Archaea Energy (LFG) 17 Aug 222022 Q2 Earnings call transcript

Good morning, and welcome to the Archaea Energy, Inc.

Second Quarter 2022 Earnings Conference Call and Webcast. [Operator Instructions] As a reminder, this event is being recorded. I'd now like to turn the call over to, Megan Light, Vice President of Investor Relations to begin. Please go ahead.

morning, good and you, everyone. Thank Energy, Welcome conference quarter earnings second to Archaea call. XXXX Inc.'s today Archaea's With and Nick are me Stork, Archaea's Financial Brian Chief Chief Officer. McCarthy, Officer, Executive quarter afternoon, and results and for operating portion Archaea Investor on those half at of released yesterday the our are financial website second XXXX of and the results Relations available first archaeaenergy.com. be the and available are also a our website after The of call replay XX presentation available for this will and months. webcast for access call, completion to this on

Before we to which like contain to I'd remarks assumptions. on remind statements, our begin, your you this involve forward-looking answers and that risks, uncertainties, call, including questions,

reflect Several such not are on reflect statements could call, obligation from as contained forward-looking to statements of statements and These factors circumstances differ call. differences Forward-looking of does this the Slide this to cause not Archaea presentation. X materially statements. is our that contribute or undertake are any guarantee actual after the could of events described date to forward-looking performance, of and what date results such views our a or update in of

presentation. of in or and refers a call gas limited full earning of which the R&D Additionally, projects which are backlog contain estimated including measures not company's power completed certain discussion ramped A swing. annual annual agreements This after power measure discussion is to development earnings rates are to GAAP adjusted nearest reconciliation appendix specified the contain currently within and non-GAAP definition estimated the long-term adjusted up will the long-term to EBITDA place for non-GAAP this but used to of these EBITDA. to measures, of will call measures in included also

in results information performance. and with useful the consistent financial and evaluating estimated uncertain be of reported performance expected from a or or closest of measures management's underlying Our in used be operating in inherently Non-GAAP accordance and as and operating long We effectiveness this presentation priorities. for begin manner with not of business these be reconciliation power these then may in the results. and such income our that differences XXXX annual addition in evaluation a Certain assumptions to in today's be considered quantifying EBITDA the and GAAP providing financial will our earnings material. second an inherent year amounts. estimated and different may U.S. estimates non-GAAP additional assumptions are as adjusted actual believe annual long-term and will to a result recent should update isolation earnings be is provided considered relevant regarding and measure development results, operational without the measures includes call the Brian overview due estimation. highlights, GAAP full-year long-term power result term Nick A commercial regarding information GAAP presented our in review guidance. of on financial certain strategic substitute and difficulty cannot to XXXX net by in full-year and effort unreasonable a give the provide results update an adjusted loss, quarter financial estimates should

Stork, questions. now I Archaea turn then call for And the to over Executive We will open the will call Nick Officer. Chief

our year. first the remainder excited Archaea's to to discuss quarter be team's Good in of second achievements half thank of and XXXX we're here heading for today XXXX call. here morning And the earnings for in everyone. being where you the We're

all price commercial corresponding additional project valuation, amended secured term backlog credit upsized and fixed meaningfully months, signed grown development we entered have the XXXX efforts and renewable produced last power, into a our a highlights team's performance and the estimated Archaea development acquired Archaea JV, changing of an I'd by like six The contracts, electricity have energy collective into programs. of RNG Plant our models business key at industry. start facility, Archaea on reshape successfully continue X industry a second built lead to strides annual gas and our sharing to for Version made long of platform Over landfill few earnings and first quarter. long term components our compelling that will the

EBITDA MMBtu, the we net of million and second XXXX, of production million megawatt quarter sold hours, of X.XX of electricity First, million. income reported XX.X adjusted production RNG of XXX,XXX sold for XX.X

positively sales by market performance impacted to of strong to by lesser and as royalties revenues. cost higher and gas gas Our electricity due and utility to extent impacted well higher employee higher was costs of due higher natural negatively costs, electricity energy pricing environmental costs, attributes, as

to half increasing the As are of guidance. the we year, look adjusted second EBITDA XXXX our we

We increasing favorable recent to to are expenditure to development capital guidance additions also development our incorporate related costs XXXX our backlog.

