Chris Robertson with Deutsche Bank. Please go ahead. Your line is open.

Christopher S. Guinta: Hey guys, thanks for taking my questions. Um, Chris, I just wanted to follow up on that last question just with regard to the CapEx guidance from the previous presentation. I think it was around 1.5 billion. I'm just trying to see how much of the first quarter of CapEx is related to FLNG1 spending. And then how should we think about the cadence and overall total spend for the remaining part of the year as it relates to gross CapEx?

Operator: Yes.

Christopher Warren Robertson: Hey, guys. Thanks for taking my question.

Christopher S. Guinta: Chris I just wanted to follow up on that on that last question just with regards to the Capex guidance from the previous presentation I think it was around $1 5 billion.

Christopher S. Guinta: Okay.

Christopher S. Guinta: I'm just trying to see how much of the first quarter Capex is related to <unk> spending and then how should we think about it.

Speaker Change: Hey, Dan.

Christopher S. Guinta: And overall total spend for the remaining part of the year as it relates to gross capex.

Chris: Yes so.

Christopher S. Guinta: Yeah, so I stand by the 1.5, with 1.25 billion being financed. That still kind of works for what we're expecting in the Brazil assets in FLNG2. For FLNG1, we spent in the first quarter of 2024 around $140 million. And then for the balance of the year, that'll really taper off; you'll still have some spend through April and May, of course, on that asset, and then very little spend we expect in June, July, August, as we kind of complete a few make-ready activities post-first LNG. As I mentioned, you spent a little bit of money on the Mexican asset and modest maintenance capex in the first quarter on Jamaica and Puerto Rico. And that'll obviously be outlined in the Q.

Christopher S. Guinta: Standby like the $1 five with $1 25 billion being finance, that's still kind of works for what we're expecting in the Brazil assets and <unk> two for <unk>. One we spent in first quarter 2020 for around $140 million and then for the balance of the year that'll really taper off Youll still have some spend through April.

Christopher S. Guinta: In May of course on that asset and then very little spend we expect June July August as we kind of complete a few make ready activities post first LNG as.

Christopher S. Guinta: As I mentioned, you spent a little bit of money on the.

Christopher S. Guinta: Mexican asset and modest maintenance capex in the first quarter for Jamaica, Puerto Rico.

Christopher S. Guinta: And that will obviously be.

Christopher S. Guinta: Outlined in the Q.

Christopher S. Guinta: And then for the rest of the year, as I said, it's really not much equity capex, it's really just the terminals and the conversion in Puerto Rico. Now you will start ramping up capex spend for FLNG2 once you go First LNG on FLNG-1. And then obviously, the Brazil business continues to spend on its build of the Bacarena power plant, but all the CapEx for the terminals should be done as of the end of the first quarter.

Christopher S. Guinta: And then for the rest of the year as I said, it's really not much equity capex, it's really just the terminals and.

Christopher S. Guinta: The conversion in Puerto Rico, now you will start ramping up capex spend for <unk> two once you.

Christopher S. Guinta: Ill go first LNG on F. LNG, one and then obviously the Brazil business continues to spend on its build of the Buck Arena Powerplant.

Christopher S. Guinta: But all of the Capex for the terminals should be done as of the end of the first quarter.

Speaker Change: Right and just.

Christopher S. Guinta: Right. And just to circle back, so the buffering of power, as far as I understand, the financing against that is just drawn down in tandem with the spend, so that that nets out basically, so there's no need for equity cash there. But on the second, the Portachem facility, is there financing against that one as well? And how much capex is going to be spent on the 1.6 gigawatt power project this year?

Christopher S. Guinta: Circle back so the bok rate power as far as I understand the financing against that is just drawn down in <unk>.

Christopher S. Guinta: With the spend so that nets out basically so there's there's no.

Christopher S. Guinta: Need for equity cash there, but.

Christopher S. Guinta: On the.

Christopher S. Guinta: On the second <unk> facility is there.

Christopher S. Guinta: Financing against that one as well and how much capex is going to be spent on on the one six gigawatt pilot projects this year.

Andrew Dete: Yeah, yeah, perfect. So you're totally right about the Bacarana power plant. So that's fully financed by BNDES, the Brazilian Development Bank. And all of the funding is in place there. And we'll just draw it down as we keep building. So zero incremental kind of CapEx from the NFT side today, or equity CapEx, as I think you're saying. On Porto Sen, so basically, we have closed on a loan with four Brazilian banks, and we are funding CapEx as we go.

Christopher S. Guinta: Yes, yes, perfect. So you're totally right on the Buck Rana power plant. So that's fully financed with <unk>, the Brazilian development Bank and all of the funding is in there and we'll just draw down as we as we keep building. So it <unk> incremental kind of capex from the NFS side today or equity equity Capex as I think you are saying on purchase.

Andrew Dete: And so.

Andrew Dete: Same same thing basically so we.

Andrew Dete: Have closed on a loan with four Brazilian banks and we are funding capex as we go.

Andrew Dete: We will probably transition that debt structure to a longer-term bond structure in Brazil over the next few months. But from a net result basis for kind of what you're talking about from a CapEx perspective, same thing; we'll just draw that down over the course of construction from now to then. So we don't really expect any incremental CapEx from NFT.

Speaker Change: We will probably transition.

Andrew Dete: That debt structure to a longer term bond structure in Brazil over the next few months, but from a net result basis for kind of what you're talking about from a capex perspective same thing what would just draw that down over the course of construction from now till then so we don't expect.

Andrew Dete: Really any incremental Capex menifee.

Operator: And that concludes today's question and answer session. I'll turn it now back to Chance Pipitone for any additional closing remarks.

Andrew Dete: And that concludes today's question and answer session I will turn it now back to chance pepitone for any additional or closing remarks.

Chance Pipitone: Well, great everyone. Thanks for calling in for the update. Obviously, it's a clarifying and exciting update from our perspective, and I hope you found it informative. We look forward to following up on any questions you have, and we'll talk to you in a few months. Thank you very much.

Chance Pipitone: Great everyone. Thanks for calling in.

Chance Pipitone: Obviously, it's a clarifying and exciting updates from our perspective, an outcome founded informative and we look forward to following up any questions you have and.

Chance Pipitone: We'll talk to you in a few months. Thank you very much.

Speaker Change: Ladies and gentlemen. This concludes today's conference. Thank you for your participation you may now disconnect.

Operator: Ladies and gentlemen, this concludes today's conference. Thank you for your participation. You may now disconnect.

Operator:

Operator: Yes.