Earnings call transcript: Excelerate Energy beats Q4 2024 estimates, stock rises

Excelerate Energy Inc. (EE), a $2.98 billion market cap LNG infrastructure company, reported robust financial results for the fourth quarter of 2024, surpassing market expectations and driving a positive reaction in the stock market. The company posted an earnings per share (EPS) of $0.40, significantly above the forecasted $0.35. Revenue also exceeded projections, reaching $274.6 million compared to the expected $194.96 million. Following the announcement, Excelerate Energy’s stock rose by 3.57% in premarket trading, reflecting investor confidence in the company’s performance and future prospects. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value calculation, suggesting potential upside for investors.

Key Takeaways

• Excelerate Energy reported a strong EPS and revenue beat.
• Stock price increased by 3.57% in premarket trading.
• Record adjusted EBITDA of $348 million for 2024.
• High fleet reliability and successful LNG operations.
• Continued focus on strategic growth and fleet expansion.

Company Performance

Excelerate Energy demonstrated strong performance in Q4 2024, with significant year-over-year improvements in net income and EBITDA. The company achieved a record adjusted EBITDA of $348 million for the year, surpassing its guidance range. Net income for the quarter was $46 million, contributing to a total annual net income of $153 million, up 21% from the previous year. This growth underscores Excelerate Energy’s effective operational strategies and market positioning.

Financial Highlights

• Revenue: $274.6 million, significantly above forecast.
• Earnings per share: $0.40, a 14.3% beat over forecast.
• Net income: $153 million for 2024, up 21% YoY.
• Adjusted EBITDA: $348 million for 2024, above guidance.

Earnings vs. Forecast

Excelerate Energy reported an EPS of $0.40, exceeding the forecast of $0.35 by approximately 14.3%. The company also outperformed revenue expectations, with actual revenue of $274.6 million compared to the forecasted $194.96 million. This strong financial performance highlights the company’s effective execution and strategic initiatives.

Market Reaction

Following the earnings announcement, Excelerate Energy’s stock rose by 3.57% in premarket trading, reaching $29.02. This increase reflects positive investor sentiment, supported by the company’s strong financial results and operational achievements. The stock has demonstrated remarkable performance, delivering a 98.84% return over the past year and a 41.09% gain in the last six months. The stock’s performance remains robust within its 52-week range of $13.80 to $32.99, indicating sustained investor confidence. For detailed analysis of Excelerate Energy’s valuation and growth prospects, including exclusive Fair Value models and comprehensive financial health scores, visit InvestingPro.

Outlook & Guidance

Looking forward, Excelerate Energy has set an adjusted EBITDA guidance of $340-$360 million for 2025. The company plans to continue its focus on fleet expansion and strategic investments, with maintenance capital expenditures estimated at $60-$70 million and committed growth capital of $65-$75 million. These initiatives aim to strengthen Excelerate Energy’s market position and drive long-term growth.

Executive Commentary

"We are a global leader in FSRUs and downstream LNG infrastructure," stated CEO Steven Cobos, emphasizing the company’s competitive edge. CFO Dana Armstrong highlighted, "Over 90% of our 2025 revenue is from core business," reflecting a strong focus on sustaining core operations and revenue streams.

Risks and Challenges

• High total debt level, which may impact financial flexibility.
• Potential market saturation in the LNG sector.
• Macroeconomic pressures and geopolitical uncertainties.
• Supply chain disruptions that could affect operations.
• Regulatory changes impacting the energy industry.

Q&A

During the earnings call, analysts inquired about potential LNG carrier acquisitions and FSRU deployments. The company is exploring optimization opportunities and evaluating projects in Vietnam and Alaska, indicating ongoing strategic growth initiatives.

Full transcript - Excelerate Energy Inc (EE) Q4 2024:

Alex, Call Coordinator: Hello, and welcome to the Accelerate Energy Fourth Quarter and Full Year twenty twenty four Earnings conference call. My name is Alex. I’ll be coordinating the call today. I’ll now hand it over to your host, Craig Hicks, Vice President of Investor Relations and Strategy. Please go ahead.

Craig Hicks, Vice President of Investor Relations and Strategy, Accelerate Energy: Good morning, everyone. Welcome to Accelerate Energy’s fourth quarter and full year twenty twenty four earnings call. Participating on the call today are Steven Cobos, Chief Executive Officer and Dana Armstrong, Chief Financial Officer. Also joining the call today are Oliver Simpson, Chief Commercial Officer and David Leiner, Chief Operating Officer. Our fourth quarter and full year twenty twenty four earnings results, press release and presentation were released yesterday afternoon and can be found on our website at ir.accelerateenergy.com.

