Q1 2024 Montauk Renewables Inc Earnings Call

May 9, 2024

Okay.

Operator: Good afternoon, everyone, and thank you for participating in today's conference call. I would like to turn the call over to Mr. John Ciroli as he provides some important cautions regarding forward-looking statements and non-GAAP financial measures containing the earnings materials or made on this call. John, please go ahead.

Good afternoon, everyone and thank you for participating in today's conference call I would like to turn the call over to Mr. Johnson as he provide some important cautions regarding forward looking statements and non-GAAP financial measures contained in the earnings materials or made on this call. John. Please go ahead.

John Ciroli: Thank you and good afternoon everyone. Welcome to Montauk Renewables' earnings conference call to review the first quarter 2024 financial and operating results and developments. I'm John Ciroli, Chief Legal Officer and Secretary at Montauk. Joining me today are Sean McClain, Montauk's President and Chief Executive Officer, to discuss business development, and Kevin Van Asland, Chief Financial Officer, to discuss our first quarter 2024 financial and operating results. At this time, I would like to direct your attention to our forward-looking disclosure statement.

John Ciroli: Thank you and good afternoon, everyone welcome to Montauk Renewables earnings Conference call to review, the first quarter 2024 financial and operating results and developments I'm, John It's Raleigh, Chief Legal Officer and Secretary at Montauk. Joining me today are Shawn Mcclain, Montagues, President and Chief Executive Officer.

John Ciroli: Can you discuss business development, and Kevin Vann, Azlan, Chief Financial Officer to discuss our first quarter 2024 financial and operating results.

John Ciroli: During this call, certain comments we make constitute forward-looking statements and, as such, involve a number of assumptions, risks, and uncertainties that could cause the company's actual results or performance to differ materially from those expressed in or implied by such forward-looking statements. These risk factors and uncertainties are detailed in Montauk Renewables' SEC filing. Our remarks today may also include non-GAAP financial measures. We present EBITDA and adjusted EBITDA metrics because we believe the measures assist investors in analyzing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance.

John Ciroli: At this time I would like to direct your attention to our forward looking disclosure statement.

John Ciroli: During this call certain comments, we make constitute forward looking statements and as such involve a number of assumptions risks and uncertainties that could cause the company's actual results or performance to differ materially from those expressed in or implied by such forward looking statements.

John Ciroli: These risk factors and uncertainties are detailed and whatnot montoc renewables SEC filings.

John Ciroli: These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles. Additional details regarding these non-GAAP financial measures, including reconciliations to the most directly comparable GAAP financial measures, can be found in our slide presentation and in our first quarter 2024 earnings press release in Form 10-Q issued and filed this afternoon, which are available on our website at ir.montaukrenewables.com. After our remarks, we will open the call to questions. We ask that you please keep to one question to accommodate as many questions as possible. And with that, I will turn the call over to Sean.

John Ciroli: Our remarks today May also include non-GAAP financial measures.

Sean: <unk> EBITDA and adjusted EBITDA metrics, because we believe the measures to assist investors in analyzing our performance across reporting periods.

Sean: Consistent basis by excluding items that we do not believe are indicative of our core operating performance.

John Ciroli: non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles.

John Ciroli: Additional details regarding these non-GAAP financial measures, including reconciliations to the most directly comparable GAAP financial measures can be found in our slide presentation and in our first quarter 2024 earnings press release and Form 10-Q issued and filed this afternoon, which are available on our website at.

Sean: IR Dot Montoc renewables dotcom.

John Ciroli: After our remarks, we will open the call to questions. We ask that you. Please keep to one question to accommodate as many questions as possible and with that I will turn the call over to Sean.

Sean McClain: Thank you, John. Good day, everyone, and thank you for joining our call. We will begin with development. My comments will be focused on updates regarding our pico-dairy digestion capacity and our Turkey North Carolina Montauk Ag Renewables Swine Waste Energy Project, both of which were also discussed during our 2023 year-end call a short two months ago. As we ended 2023, we had commissioned the first of our two new digesters in our new expanded reception pit in our PECO Dairy Cluster project.

Sean: Thank you John good.

Sean: Hey, everyone and thank you for joining our call.

Sean McClain: Again with development my comments will be focused on updates regarding our Pico dairy digestion capacity increase.

Sean McClain: Our Turkey, North Carolina, I'll talk AG renewables swine waste to energy projects, both of which were also discussed during our 2023 year end call a short two months ago.

Sean McClain: As we ended 2023, we had commissioned the first of our two new Digesters and our new expanded reception at our Pico dairy costs for projects.

Sean McClain: During the first quarter of 2024, we completed the commissioning of the second and final digest. With the Digestion Expansion Project now fully commissioned, we expect a continued ramp-up in production through the second quarter of 2024. The PECO Expansion Project increased digestion capacity by approximately 60% to better match the unchanged processing capacity of the project's R&G facility.

Sean McClain: During the first quarter of 2024, we completed the commissioning of the second and final digester with the digestion expansion project now fully commission. We expect the continued ramp up in production through the second quarter of 2024.

Sean McClain: The <unk> expansion project increased digestion capacity by approximately 60% to better match the unchanged processing capacity of the project's R&D facility.

Sean McClain: The new digestion capacity is expected to be fully utilized once the dairy provides our contractual third and final increase in feedstock volumes in 2025. In the first quarter of 2024, our R&G production at the PECO facility increased approximately 39% compared to the first quarter of 2023. I will now provide an update regarding our North Carolina Swine to Waste Energy Development Montauk Ag Renewable project.

Sean McClain: The new digestion capacity is expected to be fully utilized once the dairy provides our contractual third and final increase in feedstock volumes in 2025.

Sean McClain: In the first quarter of 2024, our R&D production at the Pico facility increased approximately 39% compared to the first quarter of 2023.

Sean McClain: I will now provide an update regarding our North Carolina Swider waste energy development Masaki AG renewables, we have substantially completed the engineering and are preparing to initiate the commissioning activities of our first reactor processing line at our Turkey, North Carolina location, we expect commissioning to continue through the end of June.

Sean McClain: We have substantially completed the engineering and are preparing to initiate the commissioning activities of our first reactor processing line at our Turkey, North Carolina location. We expect commissioning to continue through the end of June 2024. Our development progress has positioned us to be able to enter into a full engineering, procurement, and construction contract related to the first phase full build out to satisfy our Duke REC agreement. We have also placed orders for various significant components, many of which have long lead times, related to the construction of the additional reactor.

Sean McClain: 2020 for our development.

Sean McClain: Progress has positioned us to be able to enter into a full engineering procurement and construction contract related to the first phase, we'll build outs to satisfy our Duke recognizable.

Sean McClain: We have also placed orders for various significant components, many of which have long lead times related to the construction of the additional reactors. We expect this new EPC contract to assist us in meeting our rolling commissioning scheduled through late 2025.

