NFE - Earnings call transcript Q2 2020 | New Fortress Energy Inc.

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the New Fortress Energy LLC Second Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised that today's conference is being recorded. Instructions]. [Operator like conference now speaker to hand Mr. today, to would over the your I of Investor Head Andreini, Alan Relations. go please Sir, ahead.

Alan Andreini

LLC Earnings Thank you, to Energy you welcome all Quarter Michelle. I would the like New Call. to of Second XXXX Fortress

going Joining Brannen Chairman Guinta, the and our of our Chief our today Development me Financial Abdalla, Board; Officer; Mexico the who to who are leads the leads Zero, new call, here and we was projects; Chief Throughout Edens, CEO are Wes our that New Jake McElmurray, Suski; supplement Chris Nicaragua the Fortress Officer; Sam reference website. hydrogen earnings and our to division. posted Energy

have now. you already not I'd so, download you suggest it that If done

call directly reconciliations the today. measures to In earnings GAAP in comparable those The non-GAAP we addition, be the discussing of most will can supplement. some the be measures found during financial measures

the you factors turn We earnings. are quarterly certain may filed I like that in I Wes, out forward-looking materially uncertain statements, Before regarding point forward-looking regarding today over to their with from and actual nature SEC. call and our the be differ financial statements by encourage and our investor results. the presentation review press non-GAAP review to statements contained including measures made would to statements in and to will risk release These future disclaimers the report

Now, I would like call Wes. to turn to the over

Wesley Edens

in thanks, dialing everyone, early And Alan. for a Thanks, on Great. Monday.

straightforward of up do at so end. hopefully said, and to of all a front the questions that pretty have you Alan supplement we put As going you for manner. online course, that to we're the through then, flip try open And in in

number four. start let's So, on page

ways which been as for is quarter. in to highlighted hope highlights in on actually sold a in we last an many. full but challenging we situation business, transitional during company There ways the has company developed four-and-a-half speak there. quarter operating that by themselves. couldn't volumes July us months a So, The Juan, development from in also two commissioned for. run the the actually we rewarding that This rate then, since that expected, possibly operating July. the the COVID never the project In quarter, went of XX, results down it Record are had in for was completed San on volumes turbines for the were and

So, create very asset. and Pipeline for us I'll than that responded of that greatly we company simplify through we through I'll reduces one. had and corporate one the undertook the future million and growth for number to convert lastly, by And to prospects that into become those actually to, prospect of we're business have and has of go were expands positively meant the think detail the the been. million that we actions for a is new for I gallons endeavored time the an our customers more go the operating logistics solution our second. a quarter We a X.X in to day. ever robust X remainder to that it

shows to I let's overly is a and This which simply get dense are. flip presentation the So, number violates page differences to see. chart five. portfolio. But the volumes of to the we've my rules of every hard couple page across This day, circles a what being that and created highlight try

that the as burning volumes. in We'll relates which relates Jamalco comes kind in last that's XX hand project on online have gas to which run The also of really see you'll to is the of overall expensive side circle we August step boilers have one in You The Rico. company. is the of incremental on the see rate significant is get XX. hit next more that those volumes the can we our margin off a that when right we Puerto July up what

on page what Obviously, so, from that And it to make column million down, $XXX see margins you'll many look bulk operating When a If we to of I handful me course, there that columns our of this significant more follow about throughout chart, for are million rest go assets assets to goal as at exist. speaks our a volumes long-term then the that margin steps profits considerably. just company. of right-hand of $XXX the the that operating is is far the up up course this year. of of have

As of both of diversify increase when to get the as at going about the we're you this page, history, it per at day to only assets, X.X is million the The more and of million net is, end increase value nature year. company's gallons look now. operating That's the by portfolio as more we to we in well we by averaging close the the as going substantially. X.X geographics as

and a in get list come Before the right behind that. projects of in long, in that are long then we online. of two Then, that Nicaragua Mexico development projects now course, there's

So, page over quarter, this major X. go Five next through each one them last pages. the of corporate one I'll and actions by couple

going with now that operating and far. from transparent, happy simplistic to create us of an has were the very shareholder-friendly to worked can. a company, step how thus an we effort being each most the development them I'm company them of out of investor-friendly, All take for company

number Let's flip to page seven.

was which B of an one, Class to as one easy basically shares. A converting all Class myself is done as shares well First Randy our are

creates basically in shares across class number investors exactly the simply prior held to have This LLC as shares XXX the same for have of an investment. one million increases so. Greatly available rights All that shares the shares. total. doing are our company. We of

increased their due day. a Average increased were positions holders XXX,XXX to Top of increased by percentage conversion. float volumes float. by shareholders restrictions XX% prospects so, on this since Some capped shares internal dramatically. free free the trading Doing

we number disproportionate still shares obviously, since haven't we of issued hold shares and any internally, a the IPO. Now,

week, float increase we is only have. which thing, free very issue we we the to time, of As C LLC a simple Over basically This convert company the a that companies last are corporations. all to that'll and over are equity an two. C was Number did corporation. in volumes will, we indexes which to the XX% add from inevitably, trading included and the

trillion thing to Index is passive assets. funds over in So, do. represent $X.X this a simple and

LNG a in the with had inclusion number contracted We Page couple expect indexes whereby of should increase cargoes a these a something did eight investor those was It contracts. year, the buy quarters. base. value. Again, them. of next simply remainder We our of obligation that of to the shareholder buy of expands a number transaction at of end number through to contracts. quarter cancelled over negotiated X, we counterparty the the the we What

strike was a that prices the we And those before couple were a allowed of those reasons. And think higher down. it a now, of end what paid at to done spot come market the We then $X.XX. basis. we replace cargoes that of buy is, them that half consummated it transaction premium of of half beneficial for the Now, us a does is One had and is that September. at on transaction million, $XXX of basically the go

than cents, us. that are a benefit economic simple we So, to $X.XX able cargoes the to buy extent it's terms, positive in cheaper for

We the that six are with to cargoes have we two bought in go. subsequently of shorts eight more