reaffirming and contribution In Renewables, electricity also Services. year were of we funded we completed our are RNG XXXX to with transformative July, year quarter We Strategically, RNG joint initial early guidance. sold in our production development two transactions our XXXX that our updating year. production this announced sold successfully second full Lightning guidance the Republic full venture capital

closed our acquisition of seeing successfully forward adding INGENCO. of of we Wayne Fort previously And the both concurrently success XXth Lightning to on growth INGENCO acquisition with business. a of project the While JV impact to the and the future announced and look Renewables site. the We also the

the from owned pursue wins the addressable RNG landfills scale processes across recently rights government the are company's to the development company's these gas new to and - sites, develop with Archaea are at landfill competitive market large These to won three facilities development signed backlog consistent new and produce will for public total XX at U.S. RNG these private Additionally, RNG opportunities agreements landfills. XX Once RFP strategy municipal projects increase of projects. in

to in appreciating expect indications to meaningful additional RNG contracted plan. new long year. our Moreover, commercial driven in the by term to our from performance demand translate this contracts additional agreements RNG increasingly seen strong development made we phase returns. within operational our and RNG project We've sales on RNG progress Operationally, optimization price projects. dynamics we asset On we base. increased announce which to we into the the RNG initial fixed improved second volumes recently that existing make progress our which front, production results UGI, for and within work continue supply of of and pricing continue our Énergir We've market, build also expected added contracts new signed with benefit half and ultimately on base, XXXX

from XXXX, and RNG inaugural installations business our year. came the digester secondary base, announced year. year-over-year we're as May earlier RAC, we Archaea Legacy about timing original legacy we April to the the our X and second high was upon Plant commitment, XX for Version from that proud execution. continued and improve winter ourselves exceeding facility achieve Our online RNG of Alliance between to plan impacts are preparing to the are issues, Assai. we asset I'm Archaea since we of to committed Across in Despite track our actively to this to to built the and do. have a of this continues and increasing months doing commitment our Aria idea It's or half existing going uphold maintenance XXXX goals. we that you're fighting the end production say at combination Aria we base business made asset in production either optimizing original said been When what permit Board, on in you that

for on existing that we three to facility to sustained Meanwhile, are and offtake development pricing continue projects current our and imperative EBITDA has at we ourselves the our contracts Assai deliver legacy reinforce on generate to base. in position full to the long constraints. production returns year, operational to term High development X price, appreciating maximizing multiples track are to are lastly, fixed initiatives deploying major our we build our at And commercial standards up in operational environment are perfecting we operational additional the acquired ensure lower term. to term and Version and with of by Plant Archaea are to backlog originally flows multiples. on expected. there are we expanding value RNG while RNG our This grading long We ARIA us commitment we completing Collectively, distinctive maintaining and capital mitigating Archaea meaningful capacity improved scale to operational excellence. our asset adjusted assets are EBITDA focused and efficiency as both from continuing execution higher ramping sign for execution They're and focus design. our and attractive optimizations than short up attractive widespread dramatically ability

us position development. executing with for significant on these all We believe are and competitive initiatives will they advantage future a currently

maintaining on these first operational excellence there. and of focuses The initiatives Assai project

the facility downtime were design mitigate continue technical Now in our full and to goal, components that is processing this key development adding To in operating we uptime our Assai methane methane accomplish Alliance the Keystone successfully or team internal invest Landfills, the and at from recovery we focused light events. to above flows redundancies targets. potential the of while on both to

on record the expect today into daily in our legacy optimizing year. plant through next efforts being multiple RNG continue several base. we in achieved initiative any the remainder the increasing RNG months, industry, flows resulted in production focuses and have Our The the for to plant last asset the of times

identified of two business. the have could power that more address than key our We double legacy earnings areas once

or RNG feet nearly valuable nearly flows That the rather landfills, many per gas being are flared cannot be combusted. First, creating or SCFM gas handle would the landfill plants to minute into XX,XXX Assai from inlet combusting coming plant than coming cubic flaring equivalent RNG. of the undersized standard and of full our resulting all landfill over in legacy

based COX plants our right-size plans to lost Second, systems and and or facilities many grade high additional systems, operational upgrading and in expertise same insufficient unscheduled and separation legacy or sized handle which downtime use rejection enter We're leveraging flows these the left COX to of robust result our standards. these separation best-in-class unaddressed, interviews membrane methane. have units nitrogen technical to underperforming to full if

landfill to base result ramp facilities not XX,XXX added EBITDA SCFM through expansions to also million optimization around legacy of ongoing in existing program, completion in improvements our We provide other asset to is after but specifics $XXX than our will expected our at annual with in incremental capacity additional up. gas mitigate only combination more RNG wanted lost efficiency which the

we're reflecting prove Plant skids, Shown some both in standardized of projects. Archaea why these standardized the the with often modularized on the identified modularized major build revolutionary Version other are that Archaea For also systems we're bright want actively green. modular excited our separation increasingly design easily so approach I a the success. design. to deploying we We're to COX and new X first initiative, and X design X be are injection units, optimization our all will VX Version here plants can and Version And reinforce the equipment, third Archaea key pictures design of across be cornerstone our of which discussed. confident about Archaea measure

