Ormat Technologies, Inc.

Good morning and welcome to the Ormat Technologies second quarter 2025 earnings conference call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. If you would like to ask a question during that time, simply press star, then the number one on your telephone keypad. Please note that this event is being recorded. I would now like to turn the conference over to Josh Carroll with Alpha IR. Please go ahead.

Thank you, operator. Hosting the call today are Dharam Bishar, Chief Executive Officer, Ozzie Ginsburg, Chief Financial Officer, and Smedar Lavi, Vice President of Investor Relations and ESG Planning Reporting. Before beginning, we would like to remind you that the information provided during this call may contain forward-looking statements related to current expectations, estimates, forecasts, and projections of future events that are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to the company's plans, objectives, and expectations for future operations and are based on management's current estimates and projections, future results, or trends. Actual future results may differ materially from those projected as a result of certain risk and uncertainties. For a discussion of such risk and uncertainties, please see risk factors as described in ORMAT technologies and report on Form 10K and co-reports on Form 10Q that are filed with the SEC. In addition, during the call, the company will present non-GAAP financial measures such as adjusted EBITDA. Reconciliation to the most directly comparable GAAP measures and management reasons for presenting such information is set forth in the press release that was issued last night as well as in the slides posted on the website. Because these measures are not calculated in accordance with GAAP, they should not be considered in isolation from the financial statements prepared in accordance with GAAP. Before I turn the call over to management, I'd like to remind everyone that a slide presentation accompanying this call may be accessed on the company's website at ORMAT.com under the presentation link that's found on the investor relations tab. With all that said, I would now like to turn the call over to ORMAT CEO, Daron Boshara. Daron?

Thank you, Josh. Good morning everyone and thank you for joining us today. ORMAT reported record second quarter revenue and adjusted EBITDA results, with a .9% increase in revenue, a .1% rise in net income, and a .7% improvement in adjusted EBITDA. This outstanding performance was driven by the full recovery of our product segment revenues and margins, improved performance of our energy storage segment, which continues to benefit from new projects that reach commercial operation 24, and higher merchant prices in the PGA market. During the quarter, we completed the acquisition of the Blue Mountain Geothermal Power Plant and released for construction 50 megawatts of new projects, including 28 megawatts of and 22 megawatts of solar projects, primarily at our Hebrew complex. We also continue to advance our geothermal development pipeline, benefiting from accelerated permit approvals due to recent federal permitting reforms. In July and August, we closed a significant tax equity transaction for the Hebrew 1 and 2 geothermal power plants and secured project finance debt for our Boyan power plant. Combined with the hybrid tax equity transaction we signed for our storage asset and the project finance debt raised for the Dominica project during the quarter, we have secured $300 million of funding to support future development across the portfolio. Overall, we continue to see strong growth potential for geothermal in 2025 and beyond. This is supported by improved permitting timeline due to recent federal permitting reforms, an increasing number of BLM land auctions, our expanded exploration effort and robust secular demand for baseload renewable, which has translated into elevated PTA pricing and stronger market economics. Before I turn the call over to Assi, I would like to highlight the recently signed one big, beautiful bill that for us is indeed very beautiful. The legislation has extended the PTC and ITC runway for both our geothermal and energy storage segments, positioning us uniquely within the renewable energy sector. Assi will provide further details on the new policy and our efforts to maximize its benefit in his remarks. With that said, I will now turn the call over to Assi to discuss our financial results. Assi?

