Excelerate Energy Q2 2025 Earnings Call Transcript

Quartr
Provided by Quartr
August 11, 2025

Key Takeaways

  • Positive Sentiment: Delivered $107 million adjusted EBITDA in Q2, marking a $7 million QoQ increase and $18 million YoY growth driven by the Jamaica acquisition.
  • Positive Sentiment: Successfully integrated the Jamaica terminal and power assets, which are exceeding operational expectations and immediately contributing predictable, take-or-pay cash flows.
  • Positive Sentiment: Outlined a clear Caribbean growth plan to unlock $80–110 million incremental EBITDA by 2030 with $200–400 million in targeted CapEx for fuel switching, new power projects, terminal expansions, LNG bunkering and hub-and-spoke distribution.
  • Positive Sentiment: Expanded terminal services with the Excelsior FSRU at full regas capacity in Germany, acquisition and conversion engineering of the Shenandoah, a Petrobras re-liquefaction deal and on-track delivery of FSRU Hold 3407 in 2026.
  • Positive Sentiment: Maintains a strong balance sheet—$426 million cash, $500 million undrawn revolver and 2.2x net leverage—while raising 2025 EBITDA guidance to $420–440 million and increasing the quarterly dividend.
AI Generated. May Contain Errors.
Earnings Conference Call
Excelerate Energy Q2 2025
00:00 / 00:00

There are 9 speakers on the call.

Speaker 6

Good morning, all, and thank you for joining us on today's Excelerate Energy Q2 2025 earnings conference call. My name is Drew, and I'll be the operator on today's call. After today's prepared remarks, there will be a Q&A session. If you would like to register for a question, please press * followed by 1 on your telephone keypad, and to withdraw your question, it's * followed by 2. It's now my pleasure to hand over to Craig Hicks, Vice President of Investor Relations. Your line is now open, please go ahead.

Speaker 4

Good morning, and thank you for joining Excelerate Energy's Q2 2025 earnings call. Joining me today are Steven Kobos, CEO, Dana Armstrong, Chief Financial Officer, Oliver Simpson, Chief Commercial Officer, and David Liner, Chief Operating Officer. Our Q2 earnings press release and presentation were published this morning and are available on our website at ir.excelerateenergy.com. Before we begin, please note that today's discussion will include forward-looking statements, which involve risks and uncertainties that may cause actual results to differ materially. We undertake no obligation to update these statements. We'll also reference certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP measures can be found at the back of the presentation. With that, it is my pleasure to pass the call over to Steven Kobos.

Speaker 8

Thanks, Craig. Good morning, everyone. We appreciate you joining us today to discuss our Q2 2025 results. At Excelerate, we are committed to operational excellence, disciplined growth, and delivering long-term value for our shareholders. This quarter was no exception. We delivered strong financial and operational results. We advanced the strategic priorities that will define the next phase of our growth. On today's call, I'll speak to the Excelerate Energy value proposition and provide an update on our recent Jamaica acquisition. I will share recent highlights from Terminal Services before turning the call over to Dana, who will walk through our financial results. Let's turn to our value proposition. I want to spend a few minutes on the key elements that define how Excelerate delivers long-term value to shareholders and how we are positioning the company for continued success.

Speaker 8

First, we are a leading provider of critical energy infrastructure in the downstream part of the global LNG value chain. The recent Jamaica acquisition represents a pivotal step in our evolution. Our growth strategy has long included owning and operating downstream infrastructure assets, and today our business model reflects that ambition. Second, our business is predominantly supported by long-term, taker-pay contracts. These allow us to generate predictable earnings, and they are insulated from economic cycles. We told investors last quarter that our business model is essentially tariff-proof. We aren't exposed to tariffs. That hasn't changed. It's one of the reasons Excelerate continues to stand out as a resilient investment, especially in today's geoeconomic environment. We are a safe haven. Third, as a result of the groundwork we have laid, we have a long runway for growth through both strategic opportunities and scalable assets.