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the efficient the also a highlight from unit X increased And are utilization, superior to our capital asset which Archaea margins flow dollar expect level from designed to by unit ensures more and power landfill margins plants. plants While to off reduce why asset utilization. both of shelf from ultimately relative operational continue topic we can or that we from Ultimately, industry RNG that allowing absolute consumption. approach drive an excellence, on to few I driven We on expect basis highlight that want and standardized operating stronger we we cash of deployment. improving power our Staying self-sourcing gas electric we benefit overall molecule and level for higher to standards. expect expect be our To key our we RNG to of our items a extracting ensures of can every every plants. performance portfolio

and transportation avoid We continued pricing compelling discussions. with risk. and improvement to is environment value a a in offtake and long offtake offering improving on marketing our significantly term pricing basis also net costs term term relative short improving the Long transportation see less markets

pleased improved to continue with plant the our informed which which Shifting leverage we're performance. we strong announced by updates during to second quarter. recent and also team on plants run gears, provide transactions We significant our in-house of technical our operating making results exciting decision backed a in professionals few transformative two

to expand. site. of the The to with net In the renewables funded Services First, is to we which Wayne for to July progress project continues venture the joint XXXX, with potentially $XXX site after gas constructed. the contribution build includes initial JV one landfill company's plans Republic Lightning our in grow, the rights. Renewables Renewables, million Fort plants JV to lending included acquisition medium site on Fort Wayne added capital contribution XXth our that flows Renewables, and of RNG lightning SCFM and RNG new to BTO the largest will to XXXX up of as it making the portfolio expandable a it's JV be facility a plant Lighting continue our

existing contract a service JV engineering RNG and across work development risk project allow execution entered the the all to agreement systematic development. XX and our EPC projects. believe zoning expedited pre-construction permitting, under and and approach addition, Lightning activities to In timing into We reduce Renewables will Archaea upfront for new on

On Reduction the excited particularly are investment Act, benefit in to Brian tax potential see initiatives. the of complementary shortly of discuss other Inflation upside passed in our detail heels credits economic more will projects on we to from addition which JV recently the business the

our energy footprint strategic time capture July a where advantage valuation of successfully as landfill portfolio geographic across renewable acquired by advantages the at up closed We're relative electricity INGENCO very value XXXX, INGENCO can scale real transactions. bring constructive especially opportunity we on of announced self-sourced has mid-Atlantic, to of costs we electricity to portfolio. standards. in comparable The recently Virginia in the to compelling or announced believe and was Archaea taking gas very significant also many example it We to at is acquisition these electric great previously this monitoring hedge in consolidated and plants and a

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yields XX construct while in growth enable secured maintaining in the projects over to that this high Brian, turn ADA want operating through and We believe largely also we'll our commission to and performance and per call development we do shift be and expected secured we expense, operational lay projects processes operational and RNG tier to that a to now executing out optimize efficiency. on to power grow I strategic continued asset discussed many chain a that earnings I operational supply should MMBtu by that XXXX. capital incremental Before construction the I marketing backlog XXXX priorities. to be believe able $X initiatives royalties further excluding pipeline to advantage our and our scale focus are competitive on grade while growth, costs, top today, With excellence with and our and us development continuing which earlier We in able expertise, that towards transportation invest technical of upholding a improved will achievable utilization. is

COX pursue monetizing in translate electric generating development an of our annual across predictable mass our Outside do This operate. increasingly our us and add investments can opportunities to on addition, municipal see we without improve term provide hydrogen volumes, opportunities projects landfill a where have into this heat portfolio waste backlog power. an existing would landfills additional making that critical of flow earnings acquisitions. into our underpinned for these of portfolio, believe we cash term long projects pathway RNG and relying generated billion should the collection the by RNG clean we Archaea. identified is premium free improvements projects. initiatives monetizing these long to and at for The towards within attractive additional by In highly estimated yield economically organic $X We and efficiencies we

we business for growing allows Lastly, and a non-diluted are is rapid that our to in committed way deleveraging.

near ramped projects. RNG We with are deleveraging already rate high support build return on to that low well will way our multiple risk that EBITDA cost current $XXX a complete are a run flows team six greater can has Moreover, point. an continue and our way. I focus committed we capital than low Once will growth projects low financing and year term million. de-risk action to at full a non-recourse and in additional been up year, explore further months non-diluted for this the opportunities the accomplished It to has packed work to amazed continue our be of on