Sean McClain: We expect this new EPC contract to assist us in meeting our rolling commissioning schedule through late 2025. To support the first phase rolling commissioning schedule and, ultimately, our due-rec agreements, we continue to pursue feedstock agreements. During the first quarter of 2024, we have contracted with a farming group and are in late stage discussions with multiple others. We continue to thoughtfully bring partners under agreement targeting approximately 120,000 hog spaces to ultimately satisfy our due correct agreement.

Sean McClain: To support the first phase rolling commissioning schedule and ultimately our rapid growth we continue to pursue feedstock agreements during the first quarter of 2024, we have contracted with a farming group and our late stage discussions with multiple others. We continue to thoughtfully bring partners under <unk>.

Sean McClain: <unk> is targeting approximately 120 <unk>.

Sean McClain: Spaces to ultimately satisfy our Duke rec agreements.

Sean McClain: The critical part of our development progress in North Carolina includes the continued optimization of our feedstock collection equipment and methodologies. Our collection process includes installing equipment on our feedstock supplier farms, which are under long-term agreements, as well as processes and equipment for processing waste through multiple phases of solid concentration on both the farm site as well as our centralized processing facility at Turkey, NC.

Sean McClain: A critical part of our development progress in North Carolina includes the continued optimization of our feedstock collection equipment and methodologies. Our collection process includes installing equipment on our feedstock supplier farms, which are under long term agreements as well as processes and equipment for processing ways through multiple.

Sean McClain: Phases of solid concentration on both the farm side as well as our centralized processing facility at Cherokee North Carolina.

Sean McClain: We continue to progress with an amendment to the New Renewable Energy Facility, the NREP designation, our project received in late 2023 that can optimize the generation of RECs. We expect a decision on this amendment in 2024, which is a critical path item in the timing of the utility infrastructure design and other balance of plant componentry at our Turkey, North Carolina facility. As discussed in our 2023 year-end results call on March 2024, we reached an agreement with one of our landfill hosts to exit our gas rights in advance of their expiration, impacting one of our smaller renewable electric generation operating facilities. The strategic decision to exit this facility was influenced by a mid 2024 expiration of an above market power purchaser. The Elimination of Decommissioning, Asset Removal, or Site Restoration Obligations

Sean McClain: We continue to progress with an amendment to the new renewable energy facility and rest of the nation. Our project received late 2023 that can optimize the generation of Rex We expect a decision on this amendment in 2024, which is a critical path item and the timing of the utility infrastructure design and other balances.

Sean McClain: Plant componentry at our Turkey, North Carolina facility.

Sean McClain: As discussed in our 2023 year end results call in March 2024, we reached an agreement with one of our landfills to exit our gas rates in advance of their exploration impacting one of our smaller renewable electric generation operating facilities the strategic.

Sean McClain: <unk> decision to exit this facility was influenced by mid 2024 exploration up and above market power purchase agreement the elimination of decommissioning asset removal or site restoration obligations. He agreed consideration of proceeds of $1 million being well in excess of the carrying value of the project and the offer too.

Sean McClain: The Agreed Consideration of Proceeds of $1,000,000 being well in excess of the carrying value of the project and the offer to extend our gas rights at two of our existing R&G operating facilities, Atascosita and Coastal Plains, for an additional five years through the Contractual Effective Data Disagreement, though it is October 1st, 2024. In March 2024, we elected to cease operations at this facility as the electrical utility provider is performing upgrades which would require us to invest additional capital.

Sean McClain: And our gas rates at two of our existing RMG operating facilities attached proceeded coastal plains for an additional five years each.

Sean McClain: Through the contractual effective data disagreement though it is October one 2024 in March 2024, we elected to cease operations at this facility as the electrical utility provider is performing upgrades, which would require us to invest additional capital. This decision is expected to have a positive.

Sean McClain: This decision is expected to have a positive effect on 2024 results due to a projected monthly loss on operations following the expiration of the project's power purchase agreement. Finally, I'd like to highlight and outline what we view to be the strong underlying fundamentals of Montauk, particularly in light of the share price volatility experienced during 2024. I will not, however, comment on the stock price or its trading volume.

Sean McClain: <unk> 2004 results due to a projected monthly loss on operations following the expiration of the projects power purchase agreement.

Sean McClain: Finally, I'd like to highlight and outlined what we view to be the strong underlying fundamentals of Blackhawk, particularly in light of the share price volatility express experienced during 2024 I will not however comment on the stock price, where it's trading volumes.

Sean McClain: Nearly all of Montauk's portfolio of 14 operating projects nationwide are hosted by large and growing host businesses. Our integrated relationship approach with these host businesses helps us strategically to continue to secure recurring renewals of our gas rights at these facilities. The company is winning new competitive project opportunities and is invited to participate in a diverse selection of new opportunities.

Sean McClain: Nearly all of the <unk> portfolio of 14 operating projects nationwide are hosted by large and growing those businesses.

Sean McClain: Our integrated relationship approach with the Soc businesses helps us strategically to continue to secure recurring renewals of our gas rates at these facilities. The company is winning new competitive project opportunities and is invited to participate in a diverse selection of new opportunities.

Sean McClain: We are focused on diversifying our comprehensive business model, including the feedstocks we process, the commodities we produce, the federal and state attributes we generate, the method by which we monetize our commodities and attributes, and the way in which we acquire our project feedstock requirements. We have a demonstrated history of successful project execution and remain intently focused on attractive growth opportunities. Specifically, we have announced a series of committed development projects that are expected to increase our production capacity by 6,900 MMBTUs a day, 2.5 million MMBTUs annually, and additional development projects that are expected to advance the benefit of our existing facilities through the monetization of biogenic carbon dioxide and further diversify our feedstock processing to include waste from the industrialized swine industry.

Sean McClain: We are focused on diversifying our comprehensive business model, including the feedstocks, we process. The commodities, we produce the federal and state attributes we generate the method by which we monetize our commodities natural beauty and the way in which we acquire our project feedstock requirements.

Sean McClain: We have a demonstrated history of successful project execution and remain intently focused on attractive growth opportunities, specifically, we've announced a series of committed development projects that are expected to increase our production capacity by 6900 MB to use a day to $5 million <unk> annually in.

Sean McClain: Additional development projects that are expected to advance the benefit of our existing facilities through the monetization of biogenic carbon dioxide and further diversify our feedstock processing to include waste from industrialized swine agriculture.

Sean McClain: On an annual basis, we have been net income and operating cash flow positive since 2022. We maintain the financial discipline that provides us with the opportunity to patiently enhance our profit from the sale of our rent attributes by placing them directly with large RFS obligated parties and synchronizing those transactions to the purchasing cadence of those large obligated parties. We ended the first quarter of 2024 with more than $60 million in cash on our balance sheet, an undrawn revolving credit facility with $117.5 million of availability, and a credit syndication to which we can approach the utilization of accordion finance options and which is separately project finance development.