Thank you, Doron. Let me start my review of our financial highlights on slide 6. Total revenue for the second quarter was $234 million, a .9% increase compared to the last year's second quarter. This top line expansion was driven by the recovery of our product segment and the improved performance of our energy storage segment, partially offset by a slight reduction in the electricity segment. Gross profit for the second quarter was $56.9 million, down .3% from $61.4 million in the second quarter of 2024, resulting in a consolidated gross margin of .3% versus .8% last year. The decline was largely due to a temporary electric segment gross margin compression that I will discuss shortly. Net income attributable to the company stockholders was $28 million or 46 cents per diluted share, up compared to $22.2 million or 37 cents per diluted share in the second quarter of prior year. Adjusted net income attributed to the company stockholders was $29.1 million or 48 cents per diluted share, reflecting increase of .8% and 20% respectively. This performance highlights the strength and resilience of our portfolio and business model. As we continue to grow our earnings, despite the temporary reduction in our electricity segment profitability, adjusted dividend for the second quarter was $134.6 million, a .7% increase compared to last year. This strong -over-year growth was driven by the higher revenue and better margins in the from new assets and higher merchant pricing in the energy storage segment, illegal settlement with a battery supplier, and better performance of the Dixie Valley and Bihuahui power plants. The increase was partially offset by an approximate $12 million reduction in EBITDA due to energy curtailment in the U.S. and previously reported well-filled work at the Pula power plant. Slide 7 breaks down the revenue performance at the segment level. Electricity segment revenues for the second quarter decreased by .8% to $159.9 million, primarily due to ongoing maintenance work at the Pula power plant and continued energy curtailment in the U.S., which reduced revenues versus the same period last year by approximately $13 million. At our Pula power plant, we finished the planned well-filled maintenance and resumed normal operation in July, and we continue to monitor well performance. We anticipate the U.S. curtailment resulting from third-party T-line maintenance will significantly lessen in the second half of the year. Product segment revenues increased by .6% to $59.6 million during the second quarter, driven by our strong backlog and the timing of progress made in manufacturing and construction. Energy storage segment revenue increased by .7% to $14.5 million in the second quarter, mainly due to the commencement of commercial operation of our new energy storage facilities in 2024 and strong merchant prices in the PGA market. Also on slide 7, the gross margin for the electricity segment was .2% in the second quarter, down from .5% last year, excluding these temporary disclosed events, the margin would have been approximately 30%. In the product segment, gross margin was 27.7%, up from .7% last year, driven by improved profitability on our contract. We now anticipate that gross margin for the year in our product segment will increase to 21 to 23%. The energy storage segment reported gross margin of 11.9%, up from .7% in the second quarter of 2024. This improvement was driven by higher merchant prices in the PGA market, where hot weather along the east coast contributed to elevated merchant pricing. With strong performance throughout the first half of the year and robust PGA prices in the month of July, we now anticipate full year gross profit for the storage segment to reach up to 20%. Slide 8 and 9 show the results of the first half 2025, highlighted by .1% and .5% increase in total adjusted EBITDA, respectively, with significant increase in both energy storage and product segment. Moving to slide 10, I would like to discuss further the recent spending budget bill that was passed in the US on July 4. As the one mentioned, the bill extend the PTC and ITC runway for geothermal and energy storage segments. Slide 11 We now have the ability to receive full tax credit for geothermal and energy storage projects starting construction by December 31, 2033. After 2033, the credit faced down to 75% for the projects starting construction by 2034, 50% by 2035, and then 0% thereafter. As for solar and PV projects, projects starting within 12 months of the bill's enactment can receive full credit if placed in service within four years. Otherwise, they must be in service by December 31, 2027. Regarding the foreign entity of concern, or FEOC, provision of the bill, the broader scope includes specified foreign entity and foreign influence entity. The law aims to limit content from FEOCs used in energy-related projects starting construction after December 31, 2025. While we are currently assessing the impact of the FEOC rules on our all of our product segments with minimal FEOC content. However, at this time, the entire energy storage industry is still heavily dependent on battery sources from China. And we are actively evaluating all project development options while continuing to safe harbor additional projects. Ultimately, we will pursue the most economically viable option to advance our current storage pipeline and maintain flexibility in our procurement to stay on track with our expansion goals. Moving to slide 11, we recorded $16.3 million in income related to tax benefits in the second quarter compared to $15.8 million last year. In the second quarter and first half of 2025, we recorded ITC benefits of $10.3 million and $24.2 million respectively, in the income tax line. These benefits related to two storage facility that are expected to operational in 2025. Recently, we entered into two tax equity transactions that secured $139 million of cash tax benefits. In July, we received $77 million from our Hebrew tax equity PPC transaction. Of the remaining $62 million in ITC proceeds related to our rural area and storage facility, we received $5 million in the second quarter with the rest expected in the second half of the year. We expect our tax rate will be positively impacted by the ITC benefits in 2025 with an annual tax benefit rate between 5 and 15% excluding changes in low or one-time events. Slide 12 detail our use of cash flow over the last 12 months, illustrating our ability to generate strong cash flows for reinvestment and strategy growth while servicing debt obligation and returning capital to shareholders. Cash and cash equivalents and restricted cash and cash equivalent as of June 30, 2025 were approximately $206 million, similar to the end of 2024. Our total debt as of June 30, 2025 was approximately $2.7 billion net of deferred financing cost with the cost of debt at 4.95%. The majority of our debt liabilities are fixed interest rates providing stability and protection for market fluctuations. Moving to slide 13, our net debt as of June 30, 2025 was approximately $2.5 billion, equivalent to 4.4 times net debt to EBITDA. During the second quarter and early third quarter, we secured $300 million in funding. This includes $139 million of tax equity partnerships and $161 million from project financing loan at attractive rates. These funds will support our new Boyan powerplanting weather loop and our new project in Dominica. As shown on the slide, our total available liquidity is $551 million. Our total expected capital expenditure for the second half of 2025 is $295 million. With digital capex presented in slide 33 of the appendix, we plan to invest approximately $200 million in the electricity segment for construction, exploration, drilling, and maintenance in the last two quarters of 2025. In addition, we plan to invest $85 million in the construction of our storage assets. On August 6, 2025, our board of directors declared, approved, and authorized payment of a quarterly dividend of $0.12 per share, variable on September 3, 2025, to shareholders of record as of August 20, 2025. The company expects to pay a quarterly dividend of $0.12 per share in each of the next two quarters. That concludes my financial overview. I would like now to turn the call over to Doron to discuss some of our recent developments.