Looking development and and achieve the provide Brian remainder I'll this the and with program. and important to the XXXX towards turn phase our beyond, poised a development our And over business will next financial we're of prepared of who year to commercial and update results that, guidance. review call

today and financial I'm Nick. review Thank guidance. morning results update be and happy commercial developments an our you, good to here to all. on provide And

a opportunities utility with RNG the in Pennsylvania, and into Incorporated. and a purchase and entering with for a its under United regulatory agreement, under RNG interconnection partners owned interconnection sale for Under will term by program for period by our the with on ambitious to price pilot a just Énergir portfolio grid time July second with Pennsylvania subject a wholly commercial Assai. and our hopeful our production generated after RNG This UGI one of the agreement is a program second commercial in new X this announced Utilities we could October We to allow partnership sold five facilities contracts. RNG. is the fixed agreement July continuing attributes from that utility of a partnership X.XX gigajoules, approval, announce the purchasing not regulated UGI RNG million thrilled is Moreover, we purchase regulated with XX years our purchase Nick be the Énergir years. associated with expected purchase of to and decarbonization in As States. expected Under of represents for facility MMBtu has agreement. is one price is of UGI mentioned, MMBtu in environmental Assai under Archaea's We lowest a for purchase offtake first day cost annually in XXXX, fixed are Archaea over environmental its attributes medium additional subsidiaries commenced existing agreement annually Énergir is or where expects X long gas XXXX. This commercial of of for of Quebec, to this sale expanded commence and associated partner intake, regulatory relationship natural entering from The of production to and with which into for Utilities term alignment contract with per XXXX. XXXX continue additional RNG our authority gas RNG UGI requires could as expanded its a deliveries million commercial contract goals price agreement, securing of term more agreements forward just long first we at grow look well. In XX% its recently to agreement offtake RNG goal in them. Énergir. we period our fixed RNG of

a growing differentiated interconnection supply contracts all months, our regulatory market We two over term to mandates RNG It of credence track market, market partners opportunity. and growing strong which wins dynamics our last decarbonize. about expect of increasing amid the to demand price fixed additional an existential the These demand within commercial record our model our through to number and commercial long add strong strategy or RNG supply focused gives purchasing our underpin the participants contracts. with repeatable of of continued on excitement which constrained from remains XX the

We commercial coming additional expect announce to agreements months. offtake in the

broadly. the and the for XXXX, see incentives the front, support and growth policy were pleased Inflation IRA industry benefits IRA, to billion and of renewable it the The of entails energy On renewable Archaea the introduction and provides alternative development Reduction over or to due the passage Act we in of and infrastructure. funding $XXX energy industry to the U.S. of more we believe

Archaea, and provides envisioned options to credits electric potential benefits well landfill plant in the gas sequestration tax carbon for and federal significant certain hydrogen pay RNG and For federal and initiatives. of development, for as as our utilization terms credits, direct tax IRA clean

investment RNG up tax For landfill and IRA costs. of credits qualified of gas to electric the projects, to the provides XX%

electricity electric for to the be alternatively [$X.XXX], credit gas per landfill production tax may to inflation equal For adjusted produced of projects, kilowatt available.

a For of carbon capture per available. COX credits to metric to of projects, clean Archaea. credit stored be kilogram tax projects, and captured available up hydrogen may $XX $X.XX And up per of tonne may tax for to be

product process. large average, high COX generate is COX upgrading benefits about potential valuable byproduct RNG RNG, geologic a our portfolio. of sequestration we're the to For into very light all stakeholders. in hydrogen. to the prevailing core gas available. actively of landfills waived our committed A In requirements complementary value both may of provisions and clean of may our composed business also landfill stream a lines COX of RNG we purity unlock or and and the opportunities bonus we of operations, highlight also to to excited amount natural are The COX that two typical the wage on that utilization some are to or Therefore, naturally electricity satisfied. apprentice are cure are IRA, is and credits decarbonization economic to significant pursuing COX are volumes landfill these tax Similar satisfied XX% from repurposing and these of our we emission potential occurring and untouched activities of certain credits require be gas

