Excelerate Energy, Inc.

Hello and welcome to the Accelerate Energy third quarter 2024 earnings conference call. My name is Alex and I'll be coordinating the call today. If you'd like to ask a question once the presentation has finished, please press star followed by one on your telephone keypad. And I'll hand it over to your host, Craig Hicks, Vice President, Investor Relations. Please go ahead.

Welcome to Accelerate Energy's third quarter 2024 earnings call. Participating on the call today are Stephen Kobos, Chief Executive Officer, and Dana Armstrong, Chief Financial Officer. Also joining the call today are Oliver Simpson, Chief Commercial Officer, and David Liner, Chief Operating Officer. Our third quarter 2024 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 Kobos. Thank you, Craig.

And to all of you on the call, good morning. I know that many of you are familiar with the Accelerate value proposition, but for those of you who are new to our story, I want to start today's call by simply stating who we are as a company. At Accelerate Energy, we are committed to being the global leader in FSRUs and downstream LNG infrastructure. Our aim is to leverage our unrivaled experience and help customers across the globe unlock access to abundant LNG supply. Q3 was a fantastic quarter for us. I am proud that we delivered another strong quarter of solid financial and operational performance. This resulted in adjusted EBITDA of $92 million. Our ability to deliver consistent results and generate strong cash flow is driven by the high quality of our core REGAS business. This business is underpinned by a contract portfolio that has about $4 billion in future revenue with a weighted remaining term of seven years. This is a real foundation. Our FSRU and terminals business gives us ample flexibility to invest in growth over the near, mid, and long term. It's also why we are confident in our decision to more than double our quarterly dividend to six cents per share. Dana is going to speak more to the dividend increase during her remarks. I want to take this opportunity to thank each and every member of the Global Accelerate team. They work hard to ensure the energy needs of our customers are met every day. Quite frankly, that's why we obsess about operational excellence. We had a stellar quarter operationally with reliability in excess of 99.8% and zero recordable safety incidents. These are impressive statistics considering our pool of over 700 seafarers who serve on our vessels. During the quarter, the crew of the FSRU Excellence achieved a new milestone. They safely performed their 250th ship-to-ship LNG cargo transfer at our MLNG terminal in Bangladesh. More than 50 of those transfers occurred this year. What an amazing accomplishment for the team. On this morning's call, you are going to hear three themes. Accelerate Energy is driving near and midterm value creation. We are generating sustainable earnings. And we are executing a disciplined capital allocation plan. Now let's talk more about our strategy, which is our North Star. Over the last few quarters, we have focused on the steps we are taking to optimize our core regasification business and the strategic catalysts we are advancing to maximize value for our shareholders. Today, I want to spend some time discussing our strategy for growing our fleet and how we are leveraging our LNG supply portfolio to support our growth projects and enhance our infrastructure returns. I've said it before and I'll say it again, our FSRU and terminals business cornerstone of our company. Rowing our fleet responsibly as opportunities present themselves is an important part of our plan to increase our presence in both new and existing markets around the world. We've talked previously about Hull 3407. This is our new build FSRU that is being constructed by Hyundai Heavy Industries in South Korea. Hull 3407 It's going to be best in class and capable of delivering 1 billion cubic feet per day of natural gas. This makes it well-suited for deployment in markets with a need for high send-out. In October, I'm pleased to report that we reached the steel cutting milestone for the FSRU. The next milestone, keel laying, will occur in March of 25. 3407 remains on track for expected delivery in June 26. When you look at our fleet, it's obvious that we likely build FSRUs. At the same time, we also recognize that the projects in our pipeline have a wide range of needs. Several of these projects would require a smaller send-out vessel, making them ideal for FSRU conversions. Our team is currently evaluating LNG carrier candidates and is analyzing cost efficient conversion options for integrated terminal projects. We are eyeing an LNG carrier acquisition in 2025. In the near term, we're going to need an LNG carrier to support future deliveries of LNG volumes in our portfolio. So to help you understand how this all fits together, let's dive into our molecule strategy. Accelerate's LNG supply strategy complements our core regasification business, and then it enhances returns on our existing infrastructure investments. We utilize our global presence and market knowledge to develop LNG