Q3 2024 Montauk Renewables Inc Earnings Call

Operator: Good afternoon, everyone, and thank you for participating in today's conference call.

Yeah.

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

Operator: 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 contained in the earnings material or made in this call.

John Ciroli: John, please go ahead. Thank you, and good afternoon, everyone. Welcome to Montauk Renewables earnings conference call to review the third quarter 2024 financial and operating results and developments.

Speaker Change: Thank you and good afternoon, everyone welcome to Montauk Renewables earnings Conference call to review, the third quarter 2024 financial and operating results and developments of John's Raleigh, Chief Legal officer and Secretary at Montauk joining.

John Ciroli: I'm John Ciroli, Chief Legal Officer and Secretary at Montauk.

John Ciroli: 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 third quarter 2024 financial and operating results. 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 filings.

Speaker Change: And me today are Shawn Mcclain, montage, President and Chief Executive Officer to discuss business development, and Kevin Vann, Azlon, Chief Financial Officer to discuss our third quarter 2024 financial and operating results.

Speaker Change: At this time I would like to direct your attention to our forward looking disclosure statements. During this call certain comments, we may 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.

Speaker Change: These risk factors and uncertainties are detailed in Montauk renewables SEC filings. 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.

John Ciroli: 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.

Speaker Change: Items that we do not believe are indicative of our core operating performance. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles.

John Ciroli: These non-GAAP financial measures are not prepared in accordance with generally accepted accounting 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 third quarter 2024 earnings press release and Form 10-Q issued and filed this afternoon, which are available on our website at https://ir.montaukrenewables.com.

Speaker Change: 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 third quarter 2024 earnings press release and Form 10-Q issued and filed this afternoon, which are available on our website at.

Speaker Change: H T T P S O N.

I went back slash IR dot Montoc renewables dot com after our remarks, we'll open the call up to questions. We ask that you. Please keep to one question to accommodate as many questions as possible.

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.

Sean McClain: With that, I will turn the call over to Sean. Thank you, John. Good day, everyone, and thank you for joining our call.

That I will turn the call over to Sean.

Thank you John and good day, everyone and thank you for joining our call I'd.

Sean McClain: I'd like to begin with commending our operations staff for the production levels we achieved both during the 2024 third quarter and for the nine months ended September 30th, 2024. For two consecutive quarters, our Houston, Texas facilities were challenged by severe weather events, resulting in multi-day utility power outages. Our Houston, Texas-based facilities account for over half of our R&G production. While we estimate production losses during the first nine months of 2024 due to these weather events, total approximately 100,000 MMBTUs, our employee safety and the operability of all facility equipment were preserved throughout.

Sean: I'd like to begin with commending our operation staff for the production levels. We achieved both during the 2020 for third quarter and for the nine months ended September 32024.

Sean: Two consecutive quarters, our Houston, Texas facilities were challenged by severe weather events, resulting in multi day utility power outages.

Sean: Our Houston, Texas based facilities account for over half of our R&D production.

Sean: While we estimate production losses during the first nine months of 2024 due to these weather events total approximately 100000 and that might be to use our employee safety and the operability of all facility equipment will preserve throughout.

Sean McClain: Our development activities continue with the construction of our second APEX R&G facility. As previously discussed, the primary catalyst for the construction of the second APEX R&G facility was a gas rights contractual requirement trigger by increasing landfill waste intake, and in turn, gas feedstock availability that has periodically exceeded the processing capacity of our current facility. We continue to expect there to be a period of excess processing capacity that is subject to the rate at which the gas feedstock availability increases from landfill activities. We remain on schedule for a 2025 commission.

Sean: Our development activities continue with the construction of our second apex R&D facility as previously discussed the primary catalyst for the construction of the second apex R&D facility was a gas rights contractual requirement trigger by increasing landfill waste and take and in turn gas feedstock availability. It is periodically.

Sean: Exceeded the processing capacity of our current facility.

Sean: We continue to expect there to be a period of excess processing capacity that is subject to the rate at which the gas feedstock availability increases from landfill activities. We remain on schedule for 2025 commissioning.