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hydrogen technology. In landfill or be portfolio. of We hydrogen a we SMR production being closed clean in veteran and are that addition an plants team not pursuing opportunity ideal low low to by sites RNG our have would stage SMR experts. carbon a competitive four as that flow hydrogen currently economically development are potential CCUS, technical within managed and otherwise using at projects currently also Clean feed are

projects While our review I on our continues like relying incremental business these PTC would ITC offtake evaluate second benefit could or LCFS, that to development XXXX benefits. quarter emerging underwrite of the potential results. And term now long to opportunities without team

well incremental facilities, RNG generated electricity. the in of An recovery are which XXXX for the gains XXX,XXX across RNG methane improvements optimization impacted hours production was by production of in market second severance quarter the costs, partially driven incremental megawatt electricity, due compared December gas higher changes as higher and positively second fair production from utility attributes, we as the X.XX January cost PEI reported from sales completed and environmental G&A negatively which royalties transaction gas, value initiatives. million produced by sold and positively due and discussed. for $XX.X for quarter XX.X million previously was of $XX.X higher costs and of for and quarter in electric quarter, costs, to higher pricing XXXX, quarter, For which by royalties costs Electricity net increase positively primarily by million natural to second acquisition by costs. income the of We million production and by warrant Soares the impacted sold first higher environmental employee was strong extent RNG electricity, strong production EBITDA to positively sold to completed as as and respectively. to from impacted was power of portfolio and gas of market MMBtu higher and the energy were natural reduced pricing impacted asset quarter efficiency the other second derivatives facility. offset impacted Assai We a adjusted our revenues. attributes, of totaled costs sales RNG from lesser and due and

financing. outstanding of XX, Under letters issued and borrowings including facility, borrowings of revolving credit have million to Assai $XXX.X borrowings June we outstanding our of had we totaling of million. borrowings, of $XX term million $XX.X outstanding project $XXX of As our million million outstanding under our loan, credit related $XXX.X and

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full-year Today, EBITDA call $XXX.X updated $XXX.X guidance. million. adjusted are I'd for to the our to million discuss Before turning our range we Q&A, to XXXX like over XXXX guidance increasing

$XXX to to our by million our also are related capital $XXX additions capital previously to costs range $XXX improved backlog favorable efficiency. $XXX development recent million from incorporate balanced excluding development We costs to increasing million to to guidance million expenditures acquisition

In addition, current million MMBtu. to and our ranges. guidance published megawatt XXX,XXX sold to guidance XX.X slide range guidance the of subject is as the production we to RNG guidance electricity and XXXX of are All date underpinning range million our sold production This hours is reaffirming our updating XX.X XXX,XXX assumptions to change. shows

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Thank closing, In projects we strong second are XXXX run us cash to base position completed development once year's our all we half rate flows all asset guidance, believe to gallon. expected turn that, by our call emissions of you and With interest over our believe in that we for expected the Q&A. even to financial term this further. further second meaningfully a And Within XXX who in deleveraging EBITDA RNG want the I generate believe on to impact that To assume development energy we beyond. an performance. support emissions for execute methane approximately this lower underlying volumes renewable already from to reports the recent half with of within the adjusted remarks, is we for centers Archaea's activities which XXXX prepared to flow of a continue up we our guidance and G&A will run of on Moreover, $X.XX lives growth, EBITDA our contributions to in landfills, priorities to are results scale planet. reiterating in our bring. in and and shows from live confidence the sizable Xx to and about rate stand EBITDA which the range per obtain adjusted matters near builds, which price operator bridge also our to increases before the light our today's achieving new truly improve of additional full operating in of end EBITDA in immediate in our and adjusted on achieve near of plan this efficiently we the million puts our can we backlog gas and leverage year, financial scale open For over conclude greenhouse $X.XX ability XXXX people your execute $XX expected moment reaffirm ramped in I'll Archaea. expanded range million, the rental a will to optimizations leverage it

Thank you.

the proceed questions. We will your [Operator of Whitfield line from Please a question-and-answer first Our now Derrick with be with Instructions] question session. come conducting Stifel.

Good your progress. and and commercial operational congrats morning, all, on

Thanks Derrick.

slide Assai guys, SCFM you production assume Project flows that and flow assets. and you on XX a could last presentation achieve your some characterization? optimize for the in timeline additional I to an Is If Referencing and the we we year's color zoning guide ask delays excellent you slides incremental certainly were a reasonable XX,XXX in fair from if legacy referencing of got nine to XXXX. RNG experienced to - QX pipe wanted add to guidance position at