Speaker 8

Fourth, and importantly, this growth strategy is bolstered by strong macro tailwinds. These include the growing demand for LNG tied to enhancing energy security and advancing the energy transition. Energy security will remain a paramount need for all nations. We are also seeing supportive policy momentum. For example, the recent U.S.-EU trade agreement focused on expanding LNG exports. Any deal that's good for U.S. LNG is good for Excelerate, and this one reinforces the relevance of our business in connecting supply to demand. Fifth, and finally, all of this results in an attractive financial profile that gives us the flexibility to pursue new growth opportunities while returning capital to shareholders. Our foundational strategy remains unchanged. It continues to guide our commercial efforts and underpins the bold moves we're making as a company.

Speaker 8

We are focused on protecting and enhancing long-term contracted revenue and margins, and we are doing this while pursuing growth catalysts for near-term value creation. With that context in mind, let's turn to Jamaica. The Jamaica transaction, which closed in May, brought into our portfolio the Montego Bay LNG terminal, the Old Harbor LNG terminal, the Clarendon Combined Heat and Power Plant, and numerous small-scale regasification facilities throughout the island. Since we closed the acquisition, we have been laser-focused on ensuring a smooth integration of people, systems, and processes. We are also working to optimize the existing business, enhance customer service, and strengthen our continuity plans. I'm pleased to report that integration is proceeding as planned and that Jamaica assets are exceeding our operational expectations.

Speaker 8

Thanks to the excellent condition of the assets and the deep expertise of our new Excelerate colleagues, we are well-positioned to deliver sustained reliability and high operational performance. The Jamaica transaction is a compelling strategic win for Excelerate and for our shareholders. The assets we acquired are contracted, cash-generating, and already contributing meaningfully to earnings. Beyond immediate earnings contribution, the transaction also strengthens the foundation of our U.S. LNG supply portfolio. Jamaica's 21-year contract profile dovetails nicely with our 20-year offtake of U.S. LNG from Venture Global's Plaquemines Phase II. With this alignment, we have secured a long-term downstream destination for our volumes. As we optimize the Jamaica platform, we expect to unlock near-term EBITDA growth by improving asset performance and expanding commercial activity. At the same time, we see a clear path to scale this model across the Caribbean.

Speaker 8

That will require targeted investment to support new infrastructure development, to expand our customer reach, and to deliver on broader commercial objectives. This approach is designed to enhance the value of the assets over time and strengthen the return profile of the broader transaction. By 2030, we expect to generate $80 to $110 million in incremental EBITDA from optimizing the Jamaica platform and investing $200 to $400 million in growth CAPEX to expand our operational presence in Jamaica and across the Caribbean. Now let's talk about how this is going to happen. First, we are focused on optimizing and expanding the Jamaica platform to meet natural gas demand driven not only by fuel switching across the island but also by the need for additional power generation as the Jamaican economy continues to grow.

Speaker 8

Our team is off to a great start identifying ways to increase throughput across existing infrastructure and extract greater value from current commercial agreements. We have already begun to sell incremental volumes of LNG and natural gas to customers on the island, and we expect this early momentum to continue. In the medium to longer term, we will make investments in larger-scale infrastructure projects that support our growth. These opportunities span a diverse range of initiatives, including new power generation, terminal expansions, LNG bunkering, and additional pipelines. The second part of our approach is to position Jamaica as a regional hub for LNG distribution across the Caribbean. Jamaica's geographic location gives us a structural cost advantage. Its proximity to the U.S. and to key regional markets allows us to respond quickly to regional demand, making it an ideal launch point for LNG distribution and power development.

Speaker 8

We are advancing a hub-and-spoke model that leverages our floating LNG terminal in Old Harbor as a central storage and distribution point. From there, we can efficiently deliver LNG throughout the Caribbean using smaller vessels to reduce transportation times and lower fuel costs. We see this as a natural expansion of our downstream operations and an important part of our long-term Caribbean growth strategy. While we are still early in our ownership, we have hit the ground running, and we see clear opportunities to scale the platform efficiently. Now let's turn to Terminal Services. Before we get to the Q2 highlights, I want to underscore the progress we are making in expanding the asset portfolio that supports Terminal Services. We are strengthening our long-term infrastructure footprint and positioning ourselves to capitalize on new developing opportunities in the LNG import terminal space.