The $X.XX. first in at bought two were $X.XX and

gas cheaper. with But roughly little gas. bit able the of binding goal were more you to meet it a what it we So, replace basically does $X.XX is then importantly, $X

your way true basis potential to so, present actually it. go margins And reflects of It right on operating company. substantially. the a the It's operating current up the

still simple very, tune we of million $XXX did transaction. of beneficial would replaced to to exactly cancel to pay than that is terms, be the $XX it at we the very level, in contracts if have So, a been us that to Net expect other them positive nothing million. very to it and million $XX the it

does result, of operating present that terrific. but do it as also us make So, bit for a is we an little a really money profile

Now, be And our and the a of true. these should months, better this a we assets that. company months true fact got that and asked a with operating went got much B+ in Friday we which what is XX a on We and comment result. as X is that of subsequent history both process. times. we to the very That'll from X our so Basically, single-B we both quite this on less been is new, is I've Thursday now. them. of from be as some for we Moody's. many S&P months, than cases, through from facility to But is on rating did rating BAX, our existing ratings In rating that agencies plus, believe

or believe is beginning of both if the the that company. so, which consistent, our of and hold this And operating the same improve, long are think a we history upgrade the for we operating is term likely, metrics

that to that lower is we terms is translates facilities grade What process begin just of into, to Our have. debt company. the goal investment an be the obviously, interest rated in rates

investment $X there's to debt had billion. about rating, eventually, grade we by is to a overall in We we what material save money. savings that total. get of X.X%, And of if it debt amount X.X% be material about a Overall very, to of is Our were amount simply cost refinancing is a can today. obviously, very believe

of opportunities a dividend on our invest. that of XX% be would X, your based has, to think so have. now flow, the need the of years has our very there's Talked seem not of talk we to our great that two amount you profile odd capital XX% consider that is our perhaps to is When it we a about a and Not still capital still believe when because company high so may cash progress considering board right a growth one a lot in flow, significant now prospects So, year to a cash opportunities in cash work of to world, action the the will but dividend about but thing it. a that generate business, the so modest the do. believe more significantly is we dividend. from page that the retain generate company of productive amount would cash is than you because last grow we on from to it I flow the number opportunities a or to

flow that about look translate $X.XX us. of refinancing at free XX% next a XX% something become prospects material will would to the we into company, the cash today As a is this share. our XX for financing over prospect and for months

we if did So, call something it representative a just $X.XX like a share what this. pursue quarter, be as dimensions per the of would

come to two, that. more would for The So, path then, address out with number go the ratings in sort options hand. our financing us, be, number on this. one, And we'll

before lastly, shows from up others, this The steep to performance, the Brannen these and chart terms all right a of that operating turn side left actions, hand we're I transition actually plus an startup in now of to our over going the operational completes company. flows. So, ramp operating the through cash

that into what side, growing $XXX we've go hand $XXX on, for I'll pipeline this of is going got much a million good growth numbers and that far. right translates thus stuff to this the the of the some in of accomplished believe EBITDA, are through million. of kind much, illustration we've prospects but EBITDA higher, I On

a very Brannen? So, quarter. good

Brannen McElmurray

Thank and on since for what all to you, we've We're last you you excited we update Good accomplished us. morning spoke. joining Wes. thank

Moving committed rate volumes to at operational facilities. our XX, run across page

at facilities. operational are run report rate proud across to volumes our that are our We committed

major As transition company. noted, facility Rico, our up completed day. San now rate Wes of from our X.X operating totaling volumes, a have to with gallons in the have Each an run hit excess of four in assets our million Puerto startup per ramping Juan we operating

fact, expect as to next a begin XXX,XXX taking total. much hours, day In we the XX gallons adding the as to our Jamalco gas in boilers

to capacity serve of each customers. these facilities additional has in Importantly, built

started on-island looking behind industrial LNG week Puerto an fence serve the loading last solutions. to As tankers we example, Rico in power for generation

adding looking demand ones. expand for expect constantly that existing customers optimize We're and to to grow and for service significantly volumes our assets to the We over by ways increasing service new coming months.

provider. in We have infrastructure periods, shown as critical adding the deliver reputation can infrastructure customers further our go-to critical most our to we that a

operate. our countries Moving a to we page XX, operational health is of asset as safety and in the is which people The a good welfare of performance. the top priority, in steward environment being and

you most the focus one on results. in Our deliver because we on continue probably important look operational every proud zero our spills, a I every recordables the and company page is at as from operations teams that's is day terrific work, to and would day. We've zero Zero the that prioritize days away and had we number. extremely something of zero team single

availability and customers. continue exceed numbers reliability Our of our to that

are our executed and to customers assets date expected, XX% year-to-date loads and is We've in XXX truck rail short, critical tender on without at performing reliability, better So, LNG X,XXX to or all incident, average which serve. that a we SPS transfers, over to and over availability team. testament our than

to the new be must leader ship company any transfers of for most and customers the to advantage excellence to win clubhouse a have Hemisphere. ship conducting a is We to by the continue business. in our ship competitive shore and Western Operational

team the new to we about projects. deliver to I'll the talk way it Now, back and turn innovations over

Wesley Edens

Abdalla just a projects here, flip our Great, XX. I'll have thanks. but in Sam page development walk second to through

on couple the a just as our operating cartoons couple spend Let's company reflects pages. of the how represent of business operates the our an Basically, today. cartoons minutes and in next history

huge So, ships. the efficient These cargo of that really the And XX can really to ships, large the meters, XX world meters too meters LNG to around so. large long, in XX high, not the way most are do world, XXX very a accommodated ships ships the be wide. ships, LNG simply ships meters ship huge, There's harbors. big are but around large very

and those up company ships is very types The ports still to our one. a simplistic seems and innovation LNG ships which first smaller then quite large, take ships, bring went in exponentially, was bring was. into it that we like a that their customers. It those service of to these port And to that offload terrific. assets indeed, had fill as big the are up simply So,

ship As to have hundreds without transfers we Brannen managed to said, incident. actually and hundreds do of ship

need the I'd should safe way so. The it's that, ship, then to what really hear words the is be to it challenges like extended then a it's water, be a But So, infrastructure, have you When you it shore. hear up even to – development. on an faster you develop to XX to something have infrastructure marine order you smaller very obviously going you once period that. of bring the to marine months. still reality doing on filled need in is than anytime XX do of you

of focused we pursue. in the going And the terms cut be meaningful so, down what are we actually very the that you cost XX, on is how and difference ahead significant think step making flip to page we of can so. a have projects And we is doing to time that us to we

team's actually idea, talked to that idea in really done a about very We that It couple basically this work simply what have projects it. and very, have done look ago, looked doing on believe really at solution. current at ship. just this this years again, the a out is was we've the Sam And our his a about. and And we good talk context I'll cut it we is of of have the subsequently

on moving a so So, cargo, the what ships gallons, ship. gallons XX divide big doing for gallons we XX,XXX that cubic containers. for you of XX you're four XXX,XXX of gas take be by million really would – gas of that meters example, gallon And into is use, million