Sean McClain: Related to our Blue Granite RNG project, we have been informed by the Interconnection Utility that its near-term prioritization continues to be remediation efforts from the impacts of Hurricane Helene. The prioritization of these remediation efforts from Hurricane Helene will delay necessary utility upgrades for our facility interconnection, shifting our commissioning expectation of our R&G facility into 2027. Our pace of capital deployment for this project has slowed due to the delay of the utility and we do not expect to incur significant capital expenditures on this project through the remainder of 2024.

Sean: Related to our Blue granite R&D project, we haven't been informed by the interconnection the utility and its near term prioritization continues to be remediation efforts from the impacts of Hurricane Harvey the <unk>.

Sean: Organization of these remediation efforts from Hurricane Helene will delay necessary utility upgrades for our facility interconnection shifting our commissioning expectation of our R&D facility into 2027 or.

Sean: Our pace of capital deployment for this project has slowed due to the delay of the utility and we do not expect to incur significant capital expenditures on this project through the remainder of 2024.

Sean McClain: As the company continues to develop its R&G facility at the Frank R. Bowerman Landfill in California, we remain committed to support the landfill host in its management of its well field and its flare facility permitting requirements. Related to those landfill obligations, Orange County Waste and Recycling has proposed corresponding changes to its well-filled and flare facility, which could result in impacts to our existing and agreed-upon R&G facility commissioning schedule. We continue to work with the landfill on those proposed changes and assess what, if any, impact these changes could additionally have related to the receipt of the required regional regulatory construction permits and the potential impact of delayed commissioning into 2027.

Sean: As the company continues to develop its R&D facility at the freight car bauerlein landfill in California, we remain committed to support the landfill host and its management, if it's well field and its flare facility permitting requirements related to the Guangzhou obligations Orange County waste and recycling has proposed corresponding changes to its welfare and flare facility.

Sean: Which could result in impacts to our existing and agreed upon RG facility commissioning schedule.

Sean: We continue to work with the landfill on those proposed changes and assess what if any impact. These changes could additionally half related to the receipt of the required regional regulatory construction permits and the potential impact of delayed commissioning into 2027.

Sean McClain: As a continuation of our previously announced CO2 development opportunity with European Energy, we have received equipment proposals from multiple vendors, all having prior experience with liquid CO2 capture and processing. We continue to anticipate commissioning in 2027 and expect the capital investment to range between $65 million and $75 million.

Sean: As a continuation of our previously announced Sidoti development opportunity with European Energy, we have received equipment proposals from multiple vendors all having prior experience with liquid cotwo happier and processing. We continue to anticipate commissioning in 2027 and expect the capital investment to range between $65 million.

Sean: 75 million.

Sean McClain: We also continue to engage with various regulatory agencies in North Carolina related to our Swine Waste to Energy Development Initiative project in Turkey, North Carolina, Montauk Ag Renewables. In October 2024, we received notice from the North Carolina Utilities Commission that our application for a Certificate of Public Convenience and Necessity and registration for a new renewables energy facility related to the sale of electricity to generate swine wrecks was approved for public notice. Additionally, Piedmont Natural Gas has submitted the design of our gas interconnection for regulatory approval. We continue to expect the interconnection construction to begin in 2024 and to be completed in line with our commissioning timeline.

Sean: We also continue to engage with various regulatory agencies in North Carolina related to our swine waste to energy develop initiative project in Turkey, North Carolina, Multaq Agra doable.

Sean: In October 2024, we received notice from the North Carolina Utilities Commission at our application for a certificate of public convenience and necessity and registration for a new renewable energy facility related to the sale of electricity to generate swine Rex was approved for public notice.

Sean: Additionally, Piedmont natural gas has submitted the design of our gas interconnection for regulatory approval.

Sean: We continue to expect the interconnection construction to begin in 2024 and to be completed in line with our commissioning timeline.

Sean McClain: This gas interconnection will enable us to engage in registration and regulatory approval processes under programs such as the Federal Renewable Fuel Standard and the California Low Carbon Fuel Standard. We have completed the majority of the installation of collection process equipment on two farms for which we have feedstock agreements and continue to optimize our collection. We also continue to bring additional farms under contract in securing the necessary feedstock supply for our first phase for Montauk Ag Renewables project in Turkey, North Carolina.