Yes, this Derrick, Nick. I think is

those municipalities it just long a consistent to energy as And and taken just be It into fair sort to that's think Landfill incorporate think as zoning is pervasive than then think project this to zoning happen. later projects, know, that's Alliance I of to industries across plan your gas you renewable permit perspective. months expected I could a And taken and regulators issues for they site and just but with answer the approval. from down board, approve, I first things we of a couple is things of for have approval list when question. I a including the long statutory got as just well, to a the other we generally, wasn't about comes get

assets really environmentally existential know, projects an risk. couple going them. incredibly it's our are As risk, you XX, support the from not beneficial. about And a but we And timing really, And RNG a have, producing most just really local municipalities that to zoning that concentration to year, the couple risk means a at recognition. could permit, revenue with there's, weeks ago back a things some and even of around single XX, the particularly close year on quarter, a move projects end of

exactly improvements in So, ago. yes, And on excited were ago, methane Aria, in terms of see a capacity at recovery that about possible more portfolio year everything kind the second the about we of are with we of your track. that's we're is, improvements, and uptime over part know, Aria an how improvements, Basically terms it. year thought really we of a when looking than was them we're you question and

incredible this So executed it's what earnings a, on. is what think on And power production it's point an builds and company new optimized. that I when is, dramatically to. that's And fully that's a really future creates we're base RNG any that to before And that's we're an asset stronger year. standpoint, focused from and trying growth

CCS similar more that partnerships opportunities CCS between to IRA in at or shift guys resources? should you your development Slides Pittsburgh? follow-up, more If my XX a value was your CCS, appear XX, and the likely you in the has internal legislation is read, that positioning chain Is it would of that to based fair a what advanced of we expect between minimum Shell on discussed and new as over deployment. I leverage Terrific, perhaps would and

that's -- just question. a Yes great

we project. clarify, to with working a Pennsylvania geological as classics being in qualifying don't but another to just do lumped were a partnership sequestration Q company Shell, Shell on hard have permit developer with quarterback that and the first a in So was

it Archaea of And you we're had that And grade. independent large knew we really value that throwing to excited I were kind other we sending with, that when just So clarify away thermal and about, of know, number oxidizer. pure industrial highly we a knew close volumes very it and an predictable started had projects. that to that, project COX very RNG we along COX were think of that to that is a we

renewable natural of byproduct Just from RNG gas natural gas. as to going a our producing landfill

sitting was COX, large COX which, end today. XXQ. initially and certainly it than the of could IRA universe, we a and of thresholds, potential qualifying figure on, on volumes maximum an with COX to which them determined for use initial opportunities of to of still do only But And it that of some value over very focused favorable the number year dramatically we for around geological the projects use along tons extract benefits us were a qualify something to really flow exploring per created top and way increase the do beneficial sequestration. that is narrower that compelling and with qualifying sequestration, with large that end because it metric we thresholds, are we EOR for the for XXX,XXX with projects to, to were built the So sequestration that initially, qualify team out And geology. exploiting was lower related other

excited we may geological of what lot were in sequestration, a more green infrastructure as yet In COX we processes short and industrial we built that that that a industrial do where out. of more to getting market, and a about that, you can't know, input a sees as into close COX be kind or addition isn't, to not just isn't

I real feel And have it's of technology expanding opportunities So us front from certainly we've had we that that perspective, and are in exploring been something certainly nearing the in in opportunities value. investing real the a a the an set personal like IRA, really think we with heavily and of some background, point, we've perspective. with

responses. Thanks. Thanks the terrific. for That's

thanks. Derrick

you. Thank

line of questions. question coming with Holt. next with Blair the Please Our proceed Tudor, Matthew Pickering, your is from

you Reduction maybe morning, Inflation few in Nick, and good IRA Brian, into the on go on and that was the could will Hey, Archaea. Act. support how the impact details for your RNG directly for hoping thanks comments a I more

your impact pace of I this does on long-term smaller to from so this, three, development you addressable your does plans? accelerate your and market us expand more have financing do guess any ITC? And one Two, does receiving expect this by making landfills economic then the XX% the

Brian, this Thanks Matthew, this one. take is I'll

and our I has equity, three all and, takes returns off-take. extremely long-term given even very think projects level. we ITC I think on projects, the to the capital finance just And thing compelling ultimately our favorable yes, our next with to when answer about on first the on we the is it this before and returns how think economics

I of on take So with would X% valuable. building. our advantage from position can be of perspective, the a return perspective ability leading And already between that to so be in ITC, terms XX%, of anywhere in spent costs generate we're on think and equity to capital extremely total a that trying of,

is further our in this projects. flow increases And especially the lower so advantage, just

about, we now piece last it and know, are going each our potentially the think you some well, looks the when our March even partners, JV of July, this, from through flow JV of think we not would our taxpayers, additional I that it with ITs of those think be which partners there forward. in very And we bill about having about and benefits some work contemplated, and how grow terms our through JVs had favorable as

the this is coming words, fair details know tighter? it sensitive. So fixed But existing is at that market contracts in these new price highlighted two in your price are you then contracts. new a pricing are than higher And getting fixed assume fixed other good. to Sounds average? I