I would like to remind everyone that we will be making forward looking statements on this call that involve a number of risks and uncertainties. Our actual results may differ materially from those expressed in these forward looking statements, and we make no obligation to update or revise them. Today’s remarks will also refer to certain non GAAP financial measures. We have provided a reconciliation to the most directly comparable GAAP financial measures at the back of the presentation. With that, it is my pleasure to pass the call over to Stephen Kovos.

Steven Cobos, Chief Executive Officer, Accelerate Energy: Thank you, Craig. Good morning, everyone, and thank you for joining us today. Let me start by reiterating who we are as a company. Accelerate Energy enhances energy security by delivering critical LNG and natural gas to countries around the world. We are a global leader in FSRUs and downstream LNG infrastructure.

So what distinguishes us? It is our ability to generate sustainable earnings, our strong balance sheet and our disciplined approach to capital allocation. Bottom line, we believe that Accelerate Energy is a fantastic investment opportunity. On today’s call, I will share with you some notable highlights from 2024 and provide an update on our growth strategy. I’ll then hand the call over to Dana, who will walk through our strong 2024 financial results and guidance for 2025.

I’m proud to share that 2024 was an exceptional year for Accelerate. It was a year marked by financial success and significant operational achievements. For the full year 2024, Accelebrate Energy delivered record adjusted EBITDA of $348,000,000 above the high end of our guidance range. We also delivered net income of $153,000,000 which was up 21% year over year. This accomplishment reflects the robust nature of our take or pay business model and our ongoing commitment to maximizing value for our shareholders.

The earnings growth we have seen in recent years since our IPO can be largely attributed to the successful recontracting of FSRUs in our fleet at elevated market rates. Also, our ability to optimize around our core regasification business. We’ve been able to strengthen our financial position while maintaining minimal commodity exposure. This strategic approach has been instrumental in enhancing the strength of our earnings. The predictability of our earnings is directly correlated to the geostrategic nature of our assets.

This has allowed for continuous cash collections on all our major contracts since our first regasification contract began in 02/2008. On the operations front, our teams continue to make operational excellence a top priority. For the full year, we recorded reliability of 99.9% across our fleet. This is the highest reliability in the history of Accelerate technical management. It is an outstanding achievement by the Accelerate teams.

We also exceeded all of our primary safety targets, reaffirming our dedication to safe, sustainable operations. And in December 2024, we celebrated a major milestone when we completed our 3,000 LNG ship to ship cargo transfer since the start of STS operations in 02/2007. Let me just put that number in context. When you consider that the average LNG cargo holds about 3,300,000,000 cubic feet of natural gas, we’re talking well north of 9,000 cubic feet of natural gas. And listen, it’s not a one off number.

Last year, we delivered two seventy two cargoes of LNG to our customers. That means we regasified on average about 2,500,000,000 cubic feet of natural gas every single day. These impressive achievements are a testament to our unwavering commitment to safety, reliability and innovation in the LNG industry. I want to thank the Global Accelerate team, including our pool of about 700 seafarers who serve on our vessels for their hard work and dedication. Every quarter, I revisit our GRIF strategy.

And there’s a compelling reason why. It serves as our North Star, and it’s the cornerstone of every decision we make as a company. We remain focused on investing in our core regasification business while pursuing strategic initiatives that drive value creation. Expanding our fleet is an important part of our grid strategy. FSRUs are critical assets that are a cheap form of insurance for countries as they look to enhance their energy security as they seek to fill seasonal natural gas storage and as they balance their energy mix.

Given the current geoeconomic uncertainty in Europe and other markets around the world, the supplydemand balance for the asset class is expected to remain tight in the foreseeable future. The construction of our best in class newbuild FSRU remains on track with expected deliveries in 2026. Hull ’3 thousand ’4 hundred and ’7, which is being built by Hyundai Heavy Industries (KS:009540) in South Korea, will be capable of delivering 1,000,000,000 cubic feet per day of natural gas. That means Hull 3,407 is a high spec FSRU and its best in class performance and efficiency make it a standout candidate for any regasification opportunity. We are engaged in ongoing discussions with potential customers regarding the vessel’s deployment.