Sean McClain: On an annual basis, we have been net income and operating cash flow positive. Since 2022, we maintained the financial discipline that provides us the opportunity to patiently enhance our profit from the sale of our rent attributes by placing them directly with large RFS obligated parties and synchronizing those transactions to the purchasing cadence.

Sean McClain: Those large obligated parties.

Sean McClain: We ended the first quarter of 2024 with more than $60 million in cash on our balance sheet and undrawn revolving credit facility with a $117 5 million of availability in our credit syndication to which we can approach the utilization of accordion finance options and which is separately project finance development.

Sean McClain: We remain fully integrated, operate, and maintain examples of multiple commercially viable biomethane processing technologies, and continue to build upon four decades of experience in optimizing the collection and beneficial use of processing feedstocks through nationwide variability of host business practices, climate impacts, and feedstock constituents. Montauk's focus has been and continues to be on maximizing long-term shareholder value. We continue to believe our development strategy supports that focus. Lastly, regarding the RFS, the EPA has set the RVO at 1,090 D3 RINs for 2024, implying a monthly D3 generation run rate higher than what the industry has achieved to date through 2024.

Sean McClain: We remain fully integrated operate and maintain examples of multiple commercially viable biomethane processing technologies and continue to build upon for decades of experience in optimizing the collection of beneficial use of processing of feedstocks through nationwide variability of host business practices climate impact.

Sean McClain: And feedstock constituents.

Sean McClain: <unk> focus has been and continues to be on maximizing long term shareholder value. We continue to believe our development strategy.

Sean McClain: Ports that focus.

Sean McClain: Lastly, regarding the RFS. The EPA has set the RVO at $1 million 90, <unk> for 2024, implying a monthly D regeneration run rates higher than what the industry has achieved to date through 2024. We also note that the EPA has announced that it will not use <unk>.

Sean McClain: River Authority for the 2020 for RVO, we believe those factors can support strong 2024 price levels correct.

Sean McClain: We also note that the EPA has announced that it will not use waiver authority for the 2024 RVO. We believe those factors can support strong 2024 price levels for RIN. And with that, I will turn the call over to Kevin.

Sean McClain: That I will turn the call over to Kevin.

Kevin Van: Thank you, Sean. I will be discussing our first quarter 2024 financial and operating results. Please refer to our earnings press release and the supplemental slide that has been posted to our website for additional information. Our profitability is highly dependent on the market price of environmental attributes, including the market price of RINs.

Kevin: Thank you, Sean I will be discussing our first quarter 2024 financial and operating results. Please refer to our earnings press release and the supplemental slides that have been posted to our website for additional information.

Kevin Van: Our profitability is highly dependent on the market price of environmental attributes, including the market price of Rins as we self market a significant portion of our rent a strategic decision not to commit the transfer available rins during a period will impact our revenue and operating profit we strategically determined not to transfer all available <unk> brands generated and available for transfer.

Kevin Van: As we self-market a significant portion of our RINs, a strategic decision not to commit to transfer available RINs during a period will impact our revenue and operating profits. We strategically decided not to transfer all available D3 RINs generated and available for transfer during the first quarter of 2024 based on our internal expectations related to the price of D3 RINs. As a result, we have approximately 3.4 million RINs remaining in inventory from 2024 first quarter gas production. We did sell approximately 3.9 million RINs, representing all RINs from our 2023 gas production. We have not entered into commitments to transfer RINs in inventory or RINs expected to be generated from forecasted future production.

Kevin Van: During the first quarter of 2024 based on our internal expectations related to the price of <unk> brands. As a result, we have approximately $3 4 million rins remaining in inventory from 2024 first quarter gas production.

Kevin Van: We did sell approximately $3 9 million rins, representing all rent from our 2023 gas production.

Kevin Van: Have not entered into commitments to transfer rins in inventory or rins expected to be generated from forecasted future production. The average second quarter through the first few days of May <unk> RIN price was approximately $3 28.

Kevin Van: The average second quarter through the first few days of May, the B3 RIN price was approximately $3.28. Total revenues in the first quarter of 2024 were $38.8 million, an increase of $19.6 million or 102.5% compared to $19.2 million in the first quarter of 2023. The primary driver for this increase relates to an increase of 4.9 million RINs sold in the first quarter of 2024 compared to the first quarter of 2023 due to our decision not to sell RINs in the first quarter of 2023 due to our belief that the first quarter of 2023 D3 RIN index volatility was temporary.

Kevin Van: Total revenues in the first quarter of 2024 were $38 8 million, an increase of $19 6 million or 102, 5% compared to $19 2 million in the first quarter of 2023.

Kevin Van: Primary driver for this increase relates to an increase of $4 $9 million range. So in the first quarter of 2024 compared to the first quarter of 2023 due to our decision to not sell rent in the first quarter of 2023 due to our belief that the first quarter of 2023 D. Three rent index volatility with temporary.

Kevin Van: Up to 7.9 million RINs will be sold in the first quarter of 2024, 4.0 million related to 2024 R&D production. Also contributing to the increase is an increase in realized rent pricing during the first quarter of 2024 to $3.25 compared to $2.01 in the first quarter of 2023.

Kevin Van: The $7 9 million Rins sold in the first quarter of 2024 $401 million related to 2024 R&D production.

Kevin Van: Contributing to the increase is an increase in realized RIN pricing during the first quarter of 2024 to $3 25 compared to $2 <unk> in the first quarter of 2023.

Kevin Van: Total general and administrative expenses were $9.4 million in the first quarter of 2024, flat compared to $9.5 million in the first quarter of 2023. Employee-related costs, including stock-based compensation, were $5.7 million in the first quarter of 2024, an increase of $0.7 million or 14.6% compared to $5.0 million in the first quarter of 2023. Our corporate insurance premiums increased approximately $0.2 million, or 12.2%, in the first quarter of 2024 compared to the first quarter of 2023. Our professional fees decreased approximately $1 million, or 48.7%, compared to the first quarter of 2023. Turning to our segment operating metrics, I'll begin by reviewing our renewable natural gas segment.

Kevin Van: Total general and administrative expenses were $9 4 million in the first quarter of 2024 flat compared to $9 $5 million in the first quarter of 2023.

Kevin Van: Employee related costs, including stock based compensation.

Kevin Van: $5 7 million in the first quarter of 2024, an increase of <unk> 7 million or 14, 6% compared to 501 million in the first quarter of 2023.

Kevin Van: Our corporate insurance premiums increased approximately <unk> 2 million or 12, 2% in the first quarter of 2024 compared to the first quarter of 2023, our professional fees decreased approximately $1 million or 48, 7% compared to the first quarter of 2023.