the volumes that also is we're receive. forward today price dynamics this Archaea, those you the forward, to count to as of going scarce. for scarce volumes improve. flowing portfolio from And to very we're not at pricing the long-term work seeing ability is operational all, volumes perspective of excellence the large to And going that market on bit desire premium have Brian and again, with first a only So we and able continued are a fixed flowing of look

what premium not we're actually with So long-term offtake and and that our demand, know, doing, Assai and see excellence third it's their okay to their with only we continue their not the at And well in customers that to what what that you going contracts deliver, our that's we're additional customers that they that done they're want that. because they the same the part seeing delighting that see, second the participate other partners, regulatory we said only of we've for also supply - that, receiving offtake fact highest folks we RNG is we're with that derisking for also the a it's would but you forward, supply we're are mandate time providing we now our and industry. delivering at why and we're say, when need we're volumes derisking that is quality

forward. grow part they And are so, excited our see so they of a backlog, to of value how partnerships, can our it, have volumes they them, able large continue flow, we're customers about to continuing we be and their we be with they very serve value very projects be And see their going they'll we our need because creating stable demand backlog, they economic, lot map, to they'll and when goals. that a these highly are

$X.X be constructive what couldn't billion we we can it. excited couldn't taking partners at from our then financing with more on about over be the a it provide that before economic can that say market to did now it, And see, a ITC, visibility, an makes even to of because an they on financing the easier revenue So some more look just okay, lot forward improvements of we basis. it even doing, much how before we're the on side,

Great, thank very you much.

Thank you.

of question questions. the next your Brothers. Please from line proceed with with is Craig Our Shere Tuohy coming

congratulations all the execution. morning, Good and

Thanks Craig.

seem capital kind funding doesn't of It have greater seems shared. it now, like we have technology cost you issues. issues, seem offtake cuts or to doesn't liquidity and legislation. the like issues, which development you driving picture you seem be one faster Just previously even have have And than doesn't big like project it question, IRA

understand this? permitting, five I to think what governor it we equipment how trying much chains, I'm how can So into growth mean, on about is you labor, supply or pack years. should the is bottleneck

That's a Craig. great question

enough for Republic us XX acquisition, is which entire also of really was non-dilutive of. of fully the fund JV a liquidity a way to development give I in and program, part INGENCO INGENCO projects, development our solve which to critical initially, part it is for the the included us backlog think to dry and powder

So that answer that and once part and we of know, think did people needs, really the next I processes. about capital solve for is you

and or version time financing really quickly. or XXX its its that the limitations think company, I based very be year, overall, with have employees. future, that we we built the leveraged are them are approached and Archaea’s them. prudent we we've And these attractive, in and capital of people refined, have whether and now - while assigned. we we we've can to being the business growth. and, about minimizing our determined we that project And to equity the to leveraged achieved So, think the across XXX been process, has contribution this those It's to of and staying, under terms meaning that across last Today, its you and standardize be additional everything of real we're And and and first large, it's prudent on we think, or on and Everything processes know, also is non-dilutive trained very or see and which we processes development, will have extra-large hard a time sources non-recourse portfolio. capital opportunities me permitting X, safety. that over small, medium, a were process those is done RNG for zoning, tried

deleveraged, and being think prudence I important. So is generally

an committed returns growth. first, And signing portfolio And through and were weird the and RNG, non-dilutive that we highly really also we we of And kind acquisition. returns today second. so on prioritizing that know, another show investors, have And but hydrogen that second projects capital. a lower then you and think that I without the have the to that of done focus compelling recovery just, sort disciplined additional a of some COX, just about. prudent, high on factor third and heat to And then that's we've part to number the that's work of be - doing to is returns benefit or everything should the on of of we're talking we are development capital that's not capital determined and things core without agreement the that's other on

- overall no philosophy is not forward. - our really reason that to that and So year expect, of outlining us from per kind going XX there's projects is

we're be on able think built we that comfortable capital I would to and all that. limits And just what I the this internally the first. do, on really at then point, higher the very to and prudent growth, that returns and to through prioritizing seeing we're to think processes leverage saying

thank you. Okay,

Thank you.