Sean: This gas interconnection will enable us to engage in registration and regulatory approval processes under programs such as the favorable renewable fuel standard and the California low carbon fuel standard.

Sean: We have completed the majority of the installation of collection process equipment on two farms for which we had feedstock agreements and continue to optimize our collection methods.

Sean: We also continued to bring additional farms under contract and securing the necessary feedstock supply for our first phase for <unk> project in Turkey, and North Carolina.

Sean McClain: New trends impacting inlet fuel supply at several of our projects have been identified during the third quarter of 2024, critically shaping our updated 2024 production expectations. Several of our landfill hosts have begun to delay their installation of, or delay our ability to install, wellfield collection infrastructure in active waste placement areas, a practice historically common and critical to our projections of feedstock gas, and therefore, production. These landfill-driven delays will impact the timing of collection system enhancement installations and the resulting timing of our production. We expect these trends to continue through 2025.

Sean: New trends impacting inlet fuel supply at several of our projects have been identified during the third quarter of 2020 for critically shaping our updated 2024 production expectations. Several of our landfills have begun to delay their installation of or art or delay our ability to install while feel collection.

Sean: Infrastructure inactive waste placement areas, our practice, historically carbon and critical to our projections of feedstock gas and therefore production.

Sean: These landfill driven delays will impact the timing of collection system enhancement installations, and the resulting timing of our production increases we expect these trends to continue through 2025.

Sean McClain: The company records revenues from its production and sale of R&G and the generation and sale of its environmental attributes derived from R&G, such as RINs and LCFS credits. Our R&G revenues for environmental attributes are recorded net of a portion of either the environmental attributes themselves or a portion of their revenues shared with off-take counterparties as consideration for such counterparties using the R&G as a transportation. We have certain pathway provider sharing agreements expiring at the end of 2024. While we have not experienced a significant increase in the environmental attributes or the related revenues shared with pathway providers related to our current renewals in 2024, our current pathway renewals have been at higher percentages than historically contracted.

Sean: The company recorded revenues from its production and sale of RMG in the generation and sale of its environmental attributes derived from R&D such as rent now CFS credits.

Sean: Our R&D revenues from environmental attributes are recorded net of a portion of either the environmental attributes themselves, where a portion of their revenue shared with off take counterparties as consideration for such Counterparties using DRG is transportation fuel.

Sean: We have certain pathway provider sharing agreements expiring at the end of 2024.

Sean: We have not experienced a significant increase in the environmental attributes or the related revenue shared with pathway providers related to our current renewals in 2024, our current pathway renewals have been at higher percentages that historically contracted.

Sean McClain: We are also seeing current proposed pathway renewals for percentages significantly higher than those under our historical agreement.

Sean: We are also seeing current proposed pathway renewals for percentages significantly higher than those under our historical agreements.

Sean McClain: The company monetizes a portion of its R&G production under fixed price agreements, which provide floor prices in excess of commodity indices. We have received offers to consider monetizing a larger portion of our RNG through fixed price contracts that could mitigate the impact of these aforementioned pathway percentage increases. Historically, we have monetized less than 25% of our R&G volumes under these fixed price agreements. We are considering entry into multiple short-term contracts throughout 2025, some potentially increasing our historical percentage of volumes monetized under fixed price arrangements to provide additional time to evaluate and navigate these recent market trends related to pathway off.

Sean: The company monetize a portion of its R&D production under fixed price agreements, which provide floor prices in excess of commodity indices.

Sean: We have received offers to consider monetizing a larger portion of our R&D through fixed price contracts that could mitigate the impact of these aforementioned pathway percentage increases.

Historically, we have monetize less than 25% of our RG volumes under these fixed price agreements. We are considering entry into multiple short term contracts throughout 2025, some potentially increasing our historical percentage of volumes monetize under fixed price arrangements to provide additional time to evaluate <unk>.

Sean: Advocate these recent market trends related to pathway off takes.