Kevin Van: We produced 1.4 million MMBTU of RNG during the first quarter of 2024, an increase of less than 0.1 million, or 4.4%, as compared to 1.4 million during the first quarter of 2023. Our coastal facility produced 38,000 more MMBTU in the first quarter of 2024 compared to the first quarter of 2023 as a result of plant processing equipment improvement and well-food operational. Our McCarty facility produced 24,000 more MMVTU in the first quarter of 2024 as compared to the first quarter of 2023 as a result of well-field enhancement by our landfill host.

Kevin Van: Turning to our segment operating metrics I'll begin by reviewing our renewable and natural gas segment, we produced $1 4 million and then Btu of R&D. During the first quarter of 2024, an increase of less than <unk> 1 million or four 4% as compared to $1 4 million during the first quarter of 2023.

Kevin Van: Our coastal facility produced 38000 more <unk> in the first quarter of 2024 compared to the first quarter of 2023 as a result of planned processing equipment improvements in well third operational enhancements.

Kevin Van: Our Mccarty facility produced 24000 more <unk> in the first quarter of 2024 as compared to the first quarter of 2023 as a result of welfare on enhancements or Atlanta.

Kevin Van: Our landfill host.

Kevin Van: Our Galveston facility produced 19,000 mmBtu more in the first quarter of 2024 compared to the first quarter of 2023 as a result of a temporary reduction in feedstock inlet during modifications to process equipment in the first quarter of 2023. Our PECO facility produced 9,000 mmBtu more in the first quarter of 2024 compared to the first quarter of 2023 as a result of commissioning our dairy digestion expansion project.

Kevin Van: Our Galveston facility produced 19000, F&B to you more in the first quarter of 2024 compared to the first quarter of 2023 as a result of a temporary reduction in feedstock inlet during modifications to process equipment in the first quarter of 2023.

Kevin Van: Our Pico facility produced 9000 Btu more in the first quarter of 2024 compared to the first quarter of 2023 as a result of commissioning our dairy digestion expansion project.

Kevin Van: Offsetting the improvements was our Rumpke facility, which produced 55,000 MMBTU less in the first quarter of 2024 compared to the first quarter of 2023 as a result of the process equipment failure that occurred during this first quarter of 2020. Revenues from the renewable natural gas segment during the first quarter of 2024 were $34.0 million, an increase of $19.2 million, or 129.9 percent, compared to $14.8 million during the first quarter of 20

Kevin Van: Offsetting the improvements with our Rumsey facility, which produced 55000 btu less in the first quarter of 2024 compared to the first quarter of 2023 as a result of the process equipment failure that occurred during the first quarter of 2024.

Kevin Van: Revenues from the renewable natural gas segment during the first quarter of 2024 were $34.0 million, an increase of $19 2 million or 129, 9% compared to $14 8 million during the first quarter of 2023.

Kevin Van: Average commodity pricing for natural gas for the first quarter of 2024 was 34.5 percent lower than the prior year period. During the first quarter of 2024, we self-marketed 7.9 million RINs, representing a $4.9 million increase, or 167.5 percent, compared to 2.9 million RINs self-marketed during the first quarter of 2023. Average pricing realized on RIN sales during the first quarter of 2024 was $3.25, as compared to $2.01 during the first quarter of 2023, an increase of 61.7%. This compares to the average D3 RIN index price for the first quarter of 2024 of $3.12, which is approximately 53.7% higher than the average D3 RIN index price for the first quarter of 2023 of $2.03.

Kevin Van: Average commodity pricing for natural gas for the first quarter of 2024 was 34, 5% lower than the prior year period. During the first quarter of 2024, we self marketed $7 9 million rins, representing a $4 9 million increase or 167, 5% compared to $2 9 million Rins south marketed during the first quarter of 2000.

Kevin Van: 'twenty three.

Kevin Van: Average pricing realized when RIN sales during the first quarter of 2024 was $3 25 as compared to $2 <unk>. During the first quarter of 2023, an increase of 61, 7%.

Kevin Van: This compares to the average <unk> index price for the first quarter of 2024 of $3 12, being approximately 53, 7% higher than the average D. Three rent index price for the first quarter of 2023 of $2 <unk>.

Kevin Van: On March 31, 2024, we had approximately 0.4 million MMBTUs available for RIN generation and had approximately 3.4 million RINs generated and unsold. We had approximately 0.4 million MMBTUs available for RIN generation and had approximately 8.3 million RINs generated and unsold on March 31, 2023. Our operating and maintenance expenses for our R&G facilities during the first quarter of 2024 were $12.1 million, an increase of $0.8 million, or 7%, compared to $11.3 million during the first quarter of 2023.

Kevin Van: At March 31, 2024, we had approximately <unk> 4 million MMP to use available for RIN generation and had approximately $3 4 million rens generated an unsold we had approximately 0.4 million MMP to use available for RIN generation and had approximately $8 3 million Rins generated an unsold at March 31 2000.

Kevin Van: 'twenty three.

Kevin Van: Our operating and maintenance expenses for our R&D facilities. During the first quarter of 2024 were $12 1 million, an increase of <unk> 8 million or 7% compared to $11 3 million during the first quarter of 2023.

Kevin Van: Our R&G facilities reported increased total segment utility expenses of approximately $0.1 million during the first quarter of 2024 as compared to the first quarter of 2023. Other R&G operating and maintenance expenses increased approximately $0.7 million during the first quarter of 2024 as compared to the first quarter of 2023, primarily as a result of timing related to annual facility preventative maintenance. We produced approximately 54,000 megawatt hours of renewable electricity during the first quarter of 2024, an increase of approximately 8,000 megawatt hours, or 17.4%, compared to 46,000 megawatt hours during the first quarter of 2023.

Kevin Van: Our R&D facilities reported increased total segment utility expenses of approximately <unk> 1 million during the first quarter of 2024 as compared to the first quarter of 2023.

Kevin Van: Other R&D operating and maintenance expenses increased approximately <unk> 7 million during the first quarter of 2024 as compared to the first quarter of 2023, primarily as a result of timing related to annual facility preventative maintenance.

Kevin Van: Produced approximately 54000 megawatt hours and renewable electricity during the first quarter of 2024, an increase of approximately 8000 megawatt hours or 17, 4% compared to 46000 megawatt hours during the first quarter of 2023, our security facility produced approximately 3000 megawatt hours more in the first quarter of 2024.

Kevin Van: Our security facility produced approximately 3,000 megawatt hours more in the first quarter of 2024 compared to the first quarter of 2023 as a result of the completion of prior period engine maintenance. Our Bowerman facility produced approximately 3000 megawatt hours more in the first quarter of 2024 compared to the first quarter of 2023, primarily related to the timing of original equipment manufacturer preventative and engine maintenance. Revenues from renewable electricity facilities during the first quarter of 2024 were $4.8 million, an increase of $0.4 million, or 9.8%, compared to $4.4 million during the first quarter of 2023. The increase is primarily driven by an increase in volume.