Next (LON:NXT) month, we will achieve Keelaying, a significant milestone for the project. This part of the process is the first step in placing the foundation for the vessel in drydock. Following this, the next milestone will occur in June when we launch or float the vessel for the first time ahead of our upcoming Centimeters gas trials. Last quarter, we discussed our plans to buy an LNG carrier, which will support our gas supply business in the short term and which will be a candidate for our first FSRU conversion. Since we were last together, our technical team has inspected a number of LNG carriers as part of this effort.

We are optimistic about our prospects and continue to engage in negotiations to acquire an LNG carrier in 2025. FSRU conversions are an attractive option for many customers due to the lower capital commitment required to convert the assets. They also have shorter timelines for construction and delivery when compared to new builds. Going forward, we see a balance of new builds and conversions as key to addressing diverse market needs. The flexibility provided by both options allows us to be strategic in our approach to fleet expansion and our overall growth.

While FSRUs are a core part of our business model, our strategic vision extends beyond being a pure play FSRU company. We aim to broaden our market presence through strategic investments in LNG import terminals and complementary downstream infrastructure. Owning, operating and having access to LNG import infrastructure provides us with greater visibility to future vessel deployments. This unlocks incremental opportunities for LNG and gas sales. We continue to evaluate a range of strategic investments that have the potential to help drive earnings growth in the near to midterm while supporting our efforts to scale our business.

We look forward to sharing updates as soon as they become available. I’m excited to help accelerate this position today. Our core business provides us with a foundation for financial strength, and we have a significant amount of capital available for deployment. Most importantly, we remain focused on investing only in projects that align with our strategic vision and deliver real value for you, our shareholders. Twenty twenty five is going to be a critical year for us, and we’re looking forward to the opportunities that will add.

With that, I’ll now turn the call over to Dana, who will walk through our outstanding twenty twenty four financial results and our guidance for 2025.

Dana Armstrong, Chief Financial Officer, Accelerate Energy: Thanks, Steven, and good morning. We are pleased with our exceptionally strong financial results for 2024. We delivered record adjusted EBITDA of $348,000,000 which was above the high end of our guidance range. As Steven stated, for the full year, our net income was $153,000,000 which is an increase of $26,000,000 or up 21% as compared to the prior year. Net income and adjusted EBITDA for the full year increased slightly over last year, primarily due to various charter rate increases and a full year of earnings on the FSRU Excelsior.

These increases were partially offset by the transition of the FSRU Sequoia from gas sales in Brazil to a ten year time charter party agreement effective in early twenty twenty four. In addition, net income increased due to lower depreciation expense driven by an update to our useful life assumption in the fourth quarter of twenty twenty three. For the fourth quarter of last year, we delivered $46,000,000 of net income and $92,000,000 of adjusted EBITDA, which were essentially flat to the third quarter. As of year end 2024, our total debt, including finance leases, was $696,000,000 and we had $538,000,000 of cash and cash equivalents on hand with $158,000,000 of net debt. Under our revolving credit facility, we had $23,000,000 of letters of credit issued and no outstanding borrowings.

As of December 31, we had roughly $327,000,000 of available capacity on our revolver. Our healthy balance sheet along with the liquidity from our $350,000,000 revolving credit facility provides us with significant flexibility to drive near term growth opportunities while also pursuing longer term initiatives that align with our strategic goals. Our capital allocation strategy remains focused on investing in growth opportunities, including fleet additions to support our strategic plans, while returning value to our shareholders through our quarterly dividends. As a reminder, we announced the $50,000,000 share repurchase program last year. During the fourth quarter, we purchased roughly 848,000 shares or just over $22,000,000 of our Class A common stock at a weighted average price of $26.5 per share.

As of the end of the fourth quarter, we have utilized all of the $50,000,000 that was previously authorized for this program. For the full year, we purchased approximately 2,500,000 shares at a weighted average price of $20.41 per share. On February 20, our Board of Directors approved a quarterly cash dividend equal to $0.06 per share or $0.24 per share on an annualized basis of Class A common stock. The dividend is payable on 03/27/2025, to Class A common shareholders of record as of the close of business on 03/12/2025. This quarter’s dividend is consistent with the dividend we announced last quarter.

