Q1 2025 NET Power Inc Earnings Call
Reno, Criminal Professional agency Office Word http://offices.microsoft.com.caly/.
It is now my pleasure to introduce your host Bryce Mendez director of Investor Relations. Thank you you may begin.
Speaker Change: Thank you.
Speaker Change: Morning, and welcome to net Power's first quarter 2025 earnings conference call.
Speaker Change: With me on the call today, we have our Chief Executive Officer, Danny Rice, our Chief operating Officer Mark Horseman.
Speaker Change: Yesterday, we issued our earnings release for the first quarter of 2025.
Speaker Change: Found on our Investor Relations website at IR Dot power Dot com.
Speaker Change: During this call. Our remarks may include forward looking statements.
Speaker Change: Actual results may differ materially from those stated or implied by forward looking statements due to risks and uncertainties associated with our business.
Speaker Change: These risks and uncertainties are discussed in our SEC filings.
Speaker Change: Please note that we assume no obligation to update any forward looking statements with that I'll now pass it over to Dani Reiss, not Power's Chief Executive Officer.
Dani Reiss: Thanks, Bryce good morning, everyone. Thanks for joining that powers first quarter earnings call I'm pleased to share an update on our progress to deliver clean reliable power with our proprietary net power cycle before diving into our updates I'd like to welcome Mark Horstmann, our new Chief operating officer, who recently stepped into this role Mark brings.
Over 20 years of experience in the power sector and its expertise in product development and operational execution, it's already proving invaluable as we sharpen our focus on cost optimization.
Dani Reiss: Actual success.
Dani Reiss: As we outlined on our last call. We've established a few focus areas for 2025 first we're working to improve the project economics for our first utility scale plant, mainly by reducing the total installed cost second we are working to determine a viable commercial pathway to a highly competitive competitive slept less cost of energy or <unk>.
Dani Reiss: Oh for sure it mainly through a combination of realizing improvements in cycle thermal efficiencies and reductions in per unit capital costs, we expect to realize fairly meaningful cost reductions with multi unit deployments, particularly in locations with coastal access and this year, we're working to quantify these savings with greater accuracy.
Dani Reiss: And our third focus area is moving the ball down the field with our la Porte testing, which will meaningfully improve our performance expectations for commercial scale clean power plants were in a unique position, where we possess the capital needed to achieve these three goals in a very cost effective manner, we have no debt and we exited the first quarter with approximately $500 million of.
Dani Reiss: Cash and cash equivalents, earning roughly 5% interest per year.
Dani Reiss: For the full year, we're budgeting to spend approximately $190 million net of interest income comprised of 45 million for G&A 50 million fill appointing our the R&D activities to further prove out the technology.
Dani Reiss: 100 millions per S N, one development and Baker turbine development for commercial deployment.
We expect to exit 2025, with two stages of La Porte testing completed a more competitive cost estimate for S. N. One.
Dani Reiss: Or more appropriate pathway to get to a competitive long term L. C O E and nearly $350 million with cash on hand.
Before turning to the operational updates I want to briefly address our share price and capital allocation strategy net Paris current trading prices near our cash value.
Dani Reiss: Implying the market is tiny little value to our technology.
Dani Reiss: This stands in Stark contrast to other clean power technology companies, many of whom have less liquidity longer commercialization timelines lower technology readiness levels and higher L series, Yeah trading.
Dani Reiss: Trading at valuations in the billions. This discrepancy really underscores the significant dislocation in how the market values are clean firm power solution and gas solutions more broadly versus these others.
Dani Reiss: There's such a large cost gap between most clean from power solutions and natural gas just last week, Canada announced 1.2 Gigawatts of new nukes costing over 15 billion U S dollars, which is nearly six times the cost of new gas based power and it really begs the question can net powered gas costs lower than new nuclear.
Dani Reiss: Our first plant, Patrick Permian, which is very likely to be the most expensive and least efficient and when we ever deploy we expect it to be much lower cost than the aforementioned nuclear peds data.