Kevin Van: Compared to the first quarter of 2023 as a result of the completion of prior period engine maintenance.

Kevin Van: Our bedroom and facility produced approximately 3000 megawatt hours more in the first quarter of 2024 compared to the first quarter of 2023, primarily related to the timing of original equipment manufacturer preventative and engine maintenance.

Kevin Van: Revenues from the renewable electricity facilities during the first quarter of 2024 were $4 8 million, an increase of <unk> 4 million or nine 8% compared to $4 4 million. During the first quarter of 2023. The increase was primarily driven by the increase in volumes.

Kevin Van: Our renewable electricity generation operating and maintenance expenses during the first quarter of 2024 were $2.3 million, a decrease of $0.6 million, or 19.9%, compared to $2.9 million during the first quarter of 2023. Our empowerment facility operating and maintenance expenses decreased approximately $0.3 million, which was primarily driven by the timing of annual OEM preventative maintenance expenses. Our security facility operating and maintenance expenses decreased approximately $0.3 million, which was driven by the non-recurring reversal of our asset retirement obligation liability related to the sale of the site.

Kevin Van: Our renewable electricity generation operating and maintenance expenses during the first quarter of 2024 were $2 3 million a decrease of <unk> 6 million or 19, 9% compared to $2 $9 million. During the first quarter of 2023, our empowerment facility operating and maintenance expenses decreased approximately <unk> $3 million, which was primarily driven by the <unk>.

Kevin Van: <unk> of annual OEM preventative maintenance expenses.

Kevin Van: Our security facility operating and maintenance expenses decreased approximately <unk> 3 million, which was driven by the nonrecurring reversal of our asset retirement obligation liability related to the sale of the site.

Kevin Van: During the first quarter of 2024, we recorded impairments of 0.5 million, an increase of less than 0.1 million or 17.1% compared to 0.5 million in the first quarter of 2023. Specifically identified impairment losses in the first quarter of 2024 primarily relate to the remaining book value of assets due to our decision to cease operations at the security facility. We also impaired various R&G equipment that was deemed obsolete for current operation. The first quarter of 2023 impairment relates to specifically identified feedstock processing machine components at an R&D site that was not in operational use. We did not record any impairments related to our cash flow assessment.

Kevin Van: During the first quarter of 2024, we recorded impairments of <unk> $5 million, an increase of less than <unk> 1 million or 17, 1% compared to <unk> $5 million in the first quarter of 2023.

Kevin Van: Specifically identified impairment losses in the first quarter of 2024, primarily relate to the remaining book value of assets due to our decision to cease operations at the security facility.

Kevin Van: We also impaired various R&D equipment that was deemed obsolete for current operations.

Kevin Van: First quarter of 2023 impairment relates to specifically identified feedstock processing machine components at an R&D site that was not an operational use.

Kevin Van: We did not record any impairments related to our cash flow assessments.

Kevin Van: Operating income for the first quarter of 2024 was $2.4 million, an increase of $16.5 million, or 116.7%, compared to an operating loss of $14.2 million for the first quarter of 2023. R&G operating income for the first quarter of 2024 was $11.6 million, an increase of $15.9 million, or 370.2%, compared to an operating loss of $4.3 million for the first quarter of 2023. Renewable electricity generation operating income for the first quarter of 2024 was $0.4 million, an increase of $0.6 million compared to an operating loss of $0.2 million for the first quarter of 2023.

Kevin Van: Operating income for the first quarter of 2024 was $2 4 million, an increase of $16 5 million or 116, 7% compared to an operating loss of $4 $14 2 million for the first quarter of 2023.

Kevin Van: R&D operating income for the first quarter of 2024 was $11 6 million, an increase of $15 9 million or 372% compared to an operating loss of $4 3 million for the first quarter of 2023 renewed.

Kevin Van: Renewable electricity generation operating income for the first quarter of 2024 was <unk> 4 million, an increase of <unk> 6 million compared to an operating loss of <unk> 2 million for the first quarter of 2023.

Kevin Van: Turning to the balance sheet, on March 31st, 2024, $62.0 million was outstanding under our term loan. As of March 31st, 2024, the company's capacity available for borrowing under the revolving credit facility remained at $117.5 million. During the first quarter of 2024, we generated $14.3 million of cash from operating activities, a 220.7% increase from the prior year fiscal quarter ended March 31, 2023, of cash used in operating activities of $11.8 million. Based on our estimate of the present value of our PICO earnout obligation, we recorded a decrease of $0.8 million to the liability at March 31, 2024.

Kevin Van: Turning to the balance sheet at March 31, 2024, 62.0 million was outstanding under our term loan as of March 31, 2024, the company's capacity available for borrowing under the revolving credit facility remained at $117 5 million.

Kevin Van: During the first quarter of 2024, we generated $14 $3 million of cash from operating activities of 227% increase from the prior year fiscal quarter ended March 31, 2023 of cash used in operating activities of $11 8 million.

Kevin Van: Based on our estimate of the present value of our <unk> earn out obligation. We recorded a decrease of <unk> 8 million for the liability at March 31, 2024. The decrease was recorded through our R&D segment royalty expense.

Kevin Van: This decrease was recorded through our R&G segment royalty. In the first quarter of 2024, capital expenditures were approximately $22.0 million, of which $12.0 million, $4.3 million, $1.7 million, $1.5 million, and $1.3 million were related to the ongoing development of Montauk Ag Renewables, our second Apex facility, the Blue Granite RNG project, our Bowerman RNG project, and the Pico Digestion Capacity Increase, respectively. We also acquired approximately 42 acres of property in Turkey, North Carolina, which shares the property line of our existing property. As we continue to strategically plan for the Montauk Ag Renewable Development.

Kevin Van: In the first quarter of 2024 capital expenditures were approximately 22.0 million of which 12.0 million $4 3 million $1 7 million $1 5 million and $1 3 million were related to the ongoing development of <unk> add renewables, our second apex facility the blue granted R&D project.

Kevin Van: Our Bauer mean, R&D project and the Pico digestion capacity increase respectively.

Kevin Van: We also acquired approximately 42 acres of property in Turkey, North Carolina, which shares the property line of our existing property as we continued to strategically plan, where the Montauk agro new aboard development.

Kevin Van: As of March 31st, 2024, we had cash and cash equivalents of approximately $63.3 million. Adjusted EBITDA for the first quarter of 2024 was $9.5 million, an increase of $17.9 million or 212.7% compared to adjusted EBITDA of a negative $8.4 million for the first quarter of 2023. EBITDA for the first quarter of 2024 was $8.9 million, an increase of $17.8 million compared to EBITDA of a negative $9.0 million for the first quarter of 2023.