Kevin Van Asland: And with that, I will turn the call over to Kevin. Thank you, Sean. I will be discussing our third quarter 2024 financial and operating results.

Kevin Vann: And with that I will turn the call over to Kevin.

Kevin Vann: Thank you Sean I'll be discussing our third 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 Asland: Please refer to our earnings press release and the supplemental slides that have been posted to our website for additional information. Total revenues in the third quarter of 2024 were $65.9 million, an increase of $10.2 million or 18.4% compared to $55.7 million in the third quarter of 2023. The increase was primarily related to an increase in the number of RINs we self-marketed from 2024 R&G production in the third quarter of 2024 compared to the third quarter of 2023. Additionally, realized RIN pricing increased approximately 9.5% during the third quarter of 2024 compared to the third quarter of 2023.

Kevin Vann: Total revenues in the third quarter of 2024 were $65 9 million, an increase of $10 2 million or 18.

Kevin Vann: 4% compared to $55 79 in the third quarter of 2023.

Kevin Vann: The increase was primarily related to an increase in the number of brands. We self marketed from 2024 R&D production in the third quarter of 2024 compared to the third quarter of 2023.

Kevin Vann: Additionally, realized RIN pricing increased approximately nine 5% during the third quarter of 2024 compared to the third quarter of 2023.

Kevin Van Asland: Total general and administrative expenses were $10 million for the third quarter of 2024, an increase of $2.2 million or 27.9% compared to $7.8 million in the third quarter of 2023. Employee related costs including stock based compensation were $7.2 million in the third quarter of 2024, an increase of $2.7 million or 59.6% compared to $4.5 million in the third quarter of 2023.

Kevin Vann: Total general and administrative expenses were $10 million for the third quarter of 2024, an increase of $2 2 million or 27, 9% compared to $7 8 million in the third quarter of 2023.

Kevin Vann: Employee related costs, including stock based compensation were $7 2 million in the third quarter of 2024, an increase of $2 7 million or 59, 6% compared to $4 5 million in the third quarter of 2023.

Kevin Van Asland: The increase was primarily related to the accelerated investing of certain restricted share awards as a result of the termination of an employee. Our corporate insurance decreased approximately $0.3 million or 17.1% in the third quarter of 2024 compared to the third quarter of 2023.

Kevin Vann: The increase was primarily related to the accelerated vesting of certain restricted share awards as a result of the termination of an employee.

Kevin Vann: Our corporate insurance decreased approximately <unk> 3 million or 17, 1% in the third quarter of 2024 compared to the third quarter of 2023.

Kevin Van Asland: Turning to our segment operating metrics, I'll begin by reviewing our Renewable Natural Gas Segment. Sean mentioned certain of our Houston, Texas sites were impacted by Hurricane Meryl, causing multi-day utility outages. We produced approximately 1.4 million mmBtu of RNG during the third quarter of 2024, flat compared to 1.4 million during the third quarter of 2023. Our PICO facility produced approximately 27,000 mmBtu more in the third quarter of 2024 as compared to the third quarter of 2023 due to the commissioning of our digestion expansion project. Our Galveston and Coastal facilities produced approximately 27,000 combined more MNBTU in the third quarter of 2024 compared to the third quarter of 2023 due to previously disclosed third quarter of 2023 dry weather conditions impacting gas feedstock availability in that prior period.

Kevin Vann: Turning to our segment operating metrics I'll begin by reviewing our renewable natural gas segment.

Speaker Change: Sean mentioned certain of our Houston, Texas sites were impacted by hurricane barrel, causing multi day utility outages.

Speaker Change: We produced approximately $1 4 million Btu of R&D during the third quarter of 2024 flat compared to $1 4 million during the third quarter of 2023, our Pico facility produced approximately 27000, and then B to you more in the third quarter of 2024 as compared to the third quarter of 2023 due to the commissioning of our digestion expansion.

Speaker Change: Project.

Speaker Change: Our Galveston and coastal facilities produced approximately 27000 combined more MLP to you in the third quarter of 2024 compared to the third quarter of 2023 due to the previously disclosed third quarter of 2023 dry weather conditions impacting gases feedstock availability in that prior period.