There's from in X.X ship take form the into containers to world truck a transportation directly the the over very, containers and So, very the rail. themselves. that million put very and ISO a very It's by ISO by simply a efficient of to prevalent allows this it exist very, today. that move you big manifold takes gas it around both

then that ships. is in And every filling taking so, smaller on big of et simply cargoes number the up ISO what barge, OSB, we're off virtually you doing world port, cartoon can in cetera, containers port of in bring a this take into ship, a vessel, vessel the a

it. months because most half, world And it one costs again, lastly, out cut of then out out XX by is taking down costs to expanded the by have it. can X the in and taking so, cut more. is half of And the ship we've do operating We've X the or cut places And cut by more number than by out, of of capital we ship ship what of the we've from months. we importantly, have you time done it to the we've greatly the

projects And we're right turn first big something So, developing over it. innovation we're Sam? our and us at that, it a this now to that is I'll Sam. deploy to going for with with

Sam Abdalla

you, delivery Nicaragua, the cost we those And we and to important really good on method can down, as the proof turn this of a It's and Wes. two schedule Thank also as year. Wes morning, concept standardize of so It's said. to have project, Mexico drive projects, our everyone. great will

on each So, of a of little update the projects. bit

[ph] a will beginning confirmed allowed So, was the Mexico, generation power ship of scope XX. awarded we and construction. This start the That schedule, dredging for According to completed October. we the surveys to weeks ago complete. this units be bulkhead by repair did last December dosimetry and will and is us few week terminal

with We the are vendors currently finalizing available. negotiations the the who equipment contracts and have

and for Nicaragua year. filed to the permitted expect critical be Moving to this end September have by permits fully all projects, we of

We completion of this of the you. concept Thank construction to package target end design August also year. award by the planning date end completed and and

Wesley Edens

Thanks, Sam.

page the to new section business XX. Looking on

Central areas our for first Focus go we later have are robust South us, serious FID to to to XX in as pipeline. the least projects very and Asia as very, in projects think. Over this a of that expect But FID are terms goal particular, America. many negotiations. and two we end in We these do to get The the in eight, pipeline. our is between now There's potential in year. year. of on get the a simple projects

what math then. is it just the number it's of would terms to substantial. business As generalize numbers in of in easier the you mean We've flip of talk because, course, to actually simple that page project terms of tried different. XX, to is very Each

and margin For million, illustration power, megawatts of million purposes, and project $XXX between said million following, the cost operating between million. XXX we $XXX assume total $XXX $XXX

So, would roughly for amount is company. double the million in $XXX in roughly which generate terms, margin would of of simple of margin. deals of our our have we've this. $X.X space company in And the size margin Eight us, transactions billion four we in the be tripled

So, themselves. the lot I competitive These there's into on And projects of of situations. a detail not to a going that the go obviously, different around lot want terms in are world.

we're I is the remotely. with COVID these to it able that think communication amount in have though, extraordinary, of people times,

So, something half helpful. for feel across made obviously, one like this so. in is And of I the yet, be significant a to productive in pipeline, that very second side, the we've hands-on the – doing this a We've interaction new is advances and business very been is going curtailed quite year us.

the if that XX that the gas. past threat been to section over versus months at a the This are of did for just here for customer tremendous a shows proposition time, diesel of talk delivered few let's shows the next chart years, biggest we're people. that we delivered look and put opportunity that is the the business. front XX% in value you you gas simply offering it I both Gas has our of over and The So, the is cheaper. products And one biggest ago. prices you about gas

XX%. over So,

overall last LNG oversupplied. Gas last years of have all the XX years. higher So gases five very come cheaper. in prices over the XX average. days gas delivered down US are but XX% than the inventories still markets year XX% couple

going rig situation which go is going at But now. activity has point. good are down, to think a is Gas mitigant where effectively With drilling So, which we the we some right gas to precipitously. supply declined a to down. will sure, gas one there's be activity other be is that

If XX. and priority It's in you in from one It drilling in on demand. XX depressed This on. term. math simply to number the need X in we that customer activity bought gas I'm XX a us cargoes rebound. now, forecast out satisfy and We do our of very to quite the months as two. possible important very this oil company and stabilization and reduction prices very, to focused Flip capitalize a months, it for terms the will next the my lead is something near page months, it company eight year, in page, is

six. So, we're on net open

and we need XX between year, a Next and and cargos of Jamaica total Nicaragua. Mexico Puerto Rico

purchased We have XX.

of going it. So, XXXX, we're XX of open total on we forward, cargoes. XX or need XX% a

purchased a X. of We have total

And substantial that so, of still open on as well. a we're amount

I've got us now. But a We're no to or of many But, we're gap. the have amount in So, on, to you'll to views really in that it's I there's gas that we ready I've a quarter close with business. activity about front. think obviously, see big times, the for folks but into new demand share planning do. a been question the on grows, next desire or experience this us asked not interest opportunity working significant drilling. this be translates really or pipeline real and the substantially projects greater to that I if the upstream some from specifically, need not so, amount in

this not we we're going opportunities on So, Jake? there's we focus substantial upstream and some business. in that soon. the But to think be will do