Speaker 8

These efforts will enable us to capture a greater share of our total addressable market, particularly in regions where demand for reliable energy infrastructure continues to rise. Now to the highlights. This quarter marked several important milestones. In April, the FSRU Excelsior arrived in Germany at the port of Wilhelmshaven. In late May, the Excelsior officially commenced regasification operations and is regularly delivering gas echelon at maximum capacity. Really pleased with our operations team. In July, we acquired an LNG carrier, which we renamed the Accelerate Shenandoah. While the vessel will support our previously announced mid-term Atlantic Basin supply agreement, its utility extends well beyond that. Shenandoah enhances our ability to serve Jamaica and support regional LNG storage and logistics. The LNG carrier also represents Excelerate's first owned asset to be selected as an FSRU conversion candidate. We have already begun engineering for the conversion to accelerate the construction timeline.

Speaker 8

Next, we signed a deal with Petrobras to install a re-liquefaction unit on the FSRU Experience, our floating LNG terminal located in Guanabara Bay, Brazil. The re-liq unit is expected to be installed in 2027 during the next planned dry dock for the Experience. Once installed, this technology will eliminate all excess LNG losses due to boil-off and lower our Scope 1 emissions. At the same time, it will upgrade the performance and life expectancy of the asset. Finally, we continue to make strong progress on the construction of Hull 3407, our new build FSRU under construction at Hyundai Heavy Industries. The vessel remains on track for delivery in June 2026. Hull 3407 will be a best-in-class asset, capable of delivering up to a billion cubic feet a day of natural gas and also having the lowest rates of boil-off in the industry.

Speaker 8

We remain confident in our ability to place Hull 3407. The vessel's scale, performance, and flexibility position it as a cornerstone asset in our global LNG infrastructure portfolio. We expect to provide further updates on its commercial deployment in the coming quarters. Let's sum it up. Excelerate is executing on a clear growth roadmap that aligns with our long-term strategic priorities. We remain committed to transparency and delivering on the promises we've made. We know this approach will support long-term value creation and position Excelerate as a compelling investment opportunity. I want to thank each of you for your continued support and confidence in Excelerate Energy. With that, I'll turn the call over to Dana.

Speaker 7

Good morning, and thank you for joining us. Before we dive into the numbers, I want to highlight a few important updates to our financial statements that better reflect the structure of our business following the Jamaica acquisition. On our income statement, we've renamed the FSRU and Terminal Services revenue line to Terminal Services, and the gas sales revenue line is now presented as LNG, gas, and power. The associated cost line items have been updated accordingly. Now let's turn to the results for the quarter. Q2 was a great quarter for Excelerate, with adjusted EBITDA of $107 million. Adjusted EBITDA increased roughly $7 million quarter over quarter, driven primarily by the addition of Jamaica EBITDA for a partial quarter starting on May 14 when we closed the acquisition.

Speaker 7

This increase from Jamaica was partially offset by the seasonal impact of the Atlantic Basin winter cargo margin, which occurred in the first quarter of this year, but not in the second quarter, and the timing of various vessel operating expenses, which were higher in the second quarter as compared to the first quarter. Year over year, adjusted EBITDA grew by $18 million, driven both by the addition of the Jamaica EBITDA and the strength of our legacy business. Now let's turn to our balance sheet. Our balance sheet remains strong and continues to provide the stability and flexibility needed to execute on our long-term strategy and navigate dynamic market conditions. As of June 30, our total debt, including financed leases, was $1.3 billion, and we had $426 million of cash and cash equivalents on hand.

Speaker 7

Additionally, all of the $500 million of undrawn capacity under our revolver was available for additional borrowings. Net debt was $867 million, and our trailing 12-month net leverage as of June 30 stood at 2.2 times. Our financial strength is rooted in the durability and predictability of our business model, with over 90% of our adjusted EBITDA supported by taker-pay contracts. This structure gives us a high degree of visibility into future cash flow, supports disciplined capital allocation, and enables us to invest confidently in growth while returning capital to our shareholders. Now let's turn to capital allocation. Our capital allocation strategy remains unchanged. Investing in accretive growth opportunities remains our top priority. We're actively deploying capital into growth projects like our new build FSRU Hull 3407, which remains on track and on budget. We're also targeting additional infrastructure investments across our asset footprint that support long-term value creation.