Dani Reiss: Data points like this continue to reaffirm our original thesis, which is that in regions with access to low cost natural gas and places to safely store. The C. O two the lowest cost way to deliver clean reliable power can and should come from natural gas based solutions.
Dani Reiss: And load growth should go to those markets that can generate the lowest cost and most reliable power.
Dani Reiss: So we're constantly assessing ways to best unlock the potential of our unique technology.
Dani Reiss: Commitment, we owe to our shareholders, including our major strategic investors Oxy constellation Baker Hughes SK group in the rice family, but collectively own approximately 85% of our company's equity our investment decisions are made with this focus in mind and I believe our 25 25 investments represent the best use of our capital.
Dani Reiss: Could you just start.
Dani Reiss: So with that I'll now turn the call over to Mark to walk through our focus areas for this year.
Mark: Thank you Danny and good morning, everyone. It's an honor to step into this role at such an important time I'm excited to be a part of this earnings call.
Mark: He spent over two decades in the power sector I've seen firsthand the challenges of balancing reliability affordability and sustainability that powers technology is a game changer and I'm energized by the opportunity to help bring it to the market at scale My focus as CFO is to drive operational excellence and accelerate our path to cost competitive clean energy.
Speaker Change: As Danny mentioned, we are a few key focus areas for the remainder of the year first it's progressing through the turbo expander validation program with Baker Hughes at the Port.
Speaker Change: We're currently performing some maintenance work at the site, but once we resume testing we expect to complete the first two phases. This year as well as beginning preparations for phase three and four testing in 2026 and 2027.
Speaker Change: Second for project Permian, we're deep into the value engineering process. This is Bo scrutinizing every aspect of the plants design from equipment specifications to construction methods to identify cost savings without compromising performance or safety.
Speaker Change: These efforts are critical to making S. N. One a success and informing our standardize designed for future plants, we're continuing to wrap up engineering work with Zachry and our key partners to arrive any more definitive cost estimate at the end of this year.
Speaker Change: In addition, we are advancing our turbo expander design and development activities with Baker Hughes for US anymore. It's worth mentioning that the Baker Hughes Turbo expanded will be location agnostic and can be utilized in any net power plant in the Permian or somewhere else. So while the status of Permian assessing one is currently contingent upon our value engineering efforts.
Speaker Change: We're comfortably moving ahead with utility scale terminal expanded development because of the equipments flexibility to perform anyway.
Speaker Change: And third we're continuing to move forward with our feasibility study for a standardized modular multi unit plan working to arrive at a scalable configuration of potentially two to four powertrains on the Gulf coast or any coastal site for that matter. This is a pivotal costs down exercise to validate the economic viability of future.
Speaker Change: Our projects and we will ensure that future deployments aligned with market demands for cost effective clean energy solutions.
Speaker Change: Since we're early into the cost down initiatives for project Permian and feasibility study for the multi unit coastal configuration theres not much.
Speaker Change: There's not much to share today, but hope to have any key learnings we can share on next quarter's call.
Speaker Change: I'm excited to lead our operations as we move closer to commercializing our transformative technology and look forward to updating you on our continued progress I will now turn the call over to Danny for closing remarks.
Danny Rice: Thanks for the update Mark we're energized by the progress, we're making and remain committed to executing our strategy with discipline and focus. The next few months will be important as we continue to drive costs out of our first in future projects, thereby improving economics and project funded bit Fungibility and what continues to be a growing market to clean from power solutions, we have.
Danny Rice: Work to do to unlock this pathway for us, but we have the capital to do it we're constantly challenging ourselves, but continue to believe the investment in and the development of our clean gas technology creates the best risk adjusted return profile for our shareholders. We appreciate your continued support and look forward to sharing more updates on our next call have a nice day.
Speaker Change: Thank you and ladies and gentlemen. This does concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation and have a great day.
Danny Rice: [music].
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Danny Rice: Uh-huh.
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Danny Rice: Right.
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Danny Rice: Mhm.
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