Kevin Van Asland: Our Rumpke facility produced approximately 59,000 fewer MMDTU in the third quarter of 2024 as compared to the third quarter of 2023 due to ongoing well field extraction environmental factors. Our Itasca CETA facility produced 22,000 fewer MMBTU in the third quarter of 2024 as compared to the third quarter of 2023 as a result of weather-driven utility outages which impacted our production. Revenues from the Renewable Natural Gas segment during the third quarter of 2024 were $61.8 million, an increase of $10.8 million, or 21.2%, compared to $50.9 million during the third quarter of 2023. Average commodity pricing for natural gas for the third quarter of 2024 was approximately 15.3% lower than the third quarter of 2023.

Speaker Change: Our Rupkey facility produced approximately 59000 <unk> in the third quarter of 2024 as compared to the third quarter of 2023 due to ongoing welfare extraction environmental factors.

Speaker Change: Our attach proceed a facility produced 22000 fewer <unk> in the third quarter of 2024 as compared to the third quarter of 2023, as a result of weather driven utility outages, which impacted our production.

Speaker Change: Revenues from the renewable natural gas segment during the third quarter of 2024 were $61 8 million, an increase of $10 8 million or 21, 2% compared to $50 9 million during the third quarter of 2023.

Speaker Change: Average commodity pricing for natural gas in the third for the third quarter of 2024 was approximately $15, 3% lower than the third quarter of 2023.

Kevin Van Asland: During the third quarter of 2024, we self-marketed 15.8 million RINs representing a 2 million increase or 14.5% compared to 13.8 million RINs self-marketed during the third quarter of 2023. Average pricing realized on RIN sales during the third quarter of 2024 was $3.34 as compared to $3.05 during the third quarter of 2023, an increase of 9.5%. This compares to the average D3 rent index price for the third quarter of 2024 of $3.36 being approximately 11.5% higher than the average D3 rent index price for the third quarter of 2023 of $3.01. At September 30, 2024, we had approximately 0.3 million MMDTUs available for RIN generation and had approximately 0.1 million RINs generated and unsold.

Speaker Change: During the third quarter of 2024, we self marketed $15 8 million brands, representing a $2 million increase or 14, 5% compared to $13 8 million Rins self marketed during the third quarter of 2023 <unk>.

Speaker Change: Average pricing realized when rins sales during the third quarter of 2024 was $3.34 as compared to $3 five during the third quarter of 2023, an increase of nine 5%.

Speaker Change: This compares to the average D. Three rent index price for the third quarter of 2024 of $3 36, being approximately 11, 5% higher than the average <unk> rent index price for the third quarter of 2023 of $3 <unk>.

Speaker Change: At September 32024, we had approximately <unk> 3 million and then get to use available foreign generation and had approximately 0.1 million rins generated an unsold.

Kevin Van Asland: We had approximately 0.3 million MMBTUs available for RIN generation and had approximately 0.8 million RINs generated and unsold at September 30th, 2023. Our profitability is highly dependent on the market price of environmental attributes, including the market price for RINs. As we self-market a significant portion of our RINs, a decision not to commit to transfer available RINs during a period will impact our revenue and operating profits. We have entered into commitments to transfer a portion of the RINs we expect to generate from 2024 fourth quarter production at an average price of approximately $3.52. Our operating and maintenance expenses for our R&G facilities during the third quarter of 2024 were $12.6 million, an increase of $0.7 million or 5.6% compared to $11.9 million during the third quarter of 2023.

Speaker Change: We had approximately zero point $3 million F&B to use available for RIN generation and had approximately 0.8 million rins generated an unsold at September 32023.

Speaker Change: Our profitability is highly dependent on the market price of environmental attributes, including the market price for Rins as we self market a significant portion of our rent a decision not to commit the transfer available returns during a period will impact our revenue and operating profit.

Speaker Change: Entered into commitments to transfer a portion of the Rins, we expect to generate from 2020 for fourth quarter production at an average price of approximately $3 52.

Speaker Change: Our operating and maintenance expenses for our R&D facilities. During the third quarter of 2024 were $12 6 million, an increase of <unk> 7 million or five 6% compared to $11 9 million during the third quarter of 2023.