Speaker 7

At the same time, we recognize the importance of returning capital to shareholders. That's why on July 31, we announced an increase to our quarterly dividend. Raising the dividend is a direct reflection of our enhanced cash flow profile from the Jamaica acquisition. It's a signal of confidence in the cash flows of both the newly acquired Jamaica assets as well as our legacy business. Looking ahead with even greater confidence in our forward cash flow outlook, we are now targeting an annual dividend growth rate in the low double digits, commencing in 2026 and continuing through 2028. Of course, all dividend decisions remain subject to board discretion and the pace of future growth investments. We believe this balanced approach of investing in growth while returning capital will create long-term value for our shareholders.

Speaker 7

As previously communicated on July 29, following the closing of the Jamaica acquisition and based on our second quarter results, we have raised our adjusted EBITDA guidance range for 2025. For the full year, adjusted EBITDA is expected to range between $420 million and $440 million. As a reminder, our adjusted EBITDA guidance continues to include the financial impacts of the two dry docks planned for the third and fourth quarters of this year. Maintenance CAPEX has increased slightly and is now expected to range between $65 million and $75 million. Committed growth capital, which is defined as capital that has been contractually committed or internally approved for specific growth projects, is now expected to range between $95 million and $105 million. This represents an increase of $30 million from our prior guidance, the majority of which is related to the purchase of our new LNG carrier.

Speaker 7

In closing, Excelerate is exceptionally well-positioned to create long-term value for our shareholders. We've integrated the Jamaica platform, and it's already contributing meaningfully to our financial performance. We're executing with discipline, and we will continue investing in growth opportunities that will enhance our long-term earnings power while returning capital to shareholders. We believe this combination, operational strength, financial discipline, and a clear focus on shareholder returns, positions Excelerate to thrive and lead in the evolving global energy landscape. Thank you, and with that, we will now open up the call for Q&A.

Speaker 6

Thank you. We will now start today's Q&A session. If you would like to ask a question, please press * followed by 1 on your telephone keypad, and if you wish to withdraw your question, then it is * followed by 2. Our first question today comes from Wade Suki from Capital One Securities. Your line is now open. Please go ahead.

Speaker 6

Great. Thank you, operator, and thank you all for taking my question. I'm just wondering if you might be able to maybe give us a better sense of your priorities for Jamaica projects, timing-wise, the nature of the projects. If you could sort of help us kind of segregating them for near to intermediate-term projects versus some of the long-term projects. I think you were talking about $80 to $110 million in EBITDA by 2030. I'll go ahead and expand on that question and see what you think might be the contribution next year. If you're willing to go out further to 2027, I'm sure everyone would love to hear it. Thank you.

Speaker 1

Thanks, Wade. This is Oliver. I'll take this question. I think we put out there the guidance through 2030 on our expectations for the Jamaica and Caribbean platform. Obviously, that encompasses a wide range of opportunities that we see out there. What I can probably say here today, just to give you a sense of how we're looking at it, is, with the assets that we purchased in Jamaica, we've talked about the platform. It gives us a platform on which to grow. Those assets, some of them, there are opportunities to directly use those assets, optimize those assets, and get near-term EBITDA growth, which doesn't necessarily require significant additional CAPEX. That's getting new LNG or gas customers on the island or using those assets to reach other customers in the region. Some of those are probably a little bit more near-term in nature, we would like to think.

Speaker 1

There are the opportunities that will require more CAPEX. Those are sort of growth opportunities on the island. Certainly, new power generation is likely to be on the higher end of the CAPEX, as well as some other infrastructure opportunities we're looking at there, as well as in the broader region. There's that split there. I think we don't want to get into specific details exactly on the different opportunities. You've had these assets now for a few months. We're extremely confident on the platform and the ability of the platform to capture new demand and grow from there. As Steven mentioned, we've already had some additional sales since we've acquired the platform. There's a number of discussions, and we've had a really positive reaction both in Jamaica and in the broader region of this. We're really excited about what's coming from these assets.

Speaker 1

Great. Thanks, Oliver. I appreciate that. Maybe I'll push it a little bit more here. Maybe I could ask if you could expand on some of these opportunities in the Caribbean, maybe speak to specific markets that are of interest or where you're seeing the best opportunities to the extent you feel comfortable doing that. That'd be great. Thank you.