Kevin Van: As of March 31, 2024, we had cash and cash equivalents of approximately $63 3 million.

Kevin Van: Adjusted EBITDA for the first quarter of 2024 with $9 5 million, an increase of $17 9 million or 212, 7% compared to adjusted EBITDA of a negative $8 4 million for the first quarter of 2023.

Kevin Van: EBITDA for the first quarter of 2024 was $8 9 million, an increase of $17 8 million compared to EBITDA of a negative 9.0 million for the first quarter of 2023.

Kevin Van: Net income for the first fiscal quarter of 2024 increased $5.6 million, or 148.8% compared to net income for the first quarter of 2023. Our income tax expense increased approximately $12.5 million, or 103.4%, for the first quarter of 2024 as compared to the first quarter of 2023. The difference in effective tax rates between the 2024 first quarter and the 2023 first quarter primarily relates to the increase in pre-tax income for the first quarter of 2024 as compared to the first quarter of 2023. I'll now turn the call back over to Sean.

Kevin Van: Net income for the first fiscal quarter of 2024 increased $5 6 million or 148, 8% compared to net income for the first quarter of 2023.

Kevin Van: Our income tax expense increased approximately $12 5 million or 103, 4% for the first quarter of 2024 as compared to the first quarter of 2023.

Kevin Van: The difference in effective tax rates between the 2024 first quarter end of 2023 first quarter, primarily relate to the increase in pre tax income for the first quarter of 2024 as compared to the first quarter of 2023.

Kevin Van: I'll now turn the call back over to Sean.

Sean McClain: Thank you Kevin.

Sean McClain: In closing, and though we don't provide guidance as to our internal expectations as to the market price of environmental attributes, including the market price of D3 rents, we are reaffirming our full year 2024 outlook provided in March 2024. For 2024, we expect our R&G production volumes to range between 5.8 and 6.1 million MMBTU, with corresponding R&G revenues to range between $195 to $215 million. We expect our 2024 Renewable Electricity production volumes to range between 190 and 200,000 MWh, with corresponding Renewable Electricity revenues to range between 18 and 19 million. And with that, we will pause for any questions.

Sean McClain: In closing and though we don't provide guidance as to our internal expectations on the market price of environmental attributes, including the market price of <unk> III rents. We are reaffirming our full year 2024 outlook provided in March 2024.

Sean McClain: For 2024, we expect our R&D production volumes to range between five eight and $6 1 million and then btu with corresponding R&D revenues to range between $195 million to $215 million, we expect our 2020 for renewable electricity production volumes to range between 190 and 200.

Sean McClain: <unk> megawatt hours with corresponding renewable electricity revenue to range between 18, and $19 million and with that we will pause for any questions.

Speaker Change: And thank you.

Operator: Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

Speaker Change: As a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star. One again, please standby will be compile the Q&A roster and one moment for our first question.

Operator: Please stand by while we compile the Q&A roster. And one moment for our first question. And our first question comes from Paul Chang from Scotiabank. Your line is now open. Hi.

Paul Chang: And our first question comes from Paul Cheng from Scotiabank. Your line is now open.

Operator: Hi, good afternoon. Thank you, gentlemen. Maybe this is for John.

Operator: Hi.

Paul Chang: Thank you gentlemen.

Paul Chang: Maybe this is for John.

Paul Chang: I understand that from time to time make decision, whether you want to sell off the available wind or the quarter.

John Ciroli: I understand that from time to time you make decisions whether you want to sell all of the available wind or not in a particular quarter. But from the outside, is there any indicator, or we're trying to understand the process, how you're going to come about making, how much of the wind you will decide to sell in a particular quarter? Is there any indicator from the outside that we should check? And based on that, we'll be able to have some kind of rule of thumb. We can guess what that volume may look like.

John Ciroli: But from the old site standing indicator, we turned to understand the process.

John Ciroli: How are you going to come.

John Ciroli: Making how much of the wins with the scientists that we get in a particular quarter.

John Ciroli: Indicate that from that also like we said check and based on that we'll be able to have some kind of a rule of thumb.

John Ciroli: We can get that whats that one they may look like.

John Ciroli: Thanks, Paul. Good question. How we determine the volume of RINs that we sell is as closely as we can tie it to the K the purchasing cadence of the obligated parties. So rather than timing the market, and obviously all sales subjected to as much analysis as we can place on publicly available information regarding the RFS, regarding waiver credits, regarding the possibility of any adjustments to the plan in general, we focus on the obligated parties as opposed to selling to any midstream intermediaries on a month-to-month or quarter-to-quarter basis.

Speaker Change: Thanks, Paul.

Speaker Change: Good question.

John Ciroli: How we determine the volume of Rins that we sell.

John Ciroli: As as closely as we can tie it to the cadence the purchasing cadence of the obligated parties. So.

John Ciroli: Rather than timing the market and obviously.

John Ciroli: <unk> sales are subject to as much analysis as we can place into publicly available information regarding the RFS regarding waiver credits regarding.

John Ciroli: The possibility of any adjustments to the plan in general.

John Ciroli: We focus on the obligated parties as opposed to selling to any midstream intermediaries on a month to month or quarter to quarter basis. So invariably it results in its an annual program. So it ends up being heavier weighted from the midpoint of the year to the back half of the.

John Ciroli: So invariably, it results in – it's an annual program, so it ends up being heavier weighted from the midpoint of the year to the back half of the year. Decisions are typically purchased more thinly, particularly in the first quarter, but that's about all the guidance I can really provide in terms of really what drives those decisions. We try to participate very meaningfully in the RFS program, and the best way to do that is to get the RINs in the hands of seamlessly into the obligated parties and have them retired as such.

John Ciroli: A year.

John Ciroli: Volumes are typically purchased more thinly, particularly in the first quarter.

John Ciroli: That's about all the guidance I can really provide in terms of really what drives those decisions. We try to play a very meaningfully into the RFS program and the best way to do that is to get the rins in the hands seamlessly into the obligated parties and have them retired as such.

Operator: and thank you. And one moment for our next question. And our next question comes from Samia Jain from UBS. Your line is now open.

Speaker Change: And thank you.

Speaker Change: And one moment our next question.

Samia Jain: And our next question comes from Sameer <unk> from UBS. Your line is now open.

Samia Jain: Hi, Thanks, guys.

Samia Jain: Last quarter, you had mentioned.

Operator: Okay.

Operator: Apparel.

Samia Jain: Secondly, sorry fourth quarter.

Samia Jain: Fourth I guess, what caused you guys to push that back to 25.