Kevin Van Asland: Our McCarty Facility operating and maintenance expenses increased approximately $0.4 million, primarily related to well-food operational. Our Tascocita facility operating and maintenance expenses increased approximately $0.4 million, primarily related to an increase in utility expense and a property tax refund received in the prior year, 2023 third quarter. Our FECA facility operating and maintenance expenses increased approximately $0.2 million as a result of timing of digester preventative maintenance. Our APEX facility operating and maintenance expenses decreased approximately $0.4 million, primarily related to reduced utility expense and waste disposal costs. Our coastal facility operating and maintenance expenses decreased approximately $0.2 million, primarily related to reduced utility expense and well-food operational enhancements.

Speaker Change: Our mccarty facility operating and maintenance expenses increased approximately <unk> 4 million primarily related to wealth good operational enhancements.

Speaker Change: Our task Qasida facility operating and maintenance expenses increased approximately <unk> 4 million primarily related to an increase in utility expense and a property tax refund received in the prior year 2023 third quarter.

Speaker Change: Our pekin facility operating and maintenance expenses increased approximately <unk> 2 million as a result of timing of digester preventative maintenance.

Speaker Change: Our apex facility operating and maintenance expenses decreased approximately <unk> 4 million, primarily related to reduced utility expense and waste disposal costs.

Speaker Change: Our coastal facility operating and maintenance expenses decreased approximately <unk> two.

Speaker Change: $2 million, primarily related to reduced utility expense and while foot operational enhancements.

Kevin Van Asland: We produced approximately 41,000 megawatt hours in renewable electricity during the third quarter of 2024, a decrease of approximately 7,000 megawatt hours or 14.6% compared to 48,000 megawatt hours during the third quarter of 2023. Our security facility produced approximately 5,000 megawatt hours less in the third quarter of 2024 compared to the third quarter of 2023 as a result of us ceasing operations in connection with the first quarter of 2024 sale of the gas rights back to the landfill host.

We produced approximately 41000 megawatt hours and renewable electricity during the third quarter of 2024, a decrease of approximately 7000 megawatt hours or 14, 6% compared to 48000 megawatt hours during the third quarter of 2023.

Speaker Change: Our security facility produced approximately 5000 megawatt hours lessen in the third quarter of 2024 compared to the third quarter of 2023 as a result of a ceasing operations in connection with the first quarter of 2020 for sale of the gas right. After the landfill host.

Kevin Van Asland: Revenues from renewable electricity facilities during the third quarter of 2024 were $4.2 million, a decrease of $0.6 million or 12.3% compared to $4.8 million during the third quarter of 2023. The decrease was primarily driven by the cessation of operations at our security facility. Our renewable electricity generation, operating and maintenance expenses during the third quarter of 2024 were $2.7 million, an increase of $0.5 million or 21.8% compared to $2.2 million during the third quarter of 2023. Our Magnolia facility operating and maintenance expenses increased approximately $0.5 million as a result of non-capitalizable costs.

Speaker Change: Revenues from renewable electricity facilities during the third quarter of 2024 were $4 2 million a decrease of <unk> 6 million or 12, 3% compared to $4 8 million during the third quarter of 2023.

Speaker Change: The decrease was primarily driven by the cessation of operations at our security facility.

Our our renewable electricity generation operating and maintenance expenses during the third quarter of 2024 were $2 7 million, an increase of <unk> 5 million or 21, 8% compared to $2 2 million during the third quarter of 2023.

Speaker Change: Our Magnolia facility operating and maintenance expenses increased approximately <unk> 5 million as a result of non capitalized costs.

Kevin Van Asland: During the third quarter of 2024, we recorded impairments of $0.5 million, an increase of $0.5 million compared to less than $0.1 million in the third quarter of 2023. We specifically identified impairment losses in the third quarter of 2024, primarily related to various R&G equipment that was deemed obsolete and REG assets that were impacted under initial startup testing for one of our renewable electricity generation construction work in process. Operating income for the third quarter of 2024 was $22.7 million, an increase of $5.9 million or 35.3% compared to $16.8 million for the third quarter of 2023. R&G operating income for the third quarter of 2024 was $33.6 million, an increase of $9.6 million or 39.7% compared to $24.1 million for the third quarter of 2023.