Thank you, Asim. Turning to slide 15 for a look at our electricity segment operating portfolio. Portfolio growth during the quarter was supported by the addition of the Blue Mountain Geothermal Power Plant. Moving to slide 16, the Blue Mountain acquisition has immediately enhanced our generating capacity and offers significant revenue growth potential through planned upgrades, which are already underway, and the possible addition of a solar facility. We are very excited about the opportunities that this addition presents, and we look forward to continuing our strong partnership with Envy Energy to deliver reliable, clean energy to the people of Nevada. During the quarter, we also expanded our management team to support the growth of our electricity segment and our EGS initiatives. This expansion included the hiring of Aaron Willis as Executive Vice President, Electricity Segment, and Daniel Mork as Senior Vice President, Resource Drilling and EGS. Aaron will oversee the operations of the electricity segment, ensuring alignment with the company's strategic goals and financial targets. Aaron will also be responsible for optimizing that performance and expanding profitability, ensuring compliance with safety and environmental regulations, and driving continuous improvement initiatives to foster future profitable growth. Daniel will lead our Resource Drilling and EGS teams, focusing on implementing sophisticated processes and innovative technologies to further enhance our operations. His work will include creating efficiencies, shortening development time, developing Ormat's ongoing drilling and exploration global roadmap, and expediting well-filled EGS development. We are thrilled to welcome both Aaron and Daniel to the team, where their valuable background and experience will help drive the next phase of growth for our leading geothermal operations. Turning now to slide 17, our product segment backlog stands at $263 million, representing a 59% increase compared to the second quarter of 2024. This growth was primarily driven by significant contract signs at the end of 2024. As highlighted in Asif's presentation, the contribution of the product segment this quarter was significant, with higher revenues and notable improvements in margins. Moving to slide 18, our energy storage segment demonstrated robust -over-year growth, with total revenues increasing by 62.7%. As previously mentioned, we anticipate that this strong performance in our energy storage business will continue throughout the remainder of 2025, driven by the benefits of recently commissioned storage facilities. On slide 20, we are on track to achieve our portfolio capacity targets of between 2.6 gigawatts to 2.8 gigawatts by the end of 2028. This confidence is driven by strong momentum in geothermal development and our intensified exploration efforts. In parallel, we are making progress in the storage segment, having successfully secured both batteries and safe harbors for additional projects, further reinforcing our past loads meeting our capacity growth targets. While safe harbors are not required for geothermal projects, the extended construction start deadline now set for 2033 has allowed us to make significant progress on the storage front, as shown on slide 21. In 2024, four projects were successfully safe harbored, followed by two more in 2025, with additional projects expected to be safe harbored later this year. These actions ensure ITC eligibility with no FAOC limitation for our entire storage portfolio through 2028, and in some cases even beyond, under current regulations. This milestone strengthens our confidence in meeting our growth targets. Importantly, despite the recent changes in tariff, we do not anticipate a material impact on our financial performance due to the import tariffs. Turning to slide 22 and 23, which display our geothermal and hybrid solar PV projects currently underway, we anticipate adding 148 megawatts to our generating capacity from these projects by the end of 2026. In addition, we have released for construction 25 megawatt geothermal and 22 megawatt PV new capacity to our Hebrew complex in California, and a 3.5 megawatt addition to the Blue Mountain power plant in Nevada. Moving to slide 24 and 25, we currently have six projects under development in our energy storage segment, which are expected to add 385 or 1.3 gigawatt hour to our portfolio. Please turn to slide 26 for a discussion of our 2025 guidance. We maintain our guidance and expect revenue to increase by 9% year over year at the midpoint, ranging between $935 million and $975 million. Electricity segment revenues are projected to be between $710 and $725 million. Product segment revenues between $172 and $187 million, and energy storage revenues between $53 and $63 million. Adjusted EBITDA is expected to increase by approximately 5% at the midpoint, ranging between $563 and $593 million, with annual adjusted EBITDA attributable to minority interest at approximately $21 million. I will conclude our prepared remarks on slide 27. This is an exciting and pivotal time for ORMAC, fueled by supportive policies in both geothermal and energy storage, and the growing demand for carbon-free baseload power, particularly to support AI data centers and the broader electrification trends that are significantly increasing electricity consumption. These developments, along with our financial results, not only validate our strategy, but also strengthens our confidence in our team's ability to achieve both our near-term operating capacity milestones and long-term financial objectives. As we look ahead to the second half of the year and beyond, we expect to finalize contracts to support data center and scalers with improved economics and to continue the development and construction of future projects as planned. We are prioritizing innovation and exploration, the best ways to develop and integrate EGS technology into operations and future growth. As we have previously communicated, we are actively pursuing strategic partnerships to develop new EGS projects and provide advanced solutions to potential EGS customers in our product segment. We believe the new management structure will allow for a greater focus on EGS and greenfield development. Our commitment to delivering reliable and sustainable energy solutions remains strong, and we are leveraging our unique capabilities to drive meaningful growth and create long-term value for our shareholders. This concludes our prepared remarks. Now I would like to open the call for questions. Operator, please.