Jake Suski

division Zero We're as we morning. to company zero and update Yeah. to you Good our on emissions reach formed. that a efforts the excited

our world. cost per of which delivered you're kilogram is about our around dollar focus team At equivalent per a into of as As of the cost markets the really about MMBtu, half repeatedly, dollar the define $X.XX hydrogen. the said is around level, LNG and kilogram Wes has central that diesel

that emissions lot think see large zero hydrogen of fossil existing infrastructure, transform to and LNG and a today gas a our Because a hydrogen, lot announced amount grow energy also we'll distillate this the opportunity part of become couple fuels customer and a ago, base a really we across of our decarbonize customer where can presents our creates Wes base a we really believe great markets. opportunities earnings markets. to we existing to alternative with it utilize that's So, formation in Since tremendous proof think and the projects of lower we've due list down what efforts this diligence what and that technologies green our several to advance we XX interesting division really we of we've a to We've and kind of mission, think are through short concept viable making to per a interesting cost over narrowed our lot could of $X received technologies number gone hydrogen that months. proposals of actually kilogram. projects of proposals, a of emerging on over the our are last those

significantly costs hydrogen power oxygen. the believe the also to that a lower Just when a really convert you electrolysis and Israeli technology lower that with we've experience to. you to that company to HXO, minimizing CapEx. a and There's we're It one of can taken kind water, look, technology We loss you guys. that holds example by promising promise improving share talking efficiency

that cost reliant So, hydrogen. are to there we technologies to electricity technology the renewables, that this advance costs per aren't can really at low do looking type think hydrogen. as think can the are we on Not reducing kilogram some only think cost electrolysis paired we that technologies, but alternative dollar green efforts with path the accelerate significantly we of of

that we're So, with engaged number companies of effort. in a

with how use around our world Our goal to partner customer it science, and technologies, base planet. for but companies, these and to learn them commercialize with really isn't the to create the the these partner it's

is put anticipate our will goal goal of huge We get towards path us proof build by expertise this company. a getting quickly first investment, dollar to year of being that space FID our really a kilogram per concept to capital Our end zero build but and on the a don't in project. emissions and advance experience, the of help on it hydrogen becoming to to us

Christopher Guinta

guys Jake. talk get this to wonderful Thanks, It's all to morning. to you

the over you just was to shy turn in results volumes Rico. you quickly production a XXX,XXX for customer. full procedures the QX, undertaken with Starting drop $XX per day is plant a day. operating the is walk I'll driven which during by Revenue in There by X CHP can see you per and gallons If which through just financial Old Harbor QX, slide The million, for we the volume million result QX increase on for quarter average our gallons Jamalco increase Puerto is XX, the averaged little numbers, in XXXX. under that, number was quarter a maintenance being versus sold of of XX% quarter-over-quarter. in

of Our higher cost sales and O&M slightly was due to volumes. increased

to on with associated commissioning capitalized Juan sheet. San some was the the the facility costs balance of However, at

an the consumption. have line cargoes to anticipated one charges the quarter. the for was sales, match comprised terminate sale XXXX $XX of here is and for eight $XXX which $XXX contract charge mitigation included charge cargo million we million mitigation to for with million termination Importantly, This along

was Also, payments our stock-based associated simplifying $XX at cargo corporate would we the forecasted the at you excluding mentioned, compensation, with quarter, in and structure. original timing end the charge costs cash the per Wes QX. costs right two installments similar consistent of to the of our and non-capitalizable on cash during see don't As development impact SG&A termination QX, so cash Further, with when have paying the expense outflows are is QX, occurred. million any

cash volumes, of important and Lastly, note of ample plus maintain we build that Mexico Nicaragua, on cash all hand, including to using the from out operations. a committed liquidity to fund combination flows

flows familiar cash flip a the cargoes, this page. day about you'll slide the decision year. been remainder million gallons the around to the XX, rate X.X the to operating all at timeline and But run day remaining with to per has thanks to gallons We're of be to for million XXXX accelerated. If terminate you'll X.X grow today will

the during rest of We additional Rico. fully QX, and small in boilers have some scale a of and assets Jamaica Bahamas, Puerto the including couple will ramp customers that

in three running exciting grows is if see to volumes, online of be volumes in will quarter the the very and on and the margin. continue third committed contracting terminals annual rate new exceeding operating billion $XXX business the Given that, we today, come excess clearly execute note new million margin during well earning $XXX of Mexico run NFE over through $X at online once It to can Nicaragua. our terminals operating in we million

are plan, debt refinancing, If cost around we a two, to that mentioned, million after expect you will and refinancing, rating. cut progressing to as received and including B+/BX completing three, Step our of rating turn the with returning capital to which free met our on to page Step launch of lowering capital of dividend cash size agencies around XX, one, implement a soon is step Wes we XX% you'll we goal a the interest the shareholders. $XX expect And flow. cash will expense. that we see we

to as its that, With buy business to turn talk Our growth; cash nimbly or Wes. fund – for modest build flexibility it to ample less; leverage, capitalization before about you've ships and over us targeting back heard times ancillary terminals, the equipment. and strategic remains I'll new three hand strategy on

Wesley Edens

Operator? questions. for up Open

Alan Andreini

ready we're Operator, for questions.

Operator

Instructions]. [Operator

with Our comes Guerra-Garcia the from first question Alonso of line Scotiabank.

Your line ahead. Please is go open.

Alonso Guerra-Garcia

guys. morning, doing you're good Hope well. all Hey,

also business two those pointed wonder between progress near makes year pipeline, you the those and regions your anything the project term? to the more the you could I here can share by discussions or share specific targeting about and First countries in about the you're confident advancing on you that in if first end of question, highlighted on Asia. FIDs potential potential new your you

Wesley Edens

We've in pipeline signed three different in MOUs regions. our

the I For prefer be about specifically. reasons, to competitive would specific country not

are before, As are we sections said think world overall the XX there we of interest. that

focused power. and outcomes. are on that fuel substantial We or is diesel large and of very actually amount also very of economies, geographies a it burning now are oils, actually installed a search growing have populations, and not lot refined that incremental different have that That produces thermal power growing right other a is is needs

as business and so on to a that is we the geographically. greatly do things now our One focused very expand of sales are efforts

of senior weeks. one in salesperson hired the we've couple last So,

We to plus out our and staff have end the on the really effort. between and add goal now area four to of relevant sales year, focus a six in the people that building all another and

about Our and it's the customers those way fulfillment – business essentially, business whole is of customers' – it's customers operates. needs all is kind of the

the their more more the and businesses and our of front more better provide robust can we that in challenges, are. be we So, can to the solutions customers