Speaker 1

Sure. I mean, I think, obviously, you've seen a little bit from the Jamaica assets. You've seen what we've touched in Jamaica. In many ways, as you look at some of the other islands in the Caribbean, there are similar fundamentals. Where Jamaica is today is perhaps where some of these markets want to be themselves in a few years. As you look at the Caribbean, a lot of these islands in the Caribbean are still burning liquid fuels, whether it's diesel or HFO, in power generation. The opportunity for fuel switching is there. That's where we believe that with our assets, you have that launchpad in Jamaica to be a hub for the broader region. I'd say a lot of it is coming from power generation in the broader region. We're also looking at bunkering, and I think Steven mentioned that too.

Speaker 1

The growth of bunkering globally is, I think, that there are some very bullish estimates out there about global demand for LNG for bunkering over the next five-plus years. We see Jamaica in a great position both in terms of receiving supply from the U.S. for LNG bunkering, but also in terms of proximity to some main shipping lines to which you could provide those services. Hopefully, that gives a little flavor on some of those different opportunities there.

Speaker 1

Thanks, Oliver. I appreciate it. I'll jump back in the queue.

Speaker 6

Our next question comes from Theresa Chen from Barclays. Your line is now open. Please proceed.

Speaker 6

Thank you. Oliver, I wanted to follow up on your comments about the opportunity for fuel switching in the Caribbean. Have you been able to quantify the addressable untapped market for gas here? What can you realistically target?

Speaker 1

I think there is, you know, again, in the Caribbean and the region, significant demand. I don't think I have a number to put out there today. The majority of the islands in the Caribbean are currently burning, you know, liquid fuels for power generation. We see this as a market with healthy margins. As you go down the value chain on the LNG, there are few people who can truly offer these services. I think our view is that with these assets in Jamaica, we're able to offer a service and at a cost that I think others will have a competitive advantage there. We see it as a big market from which we can grow.

Speaker 1

Thank you. Turning to a different component within your portfolio, 2025 has clearly been a banner year for U.S. LNG on multiple fronts. I realize you will likely have more details about Hull 3407's commercialization progress as things become more concrete. Can you give us a sense of how discussions are going in general and your view of the supply and demand outlook for new builds like 3407, especially at that caliber?

Speaker 8

Theresa and Steven, I'll jump in. I said just a few minutes ago that that asset's best-in-class BCF, and more importantly, likely the fact that it's got the lowest boil-off in the industry. The asset class is incredibly tight right now, will remain tight, and that's largely why you're hearing the confidence. I don't want to go into the discussions and negotiations that Oliver's team are having around the world, but they are active and there is demand. We've talked, all of us know that, as I said, what's good for U.S. LNG is good for Excelerate. That is in part because that means more FIDs. That means an expanding global supply of this commodity that is already in the money for fuel switching, but which will be kind of ever more in the money for these markets that are examining them.

Speaker 8

You have, if you put it all together, an enormous TAM, a tight infrastructure market, and a price point that will be ever-increasing demand for further access. We think we're well-positioned when you take all three of that together.

Speaker 8

Thank you so much.

Speaker 6

Our next question today comes from Chris Robertson from Deutsche Bank. Your line's now open. Please go ahead.

Speaker 5

Thank you, operator, and hi, everyone. Thank you for taking my questions. Just on the FSRU conversion project, Steven, can you remind us, I guess, the timeline around that, when you expect to initiate the conversion? If you were to compare, like on an apples-to-apples basis, a similarly sized new building project, what are the cost savings associated with a conversion asset vs. a new build asset?

Speaker 8

Hey, Chris. I'm going to hand it over to David because his team is in the weeds on the engineering for it, and then I'll let him compare apples and oranges for you.

Speaker 5

Hey, Chris. David here. Got it. Thank you. Yeah. We've got actually multiple conversions. David. Hey, how are you, Chris? We've got multiple conversion projects underway right now. Both the ones I'll speak to are in the engineering phase. Earlier this year, I spoke about one opportunity that we're pursuing, one specific vessel that we're working with a prospective partner on. That engineering, the original or initial engineering, has already wrapped up, and we're continuing to work with that partner to move that project forward. We're already well on our way with that one. Now that we have Accelerate Shenandoah in our ownership, we are starting the conversion engineering for her. Before we've said it's roughly two years to bring an asset like that to the market, that's about right, but we would like to think that we can compress that.