Now let’s turn to our financial guidance for the year. For the full year 2025, we expected adjusted EBITDA to range between $340,000,000 to $360,000,000 This range reflects the underlying strength of our core business and our ability to capture LNG supply optimization opportunities. We are confident with this range for 2025. We expect maintenance CapEx spend for 2025 to range between $60,000,000 to $70,000,000 A portion of our maintenance CapEx is associated with planned dry docks for our FSRU’s Exemplar and Explore in the second half of this year. The Exemplar drydock is expected to occur in the third quarter, while the Explore drydock is expected to occur in the fourth quarter of this year.

The anticipated off hire time for these dry docks is estimated to range between forty to fifty days per vessel, inclusive of transit time and the off hire impact is built into our 2025 guidance range. Our maintenance CapEx range also includes additional spend for very special upgrades across the fleet. We are also providing guidance on committed growth which is defined as capital allocated and committed to specific investments for previously approved capital projects. For 2025, committed growth capital is expected to range between $65,000,000 to $75,000,000 dollars Included in this range are the next two milestone payments for our new build Hull 03/1100. The Keel laying milestone payment of $33,000,000 will occur in the first quarter, and the next milestone payment of $17,000,000 will become payable following the launch of the vessel in the second quarter.

The final payment for the newbuild is expected to be made on delivery of the vessel in mid-twenty twenty six. The committed capital guidance range also includes capital that is earmarked for the reliquefaction kit that we have on order with Wartsila along with other miscellaneous items. At this time, the capital associated with our expected LNG carrier purchase is not included in our committed capital guidance. We will include it in future guidance updates once we have selected a vessel and signed an agreement with the vessel owner. In closing, Accelerate Energy remains strong financially.

We are confident about the opportunities that lie ahead and remain steadfast in our commitment to delivering exceptional value to our shareholders. With that, we’ll open up the call for Q and A. Thank

Alex, Call Coordinator: you. Our first question for today comes from Jeremy Tonhee of JPMorgan. Your line is now open. Please go ahead.

Noah Katz, Analyst, JPMorgan: Hey, this is Noah Katz on for Jeremy. Thanks for the question. First, I wanted to touch on what is implied in the 2025 adjusted EBITDA guide. Looks like you spoke to the strength of the FSRU fleet and capturing LNG supply optimization opportunities. But looking at other growth opportunities outside of FSRUs, are you guys still focused on investing in additional assets for onshore regas efforts for near term 2025 earnings uplift?

And are any of these potential near term growth opportunities baked into the guide?

Dana Armstrong, Chief Financial Officer, Accelerate Energy: Noah, it’s Dana. Thanks for the question. So as you said, it’s the base business. It’s the FSRU fleet. O and G supply optimization is what makes up our EBITDA.

Other growth opportunities, as of right now, we have not built that into our guidance. We’re obviously still proceeding with those growth opportunities, but those are not in our guidance. As far as the vessel, I think you asked about other regas assets. That also is not in our guidance, in our CapEx guidance, but we are pursuing that. We’re talking to several vessel owners and we fully expect to be able to update that CapEx guidance once we have a commitment there.

Noah Katz, Analyst, JPMorgan: Sounds good. Thanks for that. And then as a follow-up, can you provide any further details on the LNG carrier you guys are looking to acquire this year, that would be a candidate for the FSRU conversion? Because how do the economics work there? And what potential markets are you guys interested in?

Oliver Simpson, Chief Commercial Officer, Accelerate Energy: Yes. Thanks, Noah. It’s Oliver here. We’ve as David mentioned, we’ve talked to multiple we’ve looked at multiple vessels on this and we’re assessing different options that would fit with our near term needs for some of the, some of the cargo optimization we have as well as working for the ultimate goal of converting this, for our FSRU project. So right now, we’re looking at a range of assets.

We’ve inspected a number of them, and we’re looking to proceed with some of those discussions and hope to be in position to do something over the course of the year.

Noah Katz, Analyst, JPMorgan: All right. I’ll leave it there. Thank you.

Alex, Call Coordinator: Thank you. Our next question comes from Chris Robertson of Deutsche Bank (ETR:DBKGn). Your line is now open. Please go ahead.

Chris Robertson, Analyst, Deutsche Bank: Thank you, operator, and thank you, team, for taking my questions. Dana, this is a question for you just regarding the financial outlook for 2025. How much of the maintenance CapEx is going to be expensed versus capitalized?