I couple be the confident that. exact we report feel of materially between you for those to going have substantial Sorry, want but that more very than be we've countries at the that about said, are to a a convert to I specific done. to don't year. to project now be could and least I would and the of end the think goal, as My I it amount

Alonso Guerra-Garcia

No, that's savings. of outlined million cost fair. you targets And in previously $XX then,

specifically far? on have think Just I how think far any and obviously identified shipping are more I along savings? tied are interest in refinancing process the and savings G&A to you the process. that thus you what

Wesley Edens

far very along. are We

kind a out I Chris think, good laying our goals in On finance job, what of the are. side, did

a can looking on million the $XX we what we trade our for where should company infrastructure current in debt, are. relative plus rates So, debt at based just at financing space think $XX save to readily single-B million,

So, feel good that. side, on about very we that

a feel of ISO for substantial couple that. logistics operators ISO hundred done one side, We the container operating we world. the will On bigger actually of the amount have we placed in about the that new of good think We've be containers our work very technology, and already. orders on a we

a talking have small from that's from is a who have great bought and constrained very past that as oversupplied. ship market you a in focus counterparties cut of middle fairly Obviously, people we ship of big lot for what the position that we're to the you of we happens big, So, the when us. out one The go now. portfolio, to a

about large there's the fewer ships in terms, ships. simple five in small many world. many, hundred So, There's

that's real So, to business. a constraint the

go that OSBs, thousands, vessels cetera, thousands of offshore and assets service cut to actually you If that are go tens or you barges available. then out et and of to

of dramatically, challenge limit, then goes the it the goes logistics of then up down availability it profile cost and the and a So, assets operational of becomes simple the just versus other. it moving one

really, about feel really it. we good So,

Operator

line with comes from the Devin Securities. Ryan of question next our And JMP

Devin Ryan

here. question First

to more opportunity, a to us. interesting hydrogen the about want Just quite talk little bit is which

But to from a trying look number that at of little a around you're little potential and could around think would to Appreciate how NFE. for kind monetization more monetize anything just just opportunity. Just here. timing bit of the detail around a more you the the commercial what opportunity can, applications looking about if like implementation? a actually And really, more look you

Wesley Edens

interested they've universe good me I produce a all couple hear people to X% very that let said to XX%, ago, quarters others. it. So, helium, elements the are from that take got of the of XX% solution we a are this. in hydrogen, think

that full is molecule it tied up a The with world challenge the So, something in hydrogen. is of else. is

that's how from the do we with really, actually in of then is a of entire us. That it's hydrogen kind it? so And hooked the the way use we simple focus whatever for so, is goal cost zero extract mission can efficient, up the

electrolysis, it. XXX true for around is improvements method. been years, has been and tried There to have So, a which

of in see us $X. create to one concept the says likely forms is we're it's is future, a program, we of of what the And number hands-on Jake to like there looking to company find a in particular we do interesting, to met what that extractions good That's something cheap at pilot as proof are interesting. that, a think is build vast terms that today. As this hydrogen get is not gas a hydrogen, The when many extraction level. see in $X. of There's foreseeable of burn news it how our to meet are meeting we've close our infrastructure Once think from in think all we goal the and said, could Jake really the we that of the majority can have standpoint see is essentially, I'd that's pilot non-traditional companies cost program It actual benefit with promising. results great. And I not in of sector. enough

and right? have we The really burn cost, methane, it inject it into So, can into turbines, pipelines, our we're part hydrogen, hydrogen But our today. inject we burn on. hydrogen, cost, it focused if the in very it no obviously CHX, there emissions. So, is difference could between you is importantly, most

quantities, could sustainable no in source a goal. in creates significant we terms, So, really that and is would emissions, is the of if product that hydrogen simple we create really have what $X

the what basis And trying we at on for agree I its so, find viability we from go proof that test it, to want it, test to are get is relentless different on, we different looked that. about that a of options But see think of path and and And there. bunch we've a concept technologies. build long-term

Devin Ryan

And really, the needs pricing. into on of term then, the table to table the some today, you sight here take of to price And of you of are take the be, favorable just advantage you pricing and currently push kind or price just low the just for good see far guys to off how duration advantage off intermediate as a the of to how are able as LNG kind pretty have fluctuations you you kind ramp follow-up that operations? dynamics to the ability given given conditions? And look of Good willing a out taking just of nimble cost, supply/demand line LNG.

Wesley Edens

much have report this all more is you. tell quarter I'll on next I'll

less, we all then fill that realize think When much our on But you at how are look going about. long-term we do very with. initiatives buy to LNG future supply creating can and the short supply buy think delivered depressed, in one, issue business prices. is of And there's good long you for and us. not very have customers you $X an I can existing focused it's to at position very, right? we actually number is we're variable the be topic or to In we're a a need that are on plus gas I term, process the why Prices so at of is needs have open the much further duration concerned we to different need really hot all such the have you a our incremental for market.

focused So, this. that something on we'll we I've have I of a That on be should specific next around quarter. this about very and a lot hopefully doing got very with talk view what think point to is I'm

us greatest is term it Right? our the it's think our greatest the our and And long business for our in I customers. threat run, in sure. to opportunity short for

create the massive us. the competitive for business to long-term can sustainable we risk a It's what prices, very in so, massive at low And that terms advantage a mitigant supply extent it's is. of

of So, and where it deserves to top list it my right be priorities. sits at the of now terms that's in

Operator

Levine And with our is next question Citi. Ryan

Ryan Levine

your term? Do have the around you're of comments or some or potential that a policy $X.XX base current In prepared rates comments, any dividend. you highlighted structuring preliminary long thinking over how thoughts had about you around

Wesley Edens

what Actually, it. think is Yeah. laid I we out in the about presentations how

projected It that future start. It our a cash right modest that make returns the the dividend. cash greatly the transparency flow XX% it way in flow we to a the money A companies to of company. to amount is dividend modest It for investors creates that investable the great And foreseeable a is investors. a returns will between and uses capital XX% that are think invest I that expands people lot of good universe. now. of of pay

So, there's benefits obvious of many doing so.

sits recommendations. of obviously, go kind our We very financing there. make it robust at our cash very and board board can the that end grows, it pass grow, a But, on will I reason we'll successful around it think all it's to about sensible company from had to side positive the the but part, of then, the day. can as just in little We of in with works to the a that, conversation out a accommodate have work think policy. now, see how I we the last is meeting. at And the I the we company be that And least We growth left returns in as of flows that. grow, why our shareholders, and terms do then think financing back

Ryan Levine

or midstream you're also incorporate your of more company to be does for investment a terms potential the Would around traditional of more opportunities probably potential but step-out investment? there's comment that further going And then, assets Realizing a go not in upstream opportunities. acquisition investment this looking E&P, as to strategically?

