NET Power Inc.

Greetings and welcome to NetPower Incorporated's fourth quarter and year-end 2023 earnings conference call. At this time, all participants are in listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during today's conference, please press star zero from your telephone keypad. As a reminder, this conference is being recorded. At this time, I'll turn the conference over to Bryce Mendez, Director of Investor Relations. So, Mendez, you may now begin your presentation.

Good morning, everyone, and welcome to NetPower's fourth quarter and year-end 2023 earnings conference call. With me on the call today, we have our Chief Executive Officer, Danny Rice, our President and Chief Operating Officer, Brian Allen, and our Chief Financial Officer, Akash Patel. Yesterday, we issued our earnings release for the fourth quarter and year-end 2023, which can be found on our investor relations website, along with this presentation at ir.netpower.com. During this call, our remarks and responses to questions may include forward-looking statements. Actual results may differ materially from those stated or implied by forward-looking statements due to risks and uncertainties associated with our business. These risks and uncertainties are discussed in our SEC filings. Please note that we assume no obligation to update any forward-looking statements. With that, I'll now pass it over to Danny Rice, NetPower's Chief Executive Officer.

Thanks, Bryce. Hi, everyone. Thanks for joining us today. I'll provide some thoughts on the encouraging macro setup for net power and how it plays into our three pillar corporate strategy. I'll recap 2023 highlights and I'll share what's in store for 2024. And then I'll hand it over to Brian and Akash for operational financial updates. Starting with the macro, we continue to see very positive signals that future load profiles will require more low carbon generation for two distinct but related applications. First, generation that can load follow to balance intermittent renewables while, in other instances, serving as 24-7 clean, reliable power for baseload, industrial, and behind-the-meter applications. What makes NetPower very attractive is that our power plant is designed to serve both of these growing markets. And because low-cost natural gas is a feedstock to our patented process, we believe NetPower plants will be the lowest-cost option to do so for both. Anecdotally, Our first plant, Project Permian, which will inevitably and unsurprisingly be the most expensive plant we ever build, is expected to have a lower levelized cost per kilowatt hour than new nuclear, new geothermal, and new hydro. And as we move from Project Permian to SN2 and into full-scale manufacturing mode, we'll expect to quickly begin moving down the CapEx curve and really begin to differentiate net power's affordability from other forms of reliable clean generation. On the topic of reliable generation, one fairly nascent segment that has gotten the market's attention lately is data centers, and hyperscale data centers in particular, given the robust load projections for AI. These data centers are hungry for power. They're expected to become one of the largest segments for load growth in the US through 2030 and beyond. And because our net power plants are designed to deliver low-cost, low-carbon intensity, 24-7 reliable power, we think our product will be the best fit amongst options for this category. Similar to how we assess all market opportunities, it begins with mapping out where these plants make good sense. The mapping criteria for these bright spots are unique. The mapping layers are existing in plant fiber, geology for sequestration, ambient temperatures to ensure efficient data center cooling needs, and access to natural gas. One of the criteria that's a nice to have but not a need to have is proximity to power transmission lines. Given the 24-7 dispatchability we're designing for our plants, We expect we can go off grid and put these data centers where they're best suited. This layered map creates quite a number of interesting bright spots across North America for future net power plants for this segment. Interestingly, no modifications would be required for our plants. The initial size we're bringing to market with generation one will be targeting roughly 250 megawatts. So we can see perfect pairing of net power plants with a single hyperscale data center. And as you see these data centers becoming larger, up to 750 to 1,000 megawatts, it really lends itself to NetPower's modular design in order to deploy fleets of three to four NetPower plants to match each data center's load. The reason why I mentioned this market is it really reinforces the importance of our three-pillared strategy. First, prove this technology at utility scale. We think the world needs net power like no other technology, and the sooner we can prove it, the sooner the world can begin implementing a better pathway to energize and decarbonize. Second, build the supply chain to quickly scale deployments in manufacturing mode. Because we have such an enviable patent portfolio around our process, it's really only net power that can generate low-cost, clean power for the variety of applications we're pursuing. which means we need to be prepared to deploy our plants at meaningful scale to meet the needs of not just the data center industry, but utilities to meet the baseload and load following needs of grid today. And as Brian will touch on in a bit, we're ensuring the partners we pick today have the ability to scale with future demand. And the third pillar is to build a backlog of projects to fully activate the supply chain strategy. And we're going to use our origination strategy to catalyze early adopters of net power plants, bring in strategic partners to these projects to accelerate their learning, in order to accelerate their own license deployments across their targeted operating areas. On this last point, we're making good progress on our first originated project, OP1, and are actively working on several others, all while advancing discussions with prospective customers across Canada, the US, the Middle East, Australia, and Europe for deployments beyond serial number one. Recapping the past year for a minute, 23 was a pivotal one for NetPower. We raised significant capital through our public listing, which will allow us to develop and improve our technology utility scale. We commenced the feed program for our first utility scale plant, which will be located on Oxy hosted site in West Texas. We added Lummis technology to fulfill our recuperative heat exchanger supply chain strategy. And we announced development on our first originated project, which will be located in the MISA region. All of these accomplishments are stepping stones towards deploying net power plants at mass scale by next decade. In 2024, we have a few key milestones to highlight. First and foremost, we plan to begin the first of four phases of combustor and turbo expander equipment validation at La Porte. In a few moments, Bryant will provide additional color on these testing campaigns and why they're so important to validating the equipment and expected performance of SN1 at Project Permian. Second, we expect to complete feed at Project Permian and will begin to form the project's strategic owner group. As a reminder, NetPower considered various federal programs to supplement the funding for SN1, including the DOE grant program. DOE announced the recipients of the grant in December, which didn't include Project Permian. It's important to note that the goal of Project Permian is to deploy our technology utility scale with safe, reliable operations. And the DOE grant would have required class six sequestration, which due to the specific geology in West Texas adds uptake risk and materially increases sequestration costs to the project. When we first announced Project Permian in 2022, our plan was for NetPower and the strategic owner group to fund our first project. This remains the plan, and we expect to announce more details regarding the funding strategy later this year. Our third 2024 expected milestone is to finalize and announce our long-term strategic partner for the air separation or ASU. one of the critical components of our cycle and finally we'll continue to advance additional net power origination projects this includes submitting our application for interconnect and class 6 wells at op1 and moving a couple of other origination projects along in order to talk about those locations more publicly so as we wrap up our first calendar year as a public company our thesis for net power is playing up faster than expected the world needs clean affordable and reliable power And in my mind, NetPower is the only solution that adequately checks each of those boxes. Because of the patent portfolio around the cycle, we're the only ones who can do it. And so we've got to do it right. And we've got to be ready to do it at scale. I couldn't be more excited for what's to come as we continue to develop and deploy a technology the world desperately needs. So with that, I'll hand it over to Brian for operational updates.