Sean McClain: primarily it was related to the timing of when we can get that site up and operational. And just, you know, from the fourth quarter, we noted that there were just some permits or components that were taking longer to get on site and operational than we were anticipating. We still do believe to have that commissioned in the first quarter of 2025.

Samia Jain: Primarily it was related around the timing of.

Sean McClain: When we can get that site up and operational.

Sean McClain: And just.

Sean McClain: From the fourth in the fourth quarter. We noted that there were just some <unk>.

Sean McClain: Permits are components that we're taking a longer to get on site and operational to decommission than we are anticipating we still do believe to have that commissioned in the first quarter of 2025, but I do want to point out that it was a gas rights agreement trigger that would enable that was.

Sean McClain: I do want to point out that it was a gas rights agreement trigger that was enabled, that was triggered requiring this second facility to meet the capacity needs as the landfill host is bringing waste into the site. Even after we expect that site to be commissioned, we're anticipating some excess capacity as the landfill continues to bring in new waste to the site for us to be able to utilize that full capacity.

Sean McClain: Triggered requiring the second facility to meet the capacity needs as the landfill host is bringing waste into the site. Even after we expect that site decommission, we're anticipating some excess capacity as the landfill continues to bring in new ways to the site for us to be.

Sean McClain: But mainly, it was a combination of permitting and various other components related to the actual construction of that second facility that delayed us from commissioning into the first quarter of 2025. We don't anticipate that it will materially impact our production volumes for 2024 and Thang.

Sean McClain: But to utilize that full capacity, but mainly it was a combination of of permitting and various other componentry related to the actual construction of that second facility that delayed us from commissioning into the first quarter of 2025, we don't anticipate that to materially impact our production volumes for 2002.

Sean McClain: Four.

Operator: And thank you. And if you would like to ask a question, that is star 11. Again, if you would like to ask a question, that is star 11. And one moment for our next question. And our next question comes from Matthew Blair with Tudor Pickering and Holt and Company. Your line is now open.

Sean McClain: And thank you and then if you would like to ask a question that is star one one again, if you would like to ask a question that is star one one and one moment our next question.

Operator: And our next question comes from Matthew Blair with Tudor Pickering, Holt <unk> Company. Your line is now open.

Operator: Thanks and good afternoon. I was hoping you could share a little bit more about the, I think it was a process equipment failure at Rumpke in the first quarter. Has that been fixed? And if not, when would you expect that to be fixed? And what kind of impact might that have had on Q1 and potentially into Q2 production?

Matthew Blair: Thanks, and good afternoon, I was hoping you could share a little bit more about the.

Operator: I think it was a process equipment failure from key in the first quarter.

Operator: Has that been fixed.

Operator: If not when would you expect that to be fixed and what kind of impact might that have had on Q1 and potentially into the Q2 production.

Speaker Change: Thanks, Matthew obviously, we are aware of the environmental collection matters that we had discussed in our fourth quarter at <unk> as well, we're continuing to work through that unexpected process equipment failure was associated with with efficiency at certain of our processing equipment either in compression.

Operator: Or some media that we identified as we're going through the facility in the first quarter of those two matters sustainably both of them, we expect to be resolved in the second quarter and as I noted that that was a drag on our first quarter results of lumpy pulling the overall.

Operator: Production period over period down 55000, or so that might compare back to the first quarter of 2023, but again, we expect to have that those failures remediated during the second quarter of 2024.

Speaker Change: And thank you.

Speaker Change: And one moment for a follow up question.

Operator: and thank you, and one moment for a follow-up question. And our follow-up question comes from Paul Chang from Scotia Bank. Your line is now open.

Operator: And my follow up question comes from Paul Cheng from Scotiabank. Your line is now open.

Operator: Hey John, do you have any kind of guidance for the full year op-eds for the LMG and the LEG?

Paul Chang: Hey, John do you have any kind of guidance.

Paul Chang: Guidance for the full year Opex pull Dow MGM dellucci.

John Ciroli: We generally, Paul, leave our guidance expectation announcements to production and revenues. Historically, we haven't given guidance towards operating expenses for either segment or our GNA. I'll leave our commentary at that level with

Paul Chang: We generally call leave our guidance expectation announcements to production and revenues.

John Ciroli: Historically, we haven't given guidance towards operating expenses for either segment or our G&A.

John Ciroli: So I'll leave our commentary at that level at this point.

Operator: And thank you. And one moment for our next question, our follow-up question. And our follow-up question comes from Matthew Blair from Tudor Pickering Halt & Company. Your line is now open.

Speaker Change: And thank you and one moment our next question.

Matthew Blair: A follow up question.

Operator: And a follow up question comes from Matthew Blair from Tudor Pickering, Holt <unk> Company. Your line is now open.

Operator: Hi, thanks for taking my follow up. So I think that roughly 1 4th of your current portfolio is on six offtake, you know, getting like a fixed price rather than selling into the transportation market and getting the D3 RIN. You mentioned your growth projects, I think it was 1.25 million MMBTU in the hopper. So as you continue to grow, do you anticipate keeping that roughly like one fourth fixed ratio, or do you think that you'll move more into the spot market? And then could you also talk about any sort of trends you're seeing in fixed pricing? You know, are utilities paying a higher amount for RNG given the strength of the D3 RIN market?

Matthew Blair: Hi, Thanks for taking my follow ups. So I think that roughly one fourth of your current portfolio is on fixed.

Operator: Offtake.

Operator: Getting like a fixed.

Operator: Price rather than funding the transportation market and get into <unk>, you mentioned that your growth projects I think it was 1.25 million btu in the Hopper.

Operator: As you continue to grow do you anticipate keeping that roughly like one fourth fixed ratio.

Operator: Or do you think that Youll move more into the spot market and then could you also talk about any sort of trends you're seeing on on the fixed pricing our utilities paying a higher.

Operator: Amount for R&D, given the strength of the <unk> RIN market. Thanks.

Speaker Change: Sure Matthew.

Operator: For sure we're continuing to evaluate how we are going to contract the volumes that are coming through our development pipeline as these things are coming online.

Operator: We have a fairly robust RFP process.

Operator: And we entertain as we have previously.

Operator: Multiple forms of monetization, we're looking at fixed price opportunities were.

Operator: We're looking at those opportunities in the voluntary market, we have deployed in the past.

Operator: Margin share type of agreements, where we take a.

Operator: Base fixed price, if we don't want to lock a higher percentage of our portfolio and lose the opportunity that the RFS provides as youre selling those rents directly to the obligated parties Youll put a sharing mechanism in place beyond that fixed price floor as a component of upside.

Operator: All of these things have been in play we continue to look at opportunities in the European market.

Operator: Under the Red II directive for some of the volumes.

Operator: And we're continuing to expand.

Operator: What it is that we are monetizing to allow for that flexibility so with our development in North Carolina.

Operator: The ability to take those volumes initially for this first phase under a fixed price long term agreement with Duke that we'll have power and the Rex you are able to allow for call.