Speaker Change: During the third quarter of 2024, we recorded impairments of <unk> 5 million, an increase of <unk> 5 million compared to less than <unk> 1 million in the third quarter of 2023.

Speaker Change: Specifically identified impairment losses in the third quarter of 2024, primarily related to various R&D equipment that was deemed obsolete and our assets that were impacted under initial startup testing for one of our renewable electricity generation construction work in process sites.

Speaker Change: Operating income for the third quarter of 2024 was $22 7 million, an increase of $5 9 million or 35, 3% compared to $16 8 million for the third quarter of 2023.

Speaker Change: R&D operating income for the third quarter of 2024 was $33 6 million, an increase of $9 6 million or 39, 7% compared to $24 1 million for the third quarter of 2023.

Kevin Van Asland: Renewable electricity generation operating loss for the third quarter of 2024 was $0.6 million, a decrease of $1.3 million compared to operating income of $0.7 million for the third quarter of 2023.

Speaker Change: Renewable electricity generation operating loss for the third quarter of 2024 was <unk> 6 million a decrease of $1 3 million compared to operating income of <unk> $7 million for the third quarter of 2023.

Kevin Van Asland: Turning to our balance sheet, at September 30, 2024, $58 million was outstanding under our term loan. As of September 30, 2024, our borrowing capacity available under our revolving credit facility remained at $117.8 million. As of September 30, 2024, we generated $43.1 million of cash from operating activities, an increase of 119.9% compared to $19.6 million as of September 30, 2023. Based on our estimate of the present value of our PECO earn out obligation, we recorded a decrease of $1.3 million to the liability at September 30th, 2020. This decrease was recorded through our RNG segment royalty account.

Speaker Change: Turning to our balance sheet at September 32024, $58 million with outstanding under our term loan as of September 32024.

Speaker Change: Our borrowing capacity available under our revolving credit facility remains at $117 8 million.

Speaker Change: As of September 32024, we generated $43 1 million of cash from operating activities, an increase of 119, 9% compared to $19 6 million as of September 32023.

Speaker Change: Based on our estimate of the present value of our <unk> earn out obligation. We recorded a decrease of $1 3 million to the liability at September 32020 for this decrease was recorded through our R&D segment royalty expense.

Kevin Van Asland: For the nine months ended September 30th of 2024, we incurred approximately $53.3 million in capital expenditures, of which $25 million was for Montauk Ag Renewables. $10 million was for the second APEX facility. $7.9 million was for the Bowerman R&G project. $1.8 million was for the Blue Granite R&G project. And $1.3 million for the Pico Digestion Capacity Increase project.

Speaker Change: For the nine months ended for the nine months ended September 32024, we incurred approximately $53 3 million and capital expenditures of which $25 million was for <unk> renewables.

Speaker Change: $10 million for the second apex facility.

Speaker Change: $7 9 million was for the <unk> R&D project.

Speaker Change: $1 8 million was for the Blue granite R&D project and $1 3 million for the Pico digestion capacity increase project.

Kevin Van Asland: 2024 we expect our non-development 2024 capital expenditures to range between 14 and 16 million. Additionally, we currently estimate that our existing 2024 Development and Capital Expenditures will range between $55,000 and $65,000. As of September 30, 2024, we had cash and cash equivalents of approximately $55 million and accounts and other receivables of approximately $19.2 million. The majority of all of the accounts receivable balance is our September 2024 RIN sales, which were collected after September 30, 2024. Adjusted EBITDA for the third quarter of 2024 was $29.4 million, an increase of $7 million or 31.3% compared to $22.4 million for the third quarter of 2023.

Speaker Change: For 2024, we expect our non development 2020 for capital expenditures to range between 14 and $16 million.

Speaker Change: Additionally, we currently estimate that our existing 2020 for development capital expenditures will range between $55 to $65 million.