Our questions proceed Please Whitfield questions. from will of Stifel. with the your Derrick with line come last

Hey the your Brian guys, follow-up Given on XXXX substantially can JV? parameters Perhaps and operational prefunded expectations the just around some development couple want you provide CapEx for items. a program, that XXXX? of referencing for strategic CapEx legacy to you've lightning and slide, priority for

this Yes sorry Brian. is Derrick,

of will I into JV relationship. so fund wonderful acquisition giving with think Republic built that something how that in the is unique be projects already which at out to to valuable that our perspective the are with the partnership built to XXXX, Republic. the next to now, projects that we be plant because terms expand lightning just as XX that giving doing So has just capital bring Want shows. to project, not to far that that's on be bring we're specific a - guidance And highlight a right CapEx project of - is we've year. been that in the is that JV the of relationship already, out seven first X,XXX at continuing and for to able with X,XXX, SCFM, lightning as went the Wayne the Fort well forward been we're the And of targeted

we're off about start, the So some it's zoning upfront. out about very, doing that board great speaking learnings interconnections and all Nick going taking projects just with those to the for very and and of all was the off excited we're permitting about, relationship them, a and,

do in to need that not but to think And able our minimize we've control timelines, as company only now our of out have portfolio, the company the to are to things can for over be laid just we to we we increasing to mandatory right-sized continue public or that highlight risk as - not well, we've out our derisk we've about. So is built G&A time. entire

And account of mean, around, add one typical that And Derrick, the year, into number and mostly thing taking could to Basically everything Nick, next last about our to that then, that important projects XXXX time online statements well. what subcomponents we've plant what said think can also at that of this we typical to, we've you have previously look is made multiplying remember by and SCFM year. - but a expect would for we as to this purchased you just kind to XXXX equipment get X,XXX major I'll I you also you in know, cost. what plant a that

the So lot of a we've put outlined. kind off construction of upfront, add siteworks with comfort spent pathway are and deleveraging a ready we're deploy spent give to shelf when our they're and which them that made a being lot and being and where lot increasingly those of to investors we've skids truly permitting a should in We've CapEx that should of systems and completion. place CapEx, zoning,

XX I be it's how at speak UGI you agreement perhaps a as perspective Page present, Brian, any appreciated? And - for terrific. program on the to of would well one but pilot the could on in that know could be last impactful PA. the That's just referencing state

program. couldn't thrilled that pilot more about mean, be I we

natural portfolio, purchasing this see years having about with tariffs contract with day as the INGENCO Mid-Atlantic this goes low recent cost a be more even that think of the an states. we think are natural every it hopefully That more And especially one that have requires time states. the our the a and board by RNG those cost to buy of think to to state looks regulated It's to we I next that deal. a across in is and is going about Mid-Atlantic compelling able point gas as effect it's first to a five goes low in utility. and now huge have acquisition that where, how contract and RNG as the gas a over

that's is piece UGI second the you ones from highlight know, one America They are largest just our are, thrilled then So interconnection at been about. in project. the good they've relationship that piece RNG partner, that really RNG they're where is North us. first side accepting to we're terms accepting in our interconnection partners that the with And the our the and is UGI. for point of

in don't is addition states to opening new And so, this have tariffs. currently RNG a model up that

the ultimately investment, really in serve project buyer customers waste the would for that's model is now price to be also opportunities in. when going our great put align there. that going second like you to have us The partners agreement, EDA that across ground say, we the It's going we RNG development to this and buy okay, a the fixed work to long-term new with to that perhaps interconnection interconnection

into local about utilities We've are how local very customers. really powerful. to lot for it be a a So It's very, used turns RNG products when local buying circular economy. talked matters their in our

you with it. the look about really we thrilled near the forward know with term. So the pilot fronts, UGI. we We're both on extremely with it's five them, - years to a And growing program. But constructive those about are over relationship

time That's Thanks helpful. and your responses. for

Thank turn this over any are would for now you. at call further management closing no I questions like to the back comments. to There time.

on months Thank as he thinks. wonderful how you. a Market, and is Mr. several The served reminder he last who

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into XX to being than the and get in RNG continue interact the LNG. over faster country the world, what pursue value from the other challenges than a construction to saw [ph] all aside challenge we XXX months. sell-side competitors our working this physics, the most we it together is we before market of the who challenge with across And timeline something this equipment Of largest unique. radically could. completed better fully and across daily I from doing I with incredible total plant to embrace in excellence done. ignored this to course, of something of Archaean's the ownership where ramped stakeholders vendors be and company is than the under daily first been done of viewpoint achieved of But the to and with could budget were the the closer who overcoming more the what to efficiency my I of bought We examples limits help doubters have our has embracing of have would time said better and to of thought of pirates. I and did major see than all the of thank add without competitors this job largely noise we people subcontractors. like Archaea of from employees and of half

your teleconference. participation Enjoy your concludes appreciate may disconnect lines today's We time. Thank your does at this day. you the you. This rest of