Wesley Edens

And about It's don't think that I definitely long-term want I sustainable be is I that to be going extent forms to anytime not question, to of want And specific also the don't my really the it. we're but supply. leases buying not focus soon. upstream, gas avoid defined, to

us it's really to focused something obvious I'm And for we is have that happy on, and that on. concrete the something minute which it be opportunity very an think share with you. I I'll

Operator

line our comes Igor from question Levi the And of with BTIG. next

Igor Levi

out out about would fact possible Talking you you're for of to do the a two those to long-term least decided that How fill you contract as much if knew secure supply say be rest at let's year today the to projects contracts? able supply, far for to you decade. per as LNG able

Wesley Edens

XX years readily. to XX

a long, answer is long ways. So, the

Igor Levi

at being opportunity secure the biggest the threat, point, pricing for doing these supply aren't that given LNG of that once you biggest Because you it's time, just you're in and the bag. even the it fact in out as the have those get projects this year, them, bag? you talked you contract when each But them coming of So, about up. have is confident you gas project, to though ahead that the plan duration projects the aren't you

Wesley Edens

Yeah.

reason once for what providing. feel flexibility and us the That one our philosophy good predicting what about around whatnot, operating term we history, or gives we've down XX% of are gas we've future be can if about wiggle contracted contracted long thus room maintenance and have we're or general actually that, of goes an operating that another, to asset Our or some – we the is assets got there's volumes. an between a

in possibility So, then going actually goals the with in. I big is much how also we to lock look think business our there that significant That's we're side. disruption the a hydrogen of on gas on that, to for part a would do it. set the

a little about think, as thinking I well. it once XXX% think the here. between is again, obviously, short of something But to opportunity, challenge, establish that's of there's contracted, quite lot a to balance. will that that this between I around go in a a it's gets lot big something now huge a So, into our being bit and right room there right But focus

Igor Levi

year months? where And you we see next then containers producing will within OSB, onboard using as as have far a project ISO secure six project will the and that

Wesley Edens

yes. are answer, Yeah. short, this. essentially in both in We've and Nicaragua, the by Mexico projects is of The got in about in talked service the that Sam

ship it, It's it, by containers then, can we of that into minus manifolds That's essentially back them. year. out done plus first put the expect the works. or of it. it how to comes around that think bunch and back goes So, offloaded two operation anchored being projects be that repeats onto large with crane, Both with offshore, vessel logistics the a close end these a by the the And you a goes the shore. that barge out actually fill a on of OSB an or empties

timeframe can plus by is example of another six answer hoping in in I'm to FID the the your So, we'll be Merry we go people this going rest project Christmas, actually real to March, do is able work. that life roughly show And months all of able this we're example, for if, how with technology. question, to September, to then, fulfill think we the September

be of it. next step So, that the would

Operator

question the Malloy from line Johnson Rice. our Martin comes of with And next

Martin Malloy

up and method following open smaller potential or does the the this ISO industrial more customer or the up on savings broaden container to users? Just cost base there,

Wesley Edens

take vaporization, stick that on-site and them way. terminals an exercise. pick We we ship. to how base container We same would we the the back full service truck, it it at in their on many repeat got loading drag – site, the be return way the is customers we up ones, to I'm empty actual have case, then load already from is our exactly a And a and ones it In to which the you directly off describing, basically exactly this now. it drop do

So, day of we it do this have every times. done and thousands

true the safe. that gas or overturned drivers this for behalf of fortunately, very a it's Very, anybody leakage or We've injuries in extremely is couple technology. else. tried way – whatnot. accidents. on a safe. The no had and transport We've trucks very So, have had of No

have customers much is very, exactly time. you're it's But it as things. replacing result. So, day. that's to which And simply really, They've of when a to safe accidents doing better very I to be around, form way this. time FedEx But really service you able going of a every infrastructure to have move Amazon, proven UPS, good. from think our when done this, logistics, of happens a with assets been

be We And so, for to that's on good obviously the we feel path want ourselves. it. that really, really about

Martin Malloy

the future there, associated generation projects more you'll projects? we then, assets that power out And to with be as likely expect far the as should own

Wesley Edens

mix. It's a

power on be some well I there think we'll that on commercial be down Nicaragua, own in both the as own as bunch side. Mexico, hopefully, side the well. of a think customers, some In servicing case I of also as generation, the the utility there'll the both. of case We'll we of

in had the business a really side power time, plant infrastructure on there's to on on be fabulously. We a has going came that The great performed in doubt budget of no Jamalco is component So, going and forward. our big experience Jamaica.

squad I a great think done operating the job that. Brannen and have

terrific. So, that's

of electricity big world customers make that be you the works, have in woke part morning, sure actually it. At in a up of your house. day, works, you that want When Right? most you So, the to coffeepot that'll hairdryer end this power. your your the need

there's for chart the generate really much But thermal running end where very how the burning so, in that's per I is pretty switch LNG healthy cases of from much reminder a at answer that a burning bigger day on you than of to demand a think that se. is doing we think, is a to handy there there'll world be people certain for But power, I the so. from power diesel it's go savings amount And over why in for got the gas. both. have diesel, I gave obvious That's

Operator

comes Ben of our And Nolan question line from next with the Stifel.