demand and provide tailored LNG delivery solutions to our customers. Additionally, we're establishing a diversified supply portfolio to support our LNG sale and purchase agreements. We now have several tangible proof points of this strategy at work. As you know, through our market position in Bangladesh, we signed a 15-year deal to sell LNG to Petro-Bangladesh beginning in 2026. We increased the capacity of one of our FSREs in Bangladesh to accomplish this. We subsequently sourced up to 1 million tons per annum of supply for the deal from Qatar Energy. The deal is expected to generate approximately 15 to 18 million of EBITDA annually. In our portfolio, we also have venture global FOB volumes. Under the agreement, Xcelerate will purchase 0.7 million tons per annum of LNG for venture global for 20 years starting in 2027. This equates to roughly 10 cargoes per year. These volumes will help support the commercial opportunities in our pipeline. Our LNG marketing team is pursuing additional deals to further optimize our supply portfolio. As an example, in Q324, Accelerate signed mid-term agreements for LNG purchases and sales in one of the Atlantic Basin regions in which we do business. Over the terms of these agreements, we will purchase and sell in total approximately 0.65 million tons of LNG. The pricing will be based on a major European natural gas index. And under these agreements, our first purchase will be made during the fourth quarter of 24. It's a great deal for Accelerate because it furthers our efforts to expand our portfolio. It also helps to de-risk the investment we plan to make next year in the LNG carrier that would eventually serve as our first FSRU conversion. Like other deals we've spoken about on our calls, Once again, we are buying and selling on the same index and de-risking margin. We are being consistent. Last quarter, we discussed our order for our first reliquefaction kit for our fleet. I'm pleased that interest from our customers is there as we expected, and we are currently in commercial discussions to install two relic units in our fleet. Last quarter, we also shared with you our interest in entering the Vietnamese energy market. Vietnam is one of the fastest growing economies in Southeast Asia. It is a very attractive emerging market for foreign investment. This economic growth is driving a rapid increase in demand for energy. LNG will play a pivotal role in the decades to come. This is especially true as Vietnam transitions from carbon-intensive fuels and introduces intermittent renewables. As a U.S. LNG company with a global presence, we are pursuing opportunities to develop and invest in LNG infrastructure in Vietnam. In September, Accelerate signed a strategic partnership agreement with Petro Vietnam Technical Services Corporation, or PTSC, They are a subsidiary of Petro Vietnam, a state-owned energy company. Through that partnership, we are studying FSRU-based LNG solutions to supplement the declining domestic gas supply and expand the use of natural gas throughout the country. We remain in confidential negotiations with our counterparties on the project. Last quarter, we also discussed the need for an FSRE-based import solution in the lower Cook Inlet region of Alaska. The south central region of Alaska has historically relied on Cook Inlet natural gas for most local heating systems, electricity generation, and fueling the local economy. However, Cook Inlet domestic natural gas supply is expected to be fully depleted by 2035. This means that the region will need to import LNG even sooner, starting as early as 2028. An FSRE-based integrated terminal is the best solution to meeting the state's near-term needs and helping Alaskans bridge to their energy future. We continue to work with local utilities and state officials, and we are conducting technical surveys that will inform the integrated LNG terminal design and engineering. Before I turn the call over to Dana, I'd like to address our business in Bangladesh. On our last earnings call, we talked about the ongoing transition in the government. Since then, I've had an opportunity to visit the country and meet with the leader of the Bangladesh government, Nobel laureate chief advisor, Muhammad Yunus, and several cabinet level advisors. Bottom line, our existing contracts in SBA with Petro Bangla are secure. From our discussions, we also know that there's an appetite for even more foreign investment in the country. We respect the government's deliberate approach to ensuring all energy infrastructure and supply agreements meet the current and future needs of the country. The reality is that the fundamentals that support many of these prospective projects remain the same. Bangladesh needs more natural gas. We look forward to supporting the government in the development of future energy projects when they are ready to advance those initiatives. Today, Accelerate's two FSRUs deliver approximately 34% of Bangladesh's natural gas supply. We are a long-term committed partner to Bangladesh, and we are well-positioned to support the people of Bangladesh for many years to come. With that, I will now turn the call over to Dana.