At this time, if you would like to ask a question, press star, then the number one on your telephone keypad. To withdraw your question, simply press star one again. We will pause for a moment to compile that Q&A roster. Your first question comes from the line of Noah K. with Oppenheimer. Please go ahead.

Thank you. A lot of good things going on. I think one place to start would be around the geothermal development environment. You called out a number of expedited permitting advancements for several projects, I think, that was publicized by BLM, perhaps mid-quarter permitting, if I remember correctly. Can you talk about the opportunity for additional permitting, fast-track, what you're anticipating over the next couple of years, and what this might actually mean for speeding up the development timetable?

Yes, hi Noah. It's the one. Thank you. The changes in the administration and the tailwind and support that we are getting is very impressive and pushes us forward. We have today multiple projects that have advanced the exploration to get into a position where we can start full-size drilling and plan to release new projects in the next couple of years. I've been working for over 12 years and this is a situation that we haven't had in the past. We're actually drilling, getting a lot of responses from the BLM much faster than in the past. We see quite a few of Greenfield projects in the US that we will be able to release for construction in the next couple of years. You can also take as example Dogwood, the expansion of Heber that we just released. We started permitting of these projects I know four, five, six years ago. Only now we're able to know with the push that we see today to get the permitting and to move it forward.

Very good, thank you. I just want to make sure I've got this right on the storage side. I think you mentioned safe harboring all of your projects expected to come online through 2028. But you also mentioned I think an active evaluation around FEOC implications for sourcing. Can you just sort of help us clarify those two points? Have you effectively safe harbored the battery supply already and eliminated any FEOC concerns for those projects coming along through 2028 or is that an ongoing process? Thank you.