Speaker 5

We have quite a bit of equipment already in storage that we can use for that conversion that we hope is going to compress the timeline. Those two projects are well on their way. In terms of cost savings that you asked about vs. a new build, they're different animals very much. A new build is going to be generally a higher capacity, more flexible asset. When you get into a conversion, it's usually not as high capacity, so you aren't putting as much equipment and as much engineering into the conversion as you do for a new build. There's some savings there. Usually, it's more bespoke for a specific project, and it doesn't have that flexibility of a new build. There's some savings there too. I hope that gives you a sense for some of the savings. Sure. Yeah, I appreciate that. Thank you, David.

Speaker 5

Just going back to the Jamaica assets for a minute, I wanted to ask around your expectations on incremental CAPEX related to building the smaller receiving terminals in the kind of the hub-and-spoke model that you've talked about. Just kind of comparing it to the Montego Bay receiving terminal, for example, what would the cost expectations be around smaller receiving terminals for the shuttle tankers?

Speaker 1

Hey, Chris. I'm Oliver here. I'll take that one. I think we, again, we put out a range. I think the range covered a number of assets that we saw. It had obviously some power generation. It did have some smaller terminals in there. I don't think we'll be giving an exact range on those terminals. It's early days. We're assessing some of these projects. I think it's also, you know, there's many different markets, many different sizes. There's also many different solutions that we can look at. Obviously, Montego Bay, as you look at it, is something that can be scaled up or scaled down. As you look at that asset as how it could work somewhere else, it's also something that we could use also as a platform for the further Caribbean.

Speaker 1

I think we'll be looking to have some, obviously, commonality across assets, but also be flexible to ensure that we deliver the customer what they're looking for.

Speaker 5

Got it. Okay. Last question from my end, if I might get a third one in here. Just looking at the balance sheet, this might be a question for Dana. Looks like as part of the transaction, we have some intangible assets here on the balance sheet. Just wondering if you could walk through some of the aspects on that from the transaction.

Speaker 7

Yeah, that's detailed in our Q, which I think has been filed as of this morning. It's customer contracts, and that's really the bulk of what's in that intangibles.

Speaker 5

Okay. Got it. Thank you very much. I'll turn it over.

Speaker 6

Our next question today comes from Jeremy Tunnett from J.P. Morgan. Your line's now open. Please go ahead.

Speaker 6

Hey, this is Eli on for Jeremy. I appreciate there's been a lot of color shared today on the Jamaica platform and the work that's ongoing there. If we just think about specific milestones that we should keep an eye out for both operationally and financially, whether we can expect updates on those this year, and if you can just share color on the first key milestones you guys expect to hit and what that would do for Excelerate Energy both operationally and financially. Thanks.

Speaker 8

Hey, Eli. This is Steven. Just touch on it in general. I mean, we're going to continue to be as transparent as I believe we've been today. I assure you we will continue to give as much color as we can. Just as today we told you, hey, we're already making incremental sales of LNG and natural gas through the platform, right off the bat. We will continue to update you on those incremental paths. In terms of optimizing, we've already ordered ISOs. We're buying trucks. We're buying other vaporizers. We've already hit the ground running and doing some of these smaller investments that will allow for immediate optimization. That will continue. Obviously, when we hit a suitable contractual milestone on something where we're going to deploy a little more capital than that, I assure you you'll be the first to know.

Speaker 8

All of you will be the first to know.

Speaker 8

Okay. Gotcha. Thanks for that color. Maybe if we just touch on the LNG supply side to support some of this targeted growth across your asset portfolio. I know the Venture Global agreement provides key supply in the Caribbean, but how much kind of incremental supply do you guys need to execute on this targeted growth? How should we think about kind of agreements going forward to support that?

Speaker 1

Hey, Eli. This is Oliver. I'll take this one. Obviously, we've mentioned that the VG volume works well. The 20-year VG offtake works well with our profile in Jamaica. The VG volume itself is a little larger offtake than we have the current demand. Obviously, there's room for some growth there. As the platform grows in Jamaica and the Caribbean, we'll be looking for incremental supply to match that. We feel with Jamaica and the Caribbean, the proximity to the U.S., the U.S. LNG that's coming on starting this year going forward, I think that's a really good mixture and sets us up really well to be able to access that incremental LNG as that demand comes from the customers. I think it's something we can work pretty much hand in hand as that comes on.

