Excelerate Energy, Inc.

Hello, everyone. My name is Drew and I'll be your conference operator today. At this time, I would like to welcome everyone to the Accelerate Energy fourth quarter and full year 2023 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. If you change your mind and want to withdraw your question, please press star followed by two. I will now turn the call over to Craig Hicks, Vice President, Investor Relations. You may begin your conference.

Good morning, everyone. Thank you for joining Accelerate Energy's fourth quarter and full year 2023 earnings call. Participating on the call today are Stephen Kobos, President and Chief Executive Officer, and Dana Armstrong, Executive Vice President and Chief Financial Officer. Also joining the call today is Oliver Simpson, Executive Vice President, and Chief Commercial Officer. Our fourth quarter and full year 2023 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 provide 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 Kobos.

Thanks, Craig. Hey, and thank you all for joining us on this call this morning. I look forward to our time together. In recent months, I've had conversations with many of you on this call, our analysts, our investors, people around the world who believe in Accelerate's unique potential, as well as some folks who are just new to the Accelerate story. I'd say there's a common thread in what we've heard from those discussions. That is, there's some questions about our plans to deploy capital to promote growth, the steps we intend to take to drive near-term value creation, and I'd say most importantly, the alignment of our capital allocation plans with our business strategy. I'd like to take our time this morning to address with all of you those questions and provide additional insight into our near-term strategy. Look, the most important thing you'll hear me say today is that in 24, Xcelerate Energy is moving from strategy to action. Let's get started by talking about who we are as a company and how we plan to grow the business through our corporate strategy. I need to emphasize three things. the strength of our FSRU and terminals business, our expected near-term growth catalyst, and finally, our capital allocation strategy. Accelerate Energy is committed to providing cleaner, more affordable, and more reliable energy by delivering LNG and natural gas to hundreds of millions of people around the world. It's not an exaggeration. It's who's out there depending upon Accelerate Energy for energy security or simply helping them maintain their quality of life. How do we do that? Well, we do it as a leading provider of flexible LNG infrastructure and integrated solutions. We are a trusted partner for sovereign governments and major LNG producers around the world. LNG comes up in discussions on two main subjects, by providing energy security in the face of disorder around the world and as a critical tool in decarbonization. It's more than two years since the start of the war in Ukraine, and it seems like we have faced an endless series of geopolitical crises since then. The need for energy security in a world of increasing or persistent disorder has never been more clear. Accelerate's infrastructure and the essential services we provide have likewise never been more valuable. We expect this to continue for decades to come. and for Accelerate to remain a critical provider of energy security and an ally for decarbonization. We're going to continue this legacy of strengthening energy security for customers across our global footprint. As we turn to 24, our focus as an organization is on optimizing our business to provide superior returns to our shareholders. This includes taking several strategic actions to drive near-term value creation. I would summarize our near-term strategy and divide it into three pillars. The first pillar is investing in our core business portfolio of FSRUs and terminals. These generate recurring positive cash flows and they provide financial flexibility for Accelerate to execute our growth plans. We believe investing in our existing asset portfolio will help ensure that our core business continues to operate at high levels of reliability and contributes to earnings. The second is comprised of executing on near-term growth catalysts. These near-term growth catalysts include investments in downstream natural gas infrastructure, execution of long-term LNG sales and purchase agreements, and evaluation of potential equity investments in the LNG import terminals. The third pillar is maximizing value for shareholders through our capital allocation strategy. We're implementing a $50 million share repurchase program commencing this quarter, and we will continue to return capital to shareholders through our regular quarterly dividend. We are committed to all of you to being transparent, and we'll continue to communicate our capital allocation strategy clearly and regularly in the future. I'd like to take a few minutes to highlight some of these strengths of our core business. The cornerstone of our business model is our core regasification, FSRU, and terminal services business. This generates consistently positive cash flow and affords us financial flexibility. As of January 1st of this year, our existing FSRU fleet is fully contracted and it's poised to deliver 315 million to 335 million of adjusted EBITDA in 24. Revenue from this business grew approximately 14% year over year in 23 as compared to 22. Our FSRU contract portfolio of over 4.2 billion of future contracted cash flows has a weighted average remaining term of seven years. We strengthened this portfolio in 23 by