So I will split it basically to three parts. All the projects that are in construction that will come online are obviously safe harbored. The batteries are in the US in construction and that relates to all the projects that were released before 2024. In the beginning of 2025, before any of the new regulations came out, we safe harbored additional couple of projects. Over the last few months and ongoing, we are safe harboring additional projects in 2025. All of them should come online by the end of 2028 or 2029 based on the current regulation. So I would say we've safe harbored in 24 or 700 megawatt hour. In 2025, already 600 megawatt hour and we are in the process of safe harboring another 1.6 gigawatt hour of projects in 2025.

Thank you very much. I'll turn it over. Thank you,

Noor.

Your next question comes from the line of Justin Clare with Roth Capital Partners. Please go ahead.

Hi, thanks for taking the questions. I guess first I just wanted to follow up on the progress you're making on enhanced geothermal. I was wondering if you could just provide a little bit more detail on the progress that you've made to date and speak to the potential opportunity. Would you say it's more likely to first enable you to increase production at existing wells or existing plants? Are you looking at drilling in new locations? It would be great to get an update there.

Thanks, Justin. So on EGS, I would first start with just appointed a senior vice president, Daniel Mulk, to lead our resource drilling and EGS. He comes from Evo, has a lot of experience and knowledge in the EGS and this area. We're working on multiple approaches on EGS. Since there is no 100% proven technology today, we will be focusing on a few technologies in parallel. I believe that the first stage, as you said, we will try to utilize EGS in some of our existing facilities that have interconnection, that have permitting, that have already a power plant operating and has the ability to generate more. But in the long term, once EGS is successful, I see this as just expanding significantly, the potential growth that we see in Oman, both on the development part and also on product side, because once EGS will be a common technology and a proven technology, the demand for geothermal products and EPC projects should increase significantly. So we do hope and I do hope that the technology will be successful and EGS will be proven a viable solution in the next couple of years. If it does happen, it opens a totally new area for Oman to grow and it will have a significant impact once successful. Got it.

Okay. Then I guess curious, just following up on that, what kind of demand you might be seeing on the product side from others that are are you evolving your products in order for them to be potentially more adaptable to an enhanced geothermal well? Yeah, great.

At the end of the day, the main attribute to EGS is the subsurface impact, drilling, getting the heat up. But once you get the heat up, it will operate similarly to other geothermal projects. And Ormat is the largest developer and the large seller of binary technology. We need to remember that we are not Chinese, so I believe it will give us a significant benefit versus any other Chinese company that competing in this area to build geothermal projects.

Okay, got it. Thank you.

Your next question comes from the line of Julianne DeMullen Smith with Jefferies. Please go ahead.

Hey, good morning. This is Hannah Velasquez on for Julianne. Congrats on the quarter and thanks for batteries. So it sounds like you haven't yet safe harbored fully the 2028-2029 projects. I'm just wondering if the pause or hesitation there is to await and see what happens with treasury in terms of guidance. Is there any concern that guidance ruling might limit your ability to safe harbor any FIOC exposed batteries?

Hey, good morning and thank you for joining the call. This is a safe for the best of what we know today. The August 18 announcement on FIOC should be focused on wind and solar. And therefore we don't think there should be a problem with us to safe harbor more projects between now and year end. Because we need to have the project start by December 31st. This is just part of the evaluation of what project we believe will have the connection by 2028 and 2029. And that's where we are doing those safe harbors. The good news is that at least we know that by 2033, end of 2033, we do have confirmation that the ITC benefits will continue. And I also think that even if there will be no Chinese equipment allowed to use after that, there will be a U.S. manufacturer or non-FEOC manufacturer batteries that think it's going that way. So overall, you can see these are big numbers that we are safe harboring. And we just part of the work to decide what to safe harbor first.

Got it. Thank you. And as a second question, could we get an update on the 250 megawatts in your negotiation regarding data center opportunity? I know you've said this in past quarters, but I wanted to see if there was anything incremental to touch on there. And if any of these potential projects, the 250 megawatts is contingent on you moving forward with pursuing EGS. Thank you.

Hi, Hannah. Thank you. So I'll start with the end. All the PPA that we are negotiating today, our existing technology that are not connected to EGS. This is based on our existing technology. And the way that we are approaching it basically is to see that we cover any potential and green field that we will develop as well as any re-contracting that we will have. Negotiations on the PPA are ongoing moving forward. Unfortunately, I still don't have the ability to tell you that we are not on the PPA line, but we are finalizing the terms with them. And I hope that we'll be able to announce PPA that we signed in the next few months.