Dana Armstrong, Chief Financial Officer, Accelerate Energy: Hey, Chris. That $60,000,000 to $70,000,000 that’s all capitalized. So we did have some dry docks last year that were expensed. Those were the two in Bangladesh that’s done. Going forward, the other eight vessels, it’s essentially all capital.

So that’s $60,000,000 to $70,000,000 that we guided to you is all capital.

Chris Robertson, Analyst, Deutsche Bank: Okay, great. And then with regards to the final payment you mentioned in mid-twenty twenty six for the new build, can you remind us of what that final payment amount will be?

Dana Armstrong, Chief Financial Officer, Accelerate Energy: Yes, it’s roughly $200,000,000

Michael Scialla, Analyst, Stephens: Okay.

Chris Robertson, Analyst, Deutsche Bank: I guess, strategically looking at some of the landscape of opportunities out there, are you guys looking at the Dominican Republic at all? Maybe what’s going on there?

Steven Cobos, Chief Executive Officer, Accelerate Energy: Hi, Chris. This is Steven. I love your specificity. I don’t think we want to get into particular markets that we’re looking at. I mean, we do there’s certainly a lot in the Western Hemisphere that’s interesting.

We’ve never been shy about saying that one of our focus areas is The Americas. 1 of our focus areas will remain The Americas, but I don’t think it would be appropriate for us to tip our hat to a particular geography.

Chris Robertson, Analyst, Deutsche Bank: No problem. I understand. Well, thank you for taking my questions. I’ll turn it over.

Alex, Call Coordinator: Thank you. Our next question comes from Zack Banevarin of TPH. Your line is now open. Please go ahead.

Zack Banevarin, Analyst, TPH: Hey, Al. Thanks for taking my question. Maybe just to start on your guys’ global macro outlook. Obviously, with peace talks in Russia and Ukraine and everything going on internationally, have you guys seen a change in demand for your guys’ services In a lower price environment internationally, I think you guys might do potentially better based on demand from other countries, but just wanted to kind of high level update on the macro side there.

Steven Cobos, Chief Executive Officer, Accelerate Energy: Sure. Thanks, Zack. This is Steven. Obviously, a lot going on. I don’t think it would be appropriate for me to speak on peace negotiations with Russia, but I can speak to macro because we do follow it.

Certainly, we followed, the German elections of this past Sunday, which give you some good insight for Europe. As expected there, Chancellor will soon be Chancellor, Merits and the Christian Democrats came in on top. We expect them to form a coalition government. We look for the supply demand balance on the asset class as you say to remain tight because we believe the geoeconomic and geopolitical balance at the moment to require that. And I just offer a couple of brief points maybe to that.

First, you can just listen to the campaign speeches in Germany and Mertz was quite clear that he wants to add 50 gas fired power plants. So we know right off the bat that Germany and others understand they need to significantly increase the amount of gas that they are receiving and that their economy requires it and they need it as a balancer for renewables and they need it for energy security. So we think that’s important. Second thing I would note is that the FSRUs, the LNG imports infrastructure, it’s hard to overstate just how cheap that insurance is. And what I’ve mentioned there is I saw a couple weeks ago, Gascred Finland posted on their website.

We’ve known this, but back in January of twenty four when the Baltic connector pipeline was down, GasGrid said that in a windless cold snap that they calculated that had they not had our FSRU connected to their gas system, which was the only real source of nat gas at that time, they think they the economy would have suffered between 1,500,000,000.0 and €3,000,000,000 in a single week. So that just gives you some idea of how cheap this insurance is for Europe. And we look for them to maintain, this cheap insurance. We look to them to increase the amount of gas they take. We are somewhat unique as you alluded to in that, our focus is on providing that ability to flex the LNG.

So we do think having brought that to bear and online as quickly as they did, no one’s going to run away from it. So that’s just the short take on developments in Europe.

Zack Banevarin, Analyst, TPH: That makes sense. I appreciate that. And then maybe one more. Any updates around Vietnam and Alaska projects? I know in Q3, you guys kind of gave a little bit of an update.

Anything to touch on there?

Steven Cobos, Chief Executive Officer, Accelerate Energy: Yes. Zach, this is Stephen. I’ll lead off and then I’ll hand it over to Oliver to get into. I mean, what I’d say about Alaska is we appreciate the tailwinds from the Trump administration on American LNG. I mean, it is fantastic.