adding more than 15 years of contract length. And over the last two years, 40% of our FSRU fleet has been recontracted at higher day rates that are reflective of the increased market value of the asset class. We also plan to grow our fleet through an asset growth plan that includes selective acquisitions and construction of new vessels. Our state-of-the-art new build FSRU with Hyundai Heavy Industries is advancing according to schedule, and we look forward to welcoming the vessel to our fleet in June of 26. I'd like to touch on the safety of our operations, which includes over 700 highly skilled seafarers operating our offshore assets. They are of utmost importance to us. In 23, we achieved a company safety milestone, which I've got to highlight. We had zero injuries that resulted in lost time away from work. We remain dedicated to fostering a robust safety culture And we take pride in the steps we have taken to strengthen our core business in this area. In short, we've got a great base business. With that said, we believe that our current market valuation does not reflect the fundamental earnings power of the company. Accelerate shares are trading at a price that is substantially below the company's value. We absolutely believe that our shares should be valued at a much higher level given the fair market value of our assets. We're somewhere in the neighborhood of 47 percent below the fair market appraised value of our fleet, the high quality of our long-term fixed fee FSRE contracts, and our near-term capacity for growth. Right now we're trading below our book value of 1671. This makes no sense. This is why we believe that implementing a share repurchase program at this time is the right thing to do. The 50 million share repurchase program will commence this quarter and has been approved for a two-year tenure. Now let's turn to our near-term growth catalyst. As we mentioned in our third quarter call, the sustained tightness of the FSRU market is going to create further opportunities for Accelerate to connect LNG to downstream customers. And look, we are well-positioned to take advantage of this market tightness. To optimize our market position, we've defined a comprehensive organic and inorganic growth roadmap with three key priority areas along the value chain on which we're focusing. First area of focus involves evaluating and acquiring equity ownership in LNG regasification terminals that are either existing or under construction. We are now in discussions with several potential partners worldwide that meet Accelerate's requirements for value creation as well as compliance, and we are driving to close deals that have the potential to add accretive returns as early as 25 for these transactions. Our second catalyst for growth is the execution of long-term sale and purchase agreements, or SPAs. We're establishing a diversified LNG portfolio to support our long-term SPAs. These contracts provide us with take or pay economic uplift, which will enhance returns on our infrastructure. And our third area for growth is focused on strategic investment downstream of natural gas infrastructure. We expect these investments to allow us to secure value-accretive offtake contracts for terminal positions while enhancing the overall value of our LNG supply and infrastructure offerings. Beyond the committed growth CapEx that we've disclosed as part of our 24 guidance, we have an actionable path to deploy significant growth capital through 26 in support of our growth program. We've shared with you before that securing long-term SPAs with our counterparties is an important part of our strategy. To support this goal, we've established a diversified LNG supply portfolio, including long-term supply agreements, to support our growth strategy. Over the last year, I want to highlight that we executed three notable SPAs. In February of last year, we signed a 20-year SPA to purchase 0.7 million tons per annum of LNG from Venture Global beginning in 27. This is going to meet the demand of our customers that have an appetite for Henry Hub volumes. In November, we signed a 15-year SPA to deliver up to a million tons per annum of LNG to Petro-Bangla beginning in early 26. These volumes are going to flow through our existing FSRUs in Bangladesh. And in January of this year, we signed a 15-year SPA to purchase up to 1 million tons of LNG per annum from Qatar Energy to be delivered on an ex-ship basis in Bangladesh beginning in early 26. I want to emphasize that the execution of the Petro-Bangla and Qatar Energy SPAs is value accretive to Accelerate. It highlights our ability to secure critical and affordable LNG volumes for customers, and we do this while enhancing returns on our existing infrastructure. With the Petro Bangla and Qatar Energy SPAs now in place, we've locked in 15 to 18 million of guaranteed adjusted EBITDA uplift for 15 years beginning in January of 26. We cannot express enough the significance of having Cutter Energy as a strategic partner. It speaks volumes about how our peers in the industry view Accelerate, and we look forward to unlocking further demand in the markets where we operate. I'll just quickly recap what we've talked about this morning. Accelerate is well positioned to deliver solid future earnings and cash flow growth We have a healthy balance sheet and a capital allocation strategy focused on investing in growth while returning capital to shareholders through our recently approved share repurchase program and quarterly dividend payments. With that, I'd like to turn the call over to Dana to walk through our full year and fourth quarter 23 results and our outlook for 24.