Benjamin Nolan

first that important margins. that really smaller markets all, in? the has Puerto you're specifically getting far, I'm of to it's to to and Jamaica So, how penetration on been that small has progressed in of But respect penetration progressed. able to thus some maybe into customers scale Obviously, with experience the new curious, winning talk how the and Rico, deeper and you've that

Wesley Edens

had The customers current extremely building and has success. that lot lot at dozens a actually We've of of a been Jamaica been of there planned. that's the stuff both projects, successful. out Sam Yeah. of are forefront

contract another continue out We our in week. We to make Bahamas, of the servicing headway Miami plant. signed new last

significant days. of next project one. is It's a which first Bimini, taking have couple in within We the just gas

So, week, early users there we projects. a real started. just got that last prospects us. trucks, be significant are believe, very has those very we We've that customers We now Rico that number So, is for will commissioned. of I think first of right? loaded our plant Puerto think fully our

around we've Puerto total, So, the of It's and yeah, Bahamas, Jamaica different in contracts, scattered got then Rico, et around in the XX them rest cetera. XX XX customers. are

costs, this about XX. care It about Customers be so it's could There's time much and XXX care environmental distillate opportunity next So, fuels. customers displace issues. to year.

about we both So, care those things.

the is So, that really focus.

Benjamin Nolan

don't about respect there or specific bit progress especially with of incremental then, still to your of to guess, but is concept? a on with rail, moment? pause by is want appreciating that approval liquification that the the thinking on any be sort Or the you reinvigoration, little of LNG And gas I supply, that, at and

Wesley Edens

obtaining that that hand we those The the need XXX% permits. the energy right short by it We why all know LNG rail. time That's we safe in have solution. the to of move spent is. know is answer and we it's how We essentially permits

strategy think And And – into If I'll something in with kind gas of us delighted appropriate term. is something term. is lay really to for stuff, you, be supply think have we prefer and a prefer respect to just would that the to I not long not to useful So, specific we very I so. to it. very share the do with near we will

Benjamin Nolan

based close are to on you're sense being you able the that last. hydrogen, sort to then Real how it in get of that being are $X of per sort on where And closing to quick, of you out? part? kilogram any But without prove actually on now, able

Wesley Edens

a large is still have on better for not sources, squad view the is hydrogen, $X of [indiscernible] really and much that, hydrogen which is issues, the soon. answer. productive, $X very traditional My be Jake I or especially a obtainable very possibility. is have think concepts transport have that anytime The $X non-traditional at seen different stuff amounts many less. are there scale. – that are hydrogen There proven it of forms in really of and produce yet significant we definitely to out

of we're electrolysis, excited about forms guys of standpoint, the production hydrogen non-traditional our are From on. what see. than that's the we'll the So, much energy lots spending more but probably

Operator

comes our of question And with line from Sean the Evercore. Morgan next

Sean Morgan

of XX-month to rerating that grade. obviously, getting to to to to of have terms in a XX grade, you'd get number investment that there's achieve So, credit upgrades investment

cash So, generation that achieving to investment you of it's need have just to that you the these to pure terms the kind hit to a operations of agencies start incremental on maybe leverage given flow grade? concrete path hurdles upgrades or in rating

Wesley Edens

of points lots diversity, data terms at in terms the companies, to attributes those that of investment of There's of in and both relevant cetera. lots leverage, what terms are are companies and of et look of stability, grade in

literally We've data can of them. points many you been at. million So, a there look are through

that So, is it a now we you investment I track I be where have and had are think long statistics you quite record, be that actually the would it's if we had that, or going to grade operating right in believe investment. clear credit

the are now. understand what So, right we objectives

process The achieve and them. was talked rating concrete itself originally, and are to probably match great to we those refresh business essentially into XX up actually of to of providing had because So, We've rating factors. would back we happens Really, agencies themselves anything. them lot did takes the had had the ago, for different great guidelines with achieve. months hoped in not a conversations come we achieve very with what it we well what to we conversations thought and account

So, thing. that is a credentializing itself big

that really operating need. We which We more need overnight. become investment things to we need history, But become three grade is an consistent. don't diversified. You company there's

So, be of assets, just assets the a of to number. then, and XX our have terminals and that And not only need if XX, the bigger that five columns are lastly, customers be of just sheer XX% gets bigger, that or bigger. number so do assets, volumes or a great but just was it'd XX we we

get we So, function get from just that. and it's to to a of very, very how there. and here it's the clear path we and And focus time a performance that need

Sean Morgan

not of and linear. business step terms in the of really changes, guess I is it's sort growing

with of that's agency do sort multiple just on expect guys we have? the of could the growth and might commensurate project notch turning So, upgrades rating that kind incremental you new

Wesley Edens

up then, I you what it operating assets kind data and and and detail, we I why we the just a about, vagaries great great talk way from day hit definitely a able that customers day you And issues, and we on have The by a doubt every new that think to but these our savings closer investment four, the months, that about the the would We're do And a on a given to point lot diversity are get obviously deal business that nor day. over down. turn we another XX the happens. be reassuring debt. flows have goal that new shows to grade. XX of objectives a maintenance have terms objective. and to it's have the growth cash course get handful good because I have page, you to goals heavily be existing I we size. no closer on creates that's think the They in it's expect have as of the every we'll the if and it a storms. happen operating of And terminals, section but not themselves the go of of shared new the of we They Stuff indebted one. But have the day issues, is and of it is, projects of there's things tremendous history they of the company, I – if eight they will diversity company, next accomplished have history that with the

Sean Morgan

you X, you those the containers, page and just might of us ISO from just Can quickly smaller more that active talk container to all you the of more this the then bit And information pivoting little ISO ship, benefit just which about maybe efficient a strategy transfer? regions where give and think around regions.

Wesley Edens

Yeah, an customers I makes LNG think having lot the answer for onshore about terminal you think it, sense. a is offshore large all or of of the scale them When do.

a if is a and million X day, a million of a X million or makes or lot using traditional that the have gallons So, long-term customer you terminal X.X sense.

rule good the here's of For got – that thumb. have a customers

power, XXX,XXX LNG. about of of every day use XXX For per gallons megawatts you

XX,XXX So, moves. per container, XX that's gallons

you'd and time over a is frame, XX it's many trucks not day, which containers. just megawatts, XXX moves that have a For hour XX

you're customers, terms X think got or I where about But a the the on if or it's that X you've million the scale solution customer, to that's there's from different us, sense. scale X think it. the than the balance, I smaller So, a lot have time situation a many world incredibly way in makes having dimensioning gallons day in of million positive. in the find a things got applications Obviously, of diversification, for all more many, needs. million group to deliver, single a people of it needs large for you'll And does think

Operator

Marc next Solecitto of line with question Barclays. the comes from Our

Marc Solecitto

scheduled your up eight similar are did the liquidity you Just And first of you Centrica look, How the the facilities those? when we those, through just about end on the build ramping in that revisit you XXXX, think to legacy cargoes as cargoes for should with year? potentially XXXX.