It’s good for every, American LNG company out there in the world. We’re grateful for that support. I will say though, there’s also an emphasis from this administration on supporting export projects in Alaska as well. That seems to be the focus at the moment. We do believe that there’s still a near term need to get gas into Alaska while that, while those exports ambitions are being constructed.

It’s going to take some time. We think we have a good solution and we’re happy to engage further as that develops. But right now, certainly the focus, the rhetoric is on the export side and I don’t want to fight that too much. But I’ll hand over to Oliver for further thoughts on Vietnam or Alaska.

Oliver Simpson, Chief Commercial Officer, Accelerate Energy: Yes. Thanks, Stephen, and thanks, Zach. Yes, so Alaska, I mean, I’m really just echoing what Stephen said. Obviously, there’s a focus now on the export project. I mean, we always put Congress into that possibility.

And I think our focus was on a near term import solution, stemming from some of the near term gas demand they have in the Cook Inlet. We think that might still be there. We’re ready with a solution and we’ll see how those discussions evolve. Looking at Vietnam, I think we sort of there was a couple of opportunities we mentioned last year. We’re continuing to work on those behind the scenes.

The fundamentals in the country, we’re very positive, very bullish on. I think there’s good momentum in country for continued LNG imports. And obviously, I think with this the new administration here that supports that. I think as a broader comment, what I’d make too across all projects is we’re extremely confident between the newbuild, between our conversion strategy, between our long term volumes. We’ve got some great tools in our toolkit to hit some of these projects that we see coming on the horizon.

So we’re pretty excited about the broad set of opportunities we see out there. And we look forward to coming back to you guys with more updates when we can on those.

Steven Cobos, Chief Executive Officer, Accelerate Energy: Awesome. Appreciate it. Thanks everyone.

Alex, Call Coordinator: Thank you. Our next question comes from Michael Scialla of Stephens. Your line is now open. Please go ahead.

Michael Scialla, Analyst, Stephens: Good morning, everybody. I wanted to ask on the stock repurchases, little surprised that you used up the previous authorization in the fourth quarter. Any plans to put a new authorization in place as you look at the stock now kind of pretty near where you were purchasing for the fourth quarter?

Steven Cobos, Chief Executive Officer, Accelerate Energy: Hey, Mike, it’s Steven. I’ll just start off with that. I mean, we’re very pleased with the program as Dana pointed out. I think the average purchase price across that was somewhere in the $20 and change range. So we think it was very effective.

Obviously, we think we are not getting an appropriate multiples still. We don’t feel like this is an appropriate valuation for this company. But that being said, we’ll do what we always have set up. We have quite a bit of liquidity. We are looking at best ways to deploy that and best capital allocation.

Our focus remains on growth and funding growth. Obviously, as we have good visibility to some future cash flows last year and some successes, the board did authorize that increase that we came to you with in November. And I would just say, we will continue to look at all the tools we have to return value to shareholders. So it will be our growth opportunities and other levers as most appropriate to us down the road.

Michael Scialla, Analyst, Stephens: Okay. And I was also a little surprised on the gas sales for the fourth quarter higher than anticipated. As you look forward, I guess, book anything you can say about your optimization during the fourth quarter and how that might look for 2025?

Dana Armstrong, Chief Financial Officer, Accelerate Energy: Yes. So for the fourth quarter, we had two L and D optimization deals that we closed in the fourth quarter. And so we were pleased with the margins on that. As you can see, it’s in that gas sales number. For 2025, we do have an assumption in there.

We obviously don’t release segment information, but I will say that for 2025, over 90% of that is the core based business. And then the bulk of the rest of it is our assumed LNG optimization, which includes the Atlantic Basin cargo. Also just to add for the fourth quarter, we had two with the two LNG optimization deals, but we also pulled forward some of the Atlantic Basin deal into the fourth quarter. I think we did half of cargo in the fourth quarter, the other half in the first quarter of this year, and then we’ll obviously continue with that Atlantic Basin business into 2025.

Michael Scialla, Analyst, Stephens: I appreciate that. Thank you.

Dana Armstrong, Chief Financial Officer, Accelerate Energy: Sure.

Alex, Call Coordinator: Thank you. Our next question comes from Theresa Chen of Barclays (LON:BARC). Your line is now open. Please go ahead.