Speaker Change: As of September 32024, we had cash and cash equivalents of approximately $55 million and accounts and other receivables of approximately $19 2 million.

Speaker Change: The majority of all of the accounts receivable.

Speaker Change: <unk> balanced at our September 2020 for RIN sales, which were collected after September 32024.

Speaker Change: Adjusted EBITDA for the third quarter of 2024 was $29 4 million, an increase of $7 million or 31, 3% compared to $22 4 million for the third quarter of 2023.

Kevin Van Asland: EBITDA for the third quarter of 2024 was $28.9 million, an increase of $6.5 million, or 64.3%, compared to EBITDA of $22.4 million for the third quarter of 2023. Net income in the third quarter of 2024 was $17 million compared to net income of $12.9 million in the third quarter of 2023. Our income tax expense increased approximately $1.2 million, or 41.2%, for the third quarter of 2024 as compared to the third quarter of 2023.

Speaker Change: EBIT for the third quarter of 2024 was $28 9 million, an increase of $6 5 million or 64, 3% compared to EBITDA of $22 4 million for the third quarter of 2023.

Speaker Change: Net income in the third quarter of 2024 was $17 million compared to net income of $12 9 million in the third quarter of 2023.

Speaker Change: Our income tax expense increased approximately $1 2 million or 41, 2% for the third quarter of 2024 as compared to the third quarter of 2023.

Sean McClain: I'll now turn the call back over to Sean. Thank you, Kevin. In closing, while we don't provide guidance as to our internal expectations on the market price of environmental attributes, including the market price of D3 RENs, we would like to provide an updated full year 2024 outlook. The aforementioned trends in landfill-driven delays of well-filled projects in active wasteland areas result in our full-year R&G production volumes to range between 5.5 and 5.7 MMBTUs, million MMBTUs, and corresponding R&G revenues to range between $175 million and $185 million. We expect renewable electricity production volumes to range between 180 and 185,000 megawatt hours.

Speaker Change: I'll now turn the call back over to Sean.

Sean: Thank you Kevin.

Sean: In closing, while we don't provide guidance as to our internal expectations on the market price of environmental attributes, including the market price of <unk> Rens, who would like to provide an updated full year 2024 outlook yes.

Sean: The aforementioned trends in landfill driven delays of Westfield projects and active waste wastewater areas result in our full year R&D production volumes to range between five five and $5 seven <unk> million, maybe to use and corresponding R&D revenues to range between $175 million and 180.

Sean: We expect renewable electricity production volumes to range between 180, and 185000 megawatt hours corresponding renewable electricity revenues are expected to range between 17 and $18 million.

Sean McClain: Corresponding renewable electricity revenues are expected to range between 17 and 18 million.

Sean McClain: It is also important to note, recent market trends potentially impacting our near-term renewal strategies for offtake pathway sharing and fixed price agreements may impact how we provide 2025 guidance as it relates to R&D revenues.

Sean: It is also important to note recent market trends potentially impacting our near term renewal strategies for offtake pathway sharing in fixed price agreements may impact, how we provide 2025 guidance as it relates to R&D revenues and with that we will pause for any questions. Thank you. Sir reminder, that is star one.

Operator: And with that, we will pause for any questions. Thank you. As a reminder, that is star 1-1. If you do have a question, to remove yourself from the queue, press star 1-1 again. One moment.

Speaker Change: <unk> do have a question to remove yourself from the queue Press star one again.

Sean: <unk>.

Sean McClain: Thank you, and I will turn it back to Sean McClain for a closing comment. Thank you for taking the time to join us on the conference call today, and we look forward to speaking with you in 2025.

Speaker Change: Thank you and I'll turn it back to Sean Maclean for closing comments.

Sean Maclean: Thank you for taking the time to join US on the conference call today, and we look forward to speaking with you in 2025.

Operator: Thank you all who participated in today's conference and you may now disconnect.

Sean Maclean: Thank you all who participated in today's conference and you may now disconnect.

Operator: Thanks for watching!

Sean Maclean: Okay.

Sean Maclean: [music].

Sean Maclean: Okay.

Sean Maclean: Okay.

Sean Maclean: [music].