Speaker 1

Got it. That's helpful. Thanks.

Speaker 6

Our next question comes from Michael Ciala from Stephens. Your line's now open. Please go ahead.

Speaker 6

Good morning. I wanted to see, given the incremental growth you're expecting from Jamaica, the EBITDA growth, if there's been any change in thinking on how you might finance the Hull 3407. I think in the past, you've been leaning towards some external financing. I want to see if there's been any change in thinking there.

Speaker 7

Hey, Marcus. Dana. We're still evaluating that. As you know, we raised $800 million of debt from the bond market a couple of months ago, and we are continuing to evaluate that. As you can see from our balance sheet, we still have a very healthy balance sheet. We have over $400 million of cash on hand, unrestricted cash. We have $500 million of borrowing capacity on our revolver. We're in a very good position to finance that roughly $200 million, which is going to be due in a little under a year, June 2026. It could be revolver borrowing issues. It could be some of our cash or a combination of cash and debt. We're still working on potential ECA financing, or it could be some sort of bond upside, but we haven't decided yet. I'll just say that there's no issue there.

Speaker 7

If we wanted to use cash and more revolver capacity, we could easily do that.

Speaker 7

Okay. Good. Looking at the purchase of the LNG carrier, the Accelerate Shenandoah, it looks like you were kind of on the low end or maybe even a little bit below the low end of what you had previously talked about for a purchase price. Just wondering, could you speak to, you know, did you have to sacrifice anything in terms of the quality or size of the vessel that you were looking for there?

Speaker 5

Hey, Michael. This is David. I can take that one. Yeah, we were really happy with the Accelerate Shenandoah. We took her immediately after her dry docking. For folks unfamiliar, at a dry docking, which happens roughly every five years, you're renewing or rebuilding all the major equipment. When we took her, when we took ownership, she's in great condition, got a great price on her. We're really happy about it, and she's already on her way over into the Atlantic. We didn't have to compromise anything. Not at all. We're happy. She's a great candidate for conversion, and she's going to serve those Atlantic-basin volumes very well until we need to pull her over for whatever conversion we have.

Speaker 5

Thank you very much.

Speaker 6

Our next question comes from Zach Vannevern from TPH. Your line's now open. Please proceed.

Speaker 6

Hi, all. Thanks for taking my question. Maybe going back to the new LNG carrier, you know, I know you mentioned this is going to help with the mid-term Atlantic Basin supply deal. I believe that deal was already in motion. Will there be any cost savings using your own vessel or any upside to that contract that we can look for?

Speaker 7

Hey, Zach. It's Dana. Yeah, we, I mean, obviously, buying this vessel, there's an upside to our returns. It's cheaper to own a vessel than to charter a vessel for this contract. You will see enhanced returns. We don't release what those returns are, but we are delivering a new cargo, our summer cargo in the third quarter of this year. We do expect to have more accretive returns on that project than in the past because of that ownership of that vessel.

Speaker 7

Got it. That makes sense. Maybe one more on Jamaica. The $80 to $110 million EBITDA, I know you're still in the works of kind of planning all of that out and how that will look, but can you break out maybe at a high level what portion of that is synergies on the existing assets vs., you know, new build or, you know, CAPEX going into other Caribbean islands? Just kind of an idea of how much of that is original deal synergies vs. new EBITDA from other opportunities.

Speaker 1

Yeah. Hey, Zach. This is Oliver. I think all of these opportunities, the Jamaica platform gives us access to all these new opportunities. I think that's part of the reason why we were comfortable giving some of this guidance today because there are opportunities that, without Jamaica, on these other islands, we didn't think we could be competitive or have a sort of right to win on those. As I mentioned earlier, it's not an insignificant portion of things, optimizing the assets we have and growing from there with minimal CAPEX. Others, while they will likely use the assets we have in Jamaica, will require further CAPEX for that project. There's a split there. I wouldn't want to get pinned to specific numbers on that, but that's a little bit how we are looking at it.

Speaker 1

Gotcha. That makes sense. I appreciate your time. Thanks, everyone.