Theresa Chen, Analyst, Barclays: Thank you. Stephen, I wanted to follow-up on your comment about the anticipated tightness in the supply and demand balance for FSRUs from here. So with that in mind as well as the compelling economics of having this flexible option for free gas, the point you made about cheap insurance, would you be able to provide more color on your commercial discussions as you look to contract the new build as well as the potential conversion? And what do you and Oliver think are the key hurdles at this point? And what do you think it will take to move things forward?

Steven Cobos, Chief Executive Officer, Accelerate Energy: Thanks, Theresa. No, I don’t can’t get into the specific discussions we are having. But I will say there are a lot of people who were for different reasons depending upon where they are in the world, want access and want access quickly. I will remind everybody that what distinguishes Accelerate from a lot of other LNG players is that we are focused on that downstream part of the value chain. So, the fact that there may be some softening anticipated in the actual commodity price we are largely indifferent to.

What we are seeing, let’s just use this summer as an example. We took one cold snap in Europe and now now most of the slots are occupied for the summer in an effort to refill storage in Europe. Which means that, you know, LNG is gonna be a little tighter for the global South this coming summer. This coming summer just because it got cold in Europe. So it’s just another reminder to the South that they’re doing exactly what they have been doing.

That is contracting for more long term supply. That’s good for all the liquefaction players and they’re moving towards providing the infrastructure that’s going to allow them to have that affordable long term supply. So I think the behavior in the European markets is reminding people that they need to focus on long term projects, long term contracts and we’re finding that we’re finding that to drive enthusiasm and discussion. Meaning LNG isn’t affordable for the South and there’s nothing like a few reminders that they shouldn’t just view it as an optimization play. So that’s helping.

There are different markets. Obviously, if you care about throughputs, if you care about throughput, you want as much throughput as possible. If you don’t care about throughput, you care about efficiency because you care about how much you’re boiling off every day if you’re not sending it into your system. So we mentioned, obviously, best in class eBill ticks both those boxes. It has some of the best efficiency in the world and it has some of the highest throughput in the world.

It’s good. There will be some other niche geographies that we’re talking to that need far far less send out and those will require a different mix of top side conversion attributes to match that. You know, smaller send out, maybe minimum send out compression to send oil off a shore, maybe relick. But the point being, and I think Oliver mentioned it, we feel like we have all the tools that we need at this point to get in front of everyone we need to around the world. And we think we’re well positioned for that.

Dana Armstrong, Chief Financial Officer, Accelerate Energy: Thank you.

Alex, Call Coordinator: Thank you. Our next question comes from Bobby Brooks of Northland Capital Markets. Your line is now open. Please go ahead.

Craig Hicks, Vice President of Investor Relations and Strategy, Accelerate Energy0: Hey, good morning guys. Thank you for taking my question. A lot of my questions already got asked, but I just so for the newbuild, you guys mentioned that you can deliver one Bcf a day through that. And I just wanted to get a sense of like how that is comparative to your current fleet. Maybe if you could just help remind us like what’s the range of throughput capacity on your current fleet?

Craig Hicks, Vice President of Investor Relations and Strategy, Accelerate Energy1: Hey, Bobby. David here. Sure. Good question. We in our fleet, we’ve got a range of regas capacities.

They’re generally from 500 up to one Bcf. So, it’s a our fleet is highly capable. A conversion would likely be at the bottom end of that range. And, yes, new builds, as Stephen said, are usually higher capacity and can do somewhere near a Bcf. But, yes, more specifically 500 to a Bcf.

Craig Hicks, Vice President of Investor Relations and Strategy, Accelerate Energy0: Okay, got it. And then on the LNG, your intentions to buy an LNG carrier for conversion, I was just curious on is it how you guys are approaching it? Are you trying to line up a carrier that would fit a specific customer’s needs? Or is it more so taking approach of let’s like build it and they will come? Is it trying to match demand with that?

Or are you more so just looking at what’s the best deal out there that we can go out and then market?

Oliver Simpson, Chief Commercial Officer, Accelerate Energy: Bobby, this is Oliver. I’ll take this one. But I think we mentioned, I think, in the previous call that with our Atlantic supply deal, we had a need for an LNG carrier for that. So I think we have a base need for an LNG carrier for some of our optimization opportunities. So that’s the first sort of that’s the first need we have for it.