Thank you.

Your next question comes from the line of Ben Callow with Baird. Please go ahead.

Hi, good day, guys. Thanks for taking my question. Could you just talk a little bit about the certainty in tax credits and also the BLM permitting getting easier, how that has affected your early development strategy? Has it sped it up or slowed it down or any changes at all on your development approach?

Hi, Ben. Thank you, Ben. So the tax equity or the tax benefits that we see with the new beautiful bill is definitely beautiful for us. The geothermal part has a runway till the end of 2033, and then there is a slow, gradual decline of the benefit, but still it works on start of construction. So effectively until 20 CODs until 2037, and in some cases, until 2043, even, we'll enjoy the PTC or ITC benefits that they entitled us. We don't expect any limitation on the FEOC on the geothermal part when manufacturing in different countries. The percentage that comes from China is minimal and should not impact this. So the geothermal front, it's very, very clear. On the energy storage, we know that all the sales and batteries are manufactured in China and the market will need to adjust to the new regulations either by increasing prices and basically having power plants without benefits of the ITC or developing manufacturing capabilities outside of China that allows to get the benefits of the ITC. And again, with energy storage, it's until 2033, start of construction. And then

just on the 28 targets, could you just talk about how any of these changes or what you've seen in power prices have been either positive or negative towards your 2028 targets you laid out? Because there's been a lot that's happened recently. So if you're net positive or net negative, if you could walk through that.

The 28 targets that we set a couple of years ago are totally valid. We still see them. Actually, the fact that permitting is faster and easier makes them more achievable. The extension of the ITCs and PTCs helps them in the same way. They didn't change the playground until 2028. And the PPA pricing and the extensive demand that we see for renewable energy basically supports totally these targets.

Thank you.

Your next question comes from the line of David Anderson with Barclays. Please go ahead.

Hi. You were talking before about enhanced geothermal, but I was kind of a little bit more curious, more specific around exploration. You talked about your exploration program and some talk on the BLM. I was wondering if you could talk about how much capital you're putting aside for exploration. What does that look like for, say, 2026? I'm curious, are you drilling any wells yet? Are you still in the kind of geologics or reservoir analysis phase?

Thanks, David. So on the exploration, it's a great place to be and a great question. We've been doing core wells, between 10 to 12 core wells starting in 2023 and 2024-25, and drilling full-size wells. Actually, we are today drilling full-size exploration wells in two sites in the U.S. actively drilling. We're looking into next year and I expect next year to be drilling on top of the core well program, drilling between two to three full-size exploration drilling in parallel. So all in all, the move that we've done brings us much closer to many more greenfields that we'll be able to develop. Catech-wise, we have in the exploration part on annual basis somewhere between $125 to $150 million of drilling exploration wells. It obviously can move up and down a bit, but the way that we see today is that we will be drilling two or three different locations in parallel in the U.S. on exploration.

Great, thank you. A separate subject on your product segment, I was just wondering about the growth and how you're projecting that going forward. We saw the backlog decreased a bit this quarter. I was just curious how that should impact or not impact growth going forward. Can you just provide some longer-term views on how much that business can grow?

So backlog has many times a tendency to go down and up because we do sign large contracts. Obviously, once you sign it, it will go up and then once you start recognizing revenue, it starts to go down. So we do expect to see some ups and downs in the backlog. I think that's especially relevant when most of the projects that we sign today are EPC contracts, not supply projects, meaning a much larger project. Today we see New Zealand, which is a big part of the backlog today, continue being a significant part of the backlog. Even in the coming years, we know about potential projects that are expected to be released next year and the day after that in New Zealand. The other country that is very important for us on the product side is Indonesia.

They've

just issued a few tenders and we see multiple tenders coming over the next couple of years in Indonesia. Both places prefer projects that are EPC, not supply, meaning relatively large order at the beginning that is spread over a period of around two years and sometimes a bit more. So we do see a very nice future for the product segment and I would say that once we add that to our exploration efforts and the greenfield that we plan to develop, that will add on to the product segment, not in direct revenue, but definitely in workload and the potential.