Speaker 6

As a reminder, if you would like to ask a question today, please press * followed by 1 on your telephone keypad. To withdraw your question, it's * followed by 2. Our next question comes from the line of Bobby Brooks from Northland Capital. Your line is now open. Please go ahead.

Speaker 6

Hey, good morning, team. Thank you for taking the question. The Caribbean growth plan, very intriguing, but I just wanted to make sure I'm thinking about it right with the hub-and-spoke model. Would you be buying a vessel that would then move the LNG from the Jamaican hub to other islands, or would it be countries you make agreements with, make their own arrangements to move the LNG, or maybe something of a combination of both? Just curious on that.

Speaker 1

Hey, Bobby. It's Oliver again. I think, I mean, today we have a small-scale vessel that we use to just shuttle from within Jamaica from our Old Harbor LNG terminal up to the Montego Bay LNG terminal. As we look at other opportunities on other islands in the Caribbean, it's early stages. It's discussions with the customers. It's understanding what they want, what we can give to them. I'd say as a general statement, they want the delivered LNG, the delivered gas solution. We are looking to expand the asset base that we have to bring those solutions to the customers. That would mean new vessels, new onshore assets on other islands to deliver those solutions. It could be quite a wide range, but yeah, we're pretty excited about that growth there.

Speaker 1

Super helpful. Thank you for that. I just think more broadly, a lot of focus today, obviously, on the Eastern Hemisphere of the business, but I know your vision for growth goes far, obviously, expands globally. I'm just curious to hear any updates, general updates on developments within Europe or Asia, you know, maybe specifically Vietnam, as I know we've talked about that more specifically before. Thank you.

Speaker 8

Hey, Bobby. It's Steven. I'll take that one because you've probably seen photos of me around the world. That is because we are a global company. We want to spend some time today on the Caribbean and this area near to the United States just because it was a significant investment. We're excited about that. We're excited about this platform. We think it's going to give us the ability to chop some predictable wood in the neighborhood. A lot of thirst for U.S. LNG in the neighborhood, and we're excited about that. Our confidence comes from the fact that we are a global energy company, and we do care about those markets. We do care about all of that TAM. I'll touch on a couple of points. I am excited. I mentioned it in passing as a proof point, but I think the EU and U.S.

Speaker 8

deals, anything that's going to have more U.S. LNG flowing into Europe is good. I'm pleased that FSRU Excelsior is regularly delivering at max send-out into Germany. You know, we are an important part of the mix. Europe is an important market. I think we've talked in the past about Germany and Germany adding gas-fired power and the resilience that they have and need. I think it's a cornerstone. We expect to be in Europe for a long time. Let me pivot to the other side of the world, Vietnam, since you mentioned it. How can you not be interested in a market that is the people widely expect to be 20 gigawatts of gas to power generation? I mean, how can you not be excited about Vietnam? I'm excited about Vietnam.

Speaker 8

I was over and met with the Prime Minister of Vietnam, in late May or June, and we continue to engage with Vietnam. What I would say there is, I think what I told folks on this call back in May, we have two MOUs with Petro Vietnam or with subsidiaries of Petro Vietnam. We continue to engage with Petro Vietnam. We are willing to make significant investments in Vietnam. We want to be part of the solution for Vietnam. We want to aid with the prosperity of that country. The best way to do that is to continue to build and prove oneself with significant actors and national champions like Petro Vietnam. We continue to do that. Basically, I would say we're wanting to give everyone on this call some detail about the Caribbean and what our intentions are there. We are a global company.

Speaker 8

We're bringing that global expertise to this platform just as we do to everywhere else. We are a critical part of the LNG value chain. I expect for folks to sit up and take notice that we are the important part downstream that are going to help make all of this happen.

Speaker 8

I really appreciate it and agree with your thoughts there, Steven. I'll return to the queue.

Speaker 6

Thank you. With that, we have no further questions in the queue at this time. That concludes the Q&A portion of today's call. I'll hand back over to Steven Kobos, CEO, for some closing comments.

Speaker 8

Thank you all for joining us today. We appreciate your continued support and engagement as we execute on our strategy and deliver long-term value. We're going to look forward to updating all of you on our progress and seeing many of you on the road in the months ahead. Thank you.

Speaker 6

That concludes today's call. You may now disconnect your line.

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