Operator: Call. It the financial patients that is required to make sure that these <unk> can be sold.

Operator: Under existing structures that allows you to self market and to do so directly to those obligated parties.

Speaker Change: And then just to tag on there Matthew through our RFP process, especially over the last handful of months, we've seen some movement in the voluntary market and that's one of the tougher price points for us to nail down, but some movement, but still generally in that call. It <unk>.

Operator: <unk> $2023 or so range plus or minus is what we continue to see so if it was 18 or 20 call. It six months ago, maybe we've seen some movement up to 'twenty or 'twenty two within the last six months, but again, it's still basically been around that type of range. We haven't seen anything that is really driving a.

Operator: Value from a call it plus $3 rent at this point.

Speaker Change: And thank you and one moment for a follow up question.

Operator: And a follow up question comes from Paul Cheng from Scotiabank. Your line is now open.

Operator: Hey.

Operator: So can you have a.

Operator: Does that took away about katyn pick pool.

Operator: The increase over the next the second quarter saw continued which the full capacity by 2025.

Operator: Yes.

Speaker Change: I think your question is in regards to the deployment of our Montauk at renewables facilities. So we will have right now to complete the first phase first phase defined as the Duke wreck agreement.

Operator: We will look to target the collection of waste from 120000 hogs spaces, and we will have <unk>.

Operator: Seven reactor processing lines, the first of which is.

Operator: Imminently.

Operator: <unk> commissioning and will be commissioning through the end of June.

Operator: And then the cadence of those will be.

Operator: I'd say fairly linear between that point all the way through late 2025.

Operator: And thank you and I'm showing no further questions I would now like to turn the call back over to Sean for closing remarks.

Speaker Change: Thank you.

Sean McClain: Thanks.

Speaker Change: And thank you all for taking the time to join US on our conference call. Today, we look forward to speaking with you when we present, our second quarter 2024 results.

Sean McClain: Sure, Matthew. For sure, we're continuing to evaluate how we are going to contract the volumes that are coming through our development pipeline as these things come online. We have a fairly robust RFP process, and we entertain, as we have previously, multiple forms of monetization. We're looking at fixed price opportunities. We're looking at those opportunities in the voluntary market. We have deployed more margin share type agreements where we take a base fixed price.

Sean McClain: If we don't want to lock up a higher percentage of our portfolio and lose the opportunity that the RFS provides as you're selling those RINs directly to the obligated parties, you'll put a sharing mechanism in place beyond that fixed price floor as a component of the upside. All of these things are in play. We continue to look at opportunities in the European market under the REDD2 directive for some of the volumes, and we're continuing to expand what it is that we are monetizing to allow for that flexibility.

Sean McClain: So, with our development in North Carolina and the ability to take those volumes initially for this first phase under a fixed price, long-term agreement with Duke that will have power and the RECs, you are able to allow for, call it, the financial patience that is required to make sure that these RINs can be sold under existing structures that allow you to self-market and do so directly to those obligated parties.

Operator: Kevin or Sean, do you have any guidance to provide about the cadence of the PICO volume increase over the next several quarters until you reach full capacity by 2025?

Sean McClain: And then just to add on there, Matthew, through our RFP process, especially over the last handful of months, we've seen some movement in the voluntary market, and that's one of the tougher price points for us to nail down, but some movement, but still generally in that call it $18, $20, $23 or so range, plus or minus, is what we continue to see. So if it was $18 or $20, call it six months ago, maybe we've seen some movement up to $20 or $22 within the last six months, but again, it's still basically been around that type of range. We haven't seen anything that is really driving value from a call it plus $3 RIN at this point.

Sean McClain: I think your question is in regards to the deployment of our Montauk Ag Renewables facility. So we will have to complete the first phase, the first phase defined as the Duke REC agreement, right now. We will look to target the collection of waste from 120,000 hog spaces, and we will have seven reactor processing lines, the first of which is imminently starting commissioning and will be commissioning through the end of June. And then the cadence of those will be, I'd say, fairly linear between that point all the way through late 2025.

Operator: And thank you. And one moment for our follow-up question. And our follow-up question comes from Paula Chang from Scotiabank. Your line is now open.

Sean McClain: and thank you. And I'm showing no further questions. I would now like to turn the call back over to Sean for closing remarks.

Sean McClain: And thank you all for taking the time to join us on our conference call today. We look forward to speaking with you when we present our second quarter 2024 results. This concludes today's conference call. Thank you for participating. You may now. [inaudible] Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music, ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?

Sean McClain: This concludes today's conference call. Thank you for participating you may now disconnect. Thank you.

Operator: This concludes today's conference call. Thank you for participating. [inaudible] Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? [inaudible] Good afternoon, everyone, and thank you for participating in today's conference.

Operator: I would like to turn the call over to Mr. John Ciroli if he provides some important cautions regarding forward-looking statements and non-GAAP financial measures containing earnings materials are made on this call. John, please go ahead.

Operator: [music].

Operator: Yes.

Operator: [music].

Operator: Okay.

Operator: [music].

Operator: Okay.

Operator: [music].

John Ciroli: Thank you and good afternoon, everyone. Welcome to Montauk Renewables' earnings conference call to review the first quarter 2024 financial and operating results and development. I'm John Ciroli, Chief Legal Officer and Secretary at Montauk. Joining me today are Sean McClain, Montauk's President and Chief Executive Officer to discuss business development, and Kevin Van Asland, Chief Financial Officer, to discuss our first quarter 2024 financial and operating results.

John Ciroli: [music].

John Ciroli: At this time, I would like to direct your attention to our forward-looking disclosure statement. During this call, certain comments we make constitute forward-looking statements and, as such, involve a number of assumptions, risks, and uncertainties that could cause the company's actual results or performance to differ materially from those expressed in or implied by such forward-looking statements. These risk factors and uncertainties are detailed in Montauk Renewables' SEC file. Our remarks today may also include non-GAAP financial measures.

Sean McClain: Good afternoon, everyone and thank you for participating in today's conference call I would like to turn the call over to Mr. Johnson thoroughly as he provide some important cautions regarding forward looking statements and non-GAAP financial measures contained in the earnings materials or made on this call. John. Please go ahead.

John Ciroli: Can you discuss business development, and Kevin Vann, Aslib, Chief Financial Officer to discuss our first quarter 2024 financial and operating results.

John Ciroli: At this time I would like to direct your attention to our forward looking disclosure statements.

John Ciroli: Or performance to differ materially from those expressed in or implied by such forward looking statements. These risk factors and uncertainties are detailed and whatnot montoc renewables SEC filings.

John Ciroli: Our remarks today May also include non-GAAP financial measures, we present EBITDA.

Q1 2024 Montauk Renewables Inc Earnings Call

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