Appreciate the comments. Thank you.

Thank you.

Your next question comes from the line of Derek Podhaser with Piper Sandler. Please go ahead.

Hey, good morning. I just wanted to go back to the accelerated permit approvals that you've been talking about. Could you just remind us or give us a refresher on the improvements that have been made? How long did it take before? How long is it taking now? And then help us understand how this all translated into being able to release that 25 megawatts at

Hever. Good morning, Derek. Thank you for joining the call. Historically, the amount of time it took us to get an environmental permit in Nevada could have been a year and sometimes even longer. I can tell you that in some cases we have seen that now it's shortened to as short as two months. We got three permits during the quarter within two months and Oman is now trying to go and file as much as we can environmental permits in order to expedite additional projects that were not planned to be built over the next few years. I will say though that for example in California they still need to have a specific environmental that is not the BLM permit but another permit and therefore over there it's probably going to take some time until we see improvements. But as you know many of our green fields are in Nevada but if you think about permitting is not just environmental permit it's also the knowledge that the project will be approved. The knowledge that there will not be a new endangered species waking up after we have done the exploration work. For us it gives us also a lot of runway of where we go and choose where to drill. We are much more comfortable in our ability to progress those to the permitting. It's one, accelerating but second also gives us confidence that we will get all the permits on time.

Got it that's helpful. Maybe switching to Blue Mountain, can you remind us how much this is expected to contribute to revenue in EBITDA? I think you said you'll be getting contribution beginning next quarter, third quarter and then once all the plan enhancements and additions are made where could this run rate step up to as we start thinking about 2026?

Sure right now for the second half of the year we expect to bring around a four million dollars of EBITDA for the plant. I will say that when we look at the 2027 that number should go up by around 10-15 percent as we're increasing the capacity of the plan by 15 percent we're going from 20 to 23 and a half and that project was already released in our construction. The next phase of growth for this project is that by the end of 2029 the PPL of the this plant is over and therefore we expect to achieve a much better pricing on the PPA. The PPA of the plant is in the low 70s right now and as you know the market is above 100. One more thing to mention we do believe that Blue Mountain is a great place to do some EGS projects. There is already an active whale of EGS on site so we know that the ground there is quite good and the plant is running under capacity which means it can grow significantly so that's definitely a place we will look over the next few months to see where we're aiming some of our EGS efforts.

Great I'll turn it back thank you.

Your next question comes from the line of Jeff Osborne with TD Cohen please go ahead.

Thank you just two real quick ones. I was wondering Asi if you just get to confirm the remediation work on the transmission line is that completed or is that still lingering in the third quarter? I know you said that curtailment would be meaningfully down but I just wasn't sure if it's finished.

Early in July actually in the second week of July the remediation of the well-paid work and the permits. You're talking about Puna or you're talking about NV Energy? I think you're talking about the curtailment right?

I'm talking about curtailment I think in the transmission line it's 100 years old in Nevada.

Okay so we had slight very small curtailment in the in July and the NV Energy told us that they completed the work for the year and that's why we gave the guidance to much less than curtailment. As you know we had a very big impact this quarter from curtailment and also in Q1 so we definitely assume and based on what we were told that this will less than in the second half.

Got it that's helpful and then if I heard you right I think you said there's a legal settlement as it related to a battery supplier was that around performance availability? Can you just flesh out was the system completed and not working appropriately or any incremental detail would be helpful? Yeah

this is already a settlement that we have done a year ago where a battery supplier did not provide us batteries when we demanded them and we issued the PO because the prices of battery at the time went up significantly and our contract was at fixed cost and that's why he reimbursed us so this is something that we will see in the financial I believe until the end of this year and into Q1 of next year. Every quarter we should expect to see around 3.1 million dollars of income from that.

Got it thank you.

That concludes our question and answer session. I will now turn the call back over to Doron for closing remarks.

Thank you thank you all I would like to thank you all for joining us today this was a very good quarter for Oman. We're continuing our exploration and development and EGS efforts and with the tailwind that we see from the current administration we see significant growth in the coming years and forward so thank you all and goodbye.

Ladies and gentlemen this concludes today's call thank you all for joining you may now disconnect.