From there, the idea is that with that asset, we would be able to look at doing some engineering, look at potentially ordering long lead items to reduce the time to market. I think that, that’s in general is something that we see the time to market is critical for our customers and our projects. So having a conversion candidate within the fleet would allow us to reduce that, allow us to and then tailor the solution to what the customer needs. But we’re not looking to specifically convert to a specific customer’s needs. We’ll bring the asset on and then assess what makes sense for us based on what we see out

Craig Hicks, Vice President of Investor Relations and Strategy, Accelerate Energy0: there. That’s terrific color. I appreciate that. And then just last one for me. The 99.9% fleet reliability was a record.

I was just curious on what the previous record was. I’m guessing it was still 99 something.

Craig Hicks, Vice President of Investor Relations and Strategy, Accelerate Energy1: Yes. Great question. I’m not sure we’re going to be able to hit 99.9% every single year. It was a remarkable achievement. But generally, we do achieve reliability in excess of 99%.

I appreciate the question because a whole lot of really hard work goes into those kind of numbers. I mean, it’s a tremendous effort from the ops team, from the engineering team, everybody to make sure we’ve got all the equipment available, spares. When something coughs up in the middle of the night and you can get back online in a matter of minutes or a few hours, that means the world to our customers who depend on us. So, it takes a lot of work to achieve that kind of performance. And we hope to continue that performance going forward.

Craig Hicks, Vice President of Investor Relations and Strategy, Accelerate Energy0: No doubt. Yes, it’s a powerful thing when everybody is rolling in the same direction and it definitely seems like that is the case for you guys. So congrats on the great results this year and I’ll return back to the queue.

Alex, Call Coordinator: Thank you. Thank you. Our next question comes from Craig Sher of Coe. Your line is now open. Please go ahead.

Craig Hicks, Vice President of Investor Relations and Strategy, Accelerate Energy2: Morning. Thanks for taking the questions. Couple more on the conversion candidate. First, fair to assume that an LNG carrier acquisition for that would be a modest cost, I mean, tens of millions of dollars, not 100 plus. And what’s your confidence on shipyard access for conversion?

Steven Cobos, Chief Executive Officer, Accelerate Energy: Hey, Craig, this is Steven. I would say, you know, just like so many people, we don’t like to take any options off the table. I mean and while, yes, we’re looking at number of steam candidates, we we are looking at, DFD to we’re looking at all kinds of propulsions, all kinds of containment. And you can view that we’ll view the cost benefit of that as we look at the utility of it as LNGC versus derisking some of the Power Gen execution on conversion etcetera. But I mean the first thing I would tell you is I have high confidence in David and our engineering team to come up with good options on that, but we’re not going to take anything off the table.

I don’t think that’d be prudent at this stage. What was this? Capacitive shipyards. We are comfortable that we will be able to execute what we need to. Absolutely.

Craig Hicks, Vice President of Investor Relations and Strategy, Accelerate Energy2: Sounds good. And this quarter it’s already been alluded to. There’s been some questions about Vietnam and Alaska. But this quarter was sounds like it’s been a little more vague versus the prior three quarters with more prospective growth specific growth project opportunities in the deck. Understand that discussions are ongoing.

It’s kind of a fluid environment. You don’t want to front run opportunities. But you’ve had a lot of simmering opportunities for a couple of years now and building. Would it be unreasonable for someone to think at least one maybe two chunky opportunities could cross the finish line before year end?

Steven Cobos, Chief Executive Officer, Accelerate Energy: This is Stephen. I’ll take that one to Craig. Yes, I think in my script I mentioned that we are pursuing things that we do think can drive short and intermediate term. But as you well know and as Dana says, we don’t have that in guidance simply because it’s binary. It either makes or does not make.

But certainly, we are pursuing that. We are paddling hard beneath the surface. And I can’t really do more than tell you, you guys are going to be the first to know.

Craig Hicks, Vice President of Investor Relations and Strategy, Accelerate Energy2: Great. Thank you.

Alex, Call Coordinator: Thank you. At this time, we currently have no further questions. So I’ll hand back to the management team for any further remarks.

Steven Cobos, Chief Executive Officer, Accelerate Energy: Sure. This is Steven. Again, I want to thank everyone on the call for joining us today. We all here really appreciate the conversation. We remain steadfast in our commitment to connecting global LNG supply to markets around the world while providing value to our shareholders.

It’s a big job and one that all of us absolutely believe in. We’re excited about the growth opportunities ahead of us in 2025 and beyond. And with that, thank you very much.

Alex, Call Coordinator: Thank you all for joining today. You may now disconnect your lines.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.