Wesley Edens

ink existing The the deal. on dry barely is

a So, we do show for on us terms the of have we sense through went we haven't in would focused a as and of needs It substantial first depend and their on It where numbers I are relative to of that business to still kind the next XXXX you position. year. have we in at part similar open the yet, needs a counterparty. make transaction may the

now, customers that passes by. for year that burn think it's think that are the obviously. make conversation, moment, down going we And still they're to not we're I go up, pipeline come so, for But in existing right later now. the we assume about we'll need number we are open and to XX% gas friendly a And in. volumes, the Right going that bunch to in year I think and those scheduled is as we cargoes do the that more with decision just as adjustment a because very

Marc Solecitto

And dividend helpful. strategy then, on was the shifting the to commentary capital allocation,

I think in upon have a wondering mind as answer target to just the rate your prior well. run if but question leverage this, touched you

Wesley Edens

do. We

that's we than less is honestly. where times, Our of now, goal be X kind I to are long-term right right? think

where think, are is of is numbers, less, but X less we and growth account, all these investment we long-term. from that, guidepost. kind could or be that Those assets, reasonable, it it any that's So, considerations get the substantially that with frankly. that's But than et we one potential the or think grade of take also into the we you And region X less think we given consideration disruptions series cetera. and think asset what

Operator

Brothers. next Tuohy Shere our Craig the line with from comes And of question

Craig Shere

is And new with not start flex is value where Flex reason ISO mover of your moving And Caribbean there solution? Central on enhancing To up? the see any hub-and-spokes and strategy? timeline ISO is is American bunkering you model, first ISO flex Nicaragua's your the project materially do ideal the size this

Wesley Edens

them size take is The order. example reverse I'll before. I in used the

sense of a question is more us to I have that. long The off the there the coast and term so the answer So, of now of product for anchored large right logistics, think FSRU was would second fewer have a Jamaica make the to good in very of is example handling project, fewer the yes. the is

specifically reason timeline advanced has why been the Nicaragua because this of Specifically, the solution. is on

kind real really parts the again, of us think we advantage. gives each we a really sense. competitive service chain of the that's what makes manifestation so of it the having to, life believe value the much why is of that And So, ability

ISO these be complicated, of all all the vaporization capital and those you logistics oh, things, yeah, I none manifolds, need you trucking things. a need containers and need pay you have is and So, individually, you And, you power if need that ship to helpful it'd need and it. need you think don't and big need and you but for you

these deliver years. not country. It's that they that of that's turns be these is years project one that countries the and not to really project Nicaragua on meaningful project relatable. in MOU, good something we I've there to solutions it's are. five seen competition been such need competition epicenter so at X,XXX that's I says been time. now, the because infrastructure is of new meaningful the alternative all And the It that of example a and issues and very in of does in need So, built the It's need They and now. cheaper that the much the megawatt done those megawatt long on signed many, world, address projects, five us X,XXX there that a around And in don't moment. are with and think what which cleaner than certainty, around world the going the there gas, at why much side from world a that are under-electrified at or turns different solution I the these many is the believe many, is so It's a is needed. world the is power on but will for a think that in the first

Craig Shere

existing your fuel mix hydrogen, the is can customer the what fuels, terms hydrogen in on to owned with max the generation generation of be in supply And and you that turbines? what

Wesley Edens

XX% turbines, the folks today. to hydrogen tell up GE XX me, can burn

a is lot. answer the So,

infrastructure Right? a very it. is all are the the answer that as So, focused we're I that's on we so busy the is over that – because an usable And developing world hydrogen why think for then lot. alternative

with existing immediately. And $X which it obtain So, value could come ourselves plants real customer on these different if and you production our proof would potential that's assets. capability your hydrogen, to magically technologies them up generated actually we that's were turn concept able on a by of the of the course of that our because as we partner hydrogen using the goal, actually

Craig Shere

may which opportunities Interesting. infield XX does you fit Last long up LNG the long-term concern, term from hydrogen into concern on scale if not now solution. But this liquefaction risk? supply years be come with a question that where solution to small

Wesley Edens

We of on in interesting. world. guess, a spent that it's gas lot the it. when time there of a is lot there's fired I it I at four years is And looked ago, Yeah,

trips looked way examples. it where field And And where that, some So, to deployed. I think true. I've actually it seemed saw places was gas. was sensible they're to take fact, actually some places flaring being did like I is liquification a in at and it

every the be trying question, that sense very could desirable goes great numbers, that. led to Not We believe be out. fit in get much And though, know I if that are I working term. figure a asked just the in, fired us it's a in being simple accomplish. to the But is, you really is a to really actually to how that used out a interesting. of it solution we're I think of what I never with how And never are for trying which I many could viable the oversimplify, definitely do scalability it So, would numbers it satisfaction is don't my gases that of I may long but I think there could was environmentally, could actually. get still that come it's how process. clear molecules certainly think think so. on liquefied that that But to that there that was very, manner. lot people that world in and commercially molecule

business would the So, sure application that. right not I what I'm the to our for do turned if would given be into, us, has answer. But scale applaud the efforts

Craig Shere

with even long that liquefaction Wes, flaring and you what have, apart world, issue the I do other actually supply and locations Pennsylvania-Marcellus things awash control opportunity, market, of the solving deploying from look in solution? with know nutty. the term Pennsylvania you without owning long – a term this in LNG, own for the and known the in creating FID So, reserves, the could really world today's couple But you an sounds years, a you as out and in fit win-win terms into where like and

Wesley Edens

looking I don't lot questions but to want a that point, answering thing. partial the right? about the evasive answer is of we're be answers. at to don't same Well, I give really want I some alternatives, think not And absolutely directly, at

of something we about a When just leave more to it. we'll it accomplish. that we have lot at specific, And we So, different want think accomplish ways to that. let's there's talk what

than later, it'll I hopefully. think sooner be

Operator

no I remarks. conference for further back would Mr. you. to this Edens turