Montauk Renewables, Inc.

Good day, everyone, and thank you for participating in today's conference call. I would like to turn the call over to 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 day, everyone. Welcome to Montauk Renewable's earnings conference call to review the second quarter 2025 financial and operating results and developments. I'm John Ciroli, Chief Legal Officer and Secretary at Montauk. Joining me today are Sean McClain, Montauk's President and Chief Executive Officer to discuss business development, and Kevin Van Aslen, Chief Financial Officer to discuss our second quarter 2025 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 measures assist investors and 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 2025 earnings press release in form 10Q issued and filed on August 6th, 2025. These are available on our website at ir.montaukrenewables.com. After our remarks, we will open the call to analyst questions. We ask that you please keep to one question to accommodate as many questions as possible. With that, I will turn the call over to Sean.

Thank you, John. Good day, everyone, and thank you for joining our call. On June 13th, 2025, the EPA released the partial waiver of the 2024 cellulosic biofuel volume requirement, the RFS standards for 2026 and 2027, the partial waiver of the 2025 cellulosic biofuel volume requirement, and other changes in their proposed rule. The final 2024 cellulosic biofuel volume requirement was reduced from 1,090,000,000 to 1,010,000,000 D3 RINs. This reduction was based on actual volumes of D3 RINs generated in 2024. In addition, the EPA is making cellulosic waiver credits available for 2024 as an additional compliance flexibility measure for obligated parties. This final rule has limited direct impact to Montauk as we have sold all of our 2024 RINs. For 2025, the EPA has proposed cellulosic biofuel volumes for 2025 to be reduced from 1,376,000,000 to 1,190,000,000 RENs and to make cellulosic waiver credits available for 2025. These proposals, coupled with the EPA's biogas regulatory reform rule of matching the production of RNG with the dispensing of RNG to transportation, appear to have limited the pricing level at which the D3 RIN currently trades. The proposed cellulosic biofuel volume requirements for 2026 and 2027 are 1,300,000,000 and 1,360,000,000 D3 RINs, respectively. In justification of these lower than expected volumes and the suggestion that small refinery exemptions be potentially revisited, the EPA has expressed their view that cellulosic RIN generation from biogas CNG LNG during 2026 to 2030 will be constrained by the total usage capacity of CNG LNG as transportation fuel. In the first quarter of 2025, we entered into an agreement with Pioneer Renewables Energy Marketing to form a joint venture, Green Wave Energy Partners. The primary goal of the joint venture is to help address this limited capacity of RNG utilization for transportation by offering third-party RNG volume producers access to exclusive, unique, and proprietary transportation pathways. We expect to be the RIN separator for the joint venture and expect to receive separated RINs as our distributions. While we have yet to realize material benefits from the joint venture through the second quarter, We have begun successfully contracting, dispensing, and separating RINs through these proprietary transportation pathways. We continue our development efforts in North Carolina with an expectation to commence production and revenue generation activities in early 2026. As previously noted, the favorable change in SWINE renewable energy credit generation legislation enacted by the state of North Carolina in 2024, has us engaged on various stages of negotiations with obligated utilities to provide RECs from our expected 2026 production. We have executed a power purchase agreement for the expected power to be produced from the first phase of electric production. The term of this PPA begins once we commission the facility and covers 100% of the electricity produced for 10 years. The PPA price is based on set tariffs and considers various impacts, including, but not limited to, demand, season, and time of day, and we believe the average price considering these factors of $48 per megawatt hour is in line with various southeastern United States power markets ranging from 40 to 60 megawatt hours. This favorable change in swine renewable energy credit generation legislation has compelled us to refine development efforts in North Carolina to focus on feedstock exclusively from swine waste, no longer inclusive of an agricultural component. Additionally, we've refined our production focus for this first phase to be exclusively electricity generation. Correspondingly, we continue to optimize the collection and transportation of swine feedstock from the collection farms to the centralized processing location, including the removal of low-energy content liquid waste. Such efforts include the pelletization of collected waste and the incorporation of additional upstream processes using screw press and centrifuge technologies. Our feedstock collection and transportation optimization efforts are expected to have an impact on both the number of farm service as well as the associated equipment and operating costs. Given the opportunity set afforded by the change in legislation and our refined focus on both the feedstock optimization and increased electricity generation, we are increasing the range of capital investment expected for this first phase to $180 million to $220 million. The revised estimate of the total project to the extent impacting 2025 is included in our 2025 development capital expenditures range. We have successfully completed the construction and commissioning of a second RNG processing facility at the Apex landfill. As previously noted, the construction of the second facility was triggered by the landfill host projections of biogas feedstock volumes in excess of the original facility's production capacity. driven by the landfill host's waste intake projections. The second facility provides us with an additional 2,100 MMVTU per day of production capacity. We continue to expect a period of excess production capacity as the landfill host continues to increase their waste intake. In 2024, we signed a contract for the annual delivery of 140,000 tons per year of biogenic carbon dioxide. We intend to capture, clean, and liquefy CO2 at select Texas facilities, at which point EE North America will transport it to a Texas-based e-methanol facility. The delivery term is expected to last 15 years, with the first delivery expected to begin in late 2027. During the period prior to commissioning, we have been recognizing an exclusivity fee related to the minimum tons of CO2. The annual price per ton under the contract is adjusted by the U.S. Consumer Price Index. The agreement with EENA also includes a 50% sharing of any available tax attributes generated by us under Code Section 45Q, Carbon Dioxide Sequestration Credit, in the Inflation Reduction Act as applicable. There are other revenue sharing components under the agreement to the extent we're able to produce CO2 prior to EENA accepting delivery. excluding any estimate of tax attributes and including a U.S. consumer price index range of 2.5% to 3% annually, we estimate the total revenues under this 15-year term to provide an annual minimum of 140,000 tons of CO2 will range between $170 million to $201 million in total. We have completed the initial site surveys related to the location of the CO2 processing equipment, have evaluated equipment suppliers, and started engineering design. We continued to target a commissioning start in 2027 and began incurring capital expenditures for long lead items and design engineering in the second quarter of 2025. Also in 2024, we announced a collaboration with Embolon to transform methane emissions from waste stream biogas into high-value carbon-negative fuel. Leveraging Embolon's patented technology, the initial pilot was a small-scale demonstration of recovering and converting biogas into green methanol. The initial pilot project at our Atascocita facility in Houston, Texas, exceeded its anticipated results. Following a successful field demonstration project, together with Embolon, we plan to deploy a portfolio of biogas sites with an aggregate annual production capacity of up to 50,000 metric tons of green methanol by 2030. We do not expect short-term financial benefits from this joint development venture, nor a disruption to our operations. And with that, I will turn the call over to Kevin.