Montauk Renewables, Inc.

Good afternoon, everyone, and thank you for participating in today's conference call. I would like to turn the call over to Mr. John Cerulli, 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.

Thank you, and good afternoon, everyone. Welcome to Montauk Renewables Earnings Conference Call to review the second quarter 2024 financial and operating results and developments. I'm John Cerulli, Chief Legal Officer and Secretary at Montauk. Joining me today are Sean McClain, Montauk's President and Chief Executive Officer, to discuss business developments, and Kevin Van Asselen, Chief Financial Officer, to discuss our second 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 Renewable's 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 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. 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 second quarter 2024 earnings press release in Form 10-Q issued and filed this afternoon, which are available on our website at ir.montaukrenewables.com. After our remarks, we will open the call to questions. We ask that you please keep to one question to accommodate as many questions as possible. And with that, I will turn the call over to Sean.

Thank you, John. Good day, everyone, and thank you for joining our call. I'll begin with updates regarding our ongoing development project. As previously announced, we commissioned our digestion capacity increase at our PICO facility during the first quarter of 2024. Through the second quarter of 2024, our PICO facility has produced approximately 39% more MMBTU over 2023 as a result of this capacity expansion. While LCFS credit pricing remains at low levels pending the ongoing rulemaking by the California Air Resource Board, we believe our facility is well positioned to benefit should future credit prices rise. Also, as previously discussed, we continue to expect the dairy host to deliver the third and final tranche of increased feedstock during 2025. During the second quarter of 2024, we commissioned our first reactor for our swine waste to energy development project in North Carolina. We expect to operate this and additional reactors in 2025 once the electric utility interconnection is complete. In the interim, this first reactor will be operated to provide for various data collection and testing activities, test and refine feedstock conveyance, product gas composition, and material composition related to the micronutrient organic fertilizer solid fractionation. Also during the second quarter of 2024, we continued the process related to both the outbound electric utility interconnection and related power purchase agreements, These processes are interrelated and we expect to successfully complete any interconnection construction activities to support our project timeline. During the second quarter of 2024, we have installed the majority of the required feedstock collection process equipment on two of the farms with which we have feedstock agreements. We continue to thoughtfully bring additional farms under agreement, targeting approximately up to 200,000 hog spaces to support our REC agreement with Duke. In August 2024, we received approval from the North Carolina Utilities Commission of our amendment to the new renewable energy facility designation of our project received late in 2023 that provides for the generation of RECs. This approval is a critical path item in the timing of the utility infrastructure design and other balance of plant componentry of our Turkey, North Carolina facility. Development continues with our second APEX RNG facility, our Blue Granite RNG project, our Bowerman RNG project, and our European Energy CO2 projects. We continue to manage through the required utility interconnection upgrades for the Blue Granite RNG project and do not anticipate meaningful additional capital expenditures for the remainder of 2024. As previously discussed, A catalyst for the second APEX RNG facility includes 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. Upon commissioning of the second APEX RNG facility, we expect there to be a period of excess processing capacity it is subject to the rate at which the gas feedstock availability increases from landfill activities. 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 our operating profits. We made a strategic decision to not transfer all available D3 RINs generated and available for transfer during the second quarter of 2024. As a result, we had approximately 4.7 million RINs in inventory from 2024 second quarter RNG production. We have since entered into commitments and have fully transferred all of these RINs during the third quarter of 2024 at an average realized price of $3.32, measurably higher than the average D3 index price for the second quarter of 2024 of $3.20. We have also since entered into commitments to transfer approximately 44.1% of our third quarter RNG production with an average realized RIN price of approximately $3.33. As part of our normal monetization activities, the company routinely queries the market for updates to potential uptake structures. Where we self-monetize the majority of our attributes under EPA-registered pathway sharing agreements, those agreements upon expiration are subject to changes in sharing percentages and other conditions that are negotiated during renewal. Though we have not yet experienced a significant increase to pathway attribute sharing arrangements, We may look to place more of our RNG volumes under fixed price contracts should contractual sharing percentages continue to increase. We are aware that the EPA expects to target March 2025 to propose renewable fuel standard obligations for 2026. The 2025 compliance year already has its renewable volume obligations set at 1.3 billion D3 rents. Prior to the EPA setting volume obligations for the 2023 through 2025 compliance years, the EPA set RBO obligations annually. Given our history and industry experience, we believe that we are positioned to navigate any uncertainty with RBO rulemaking. And with that, I will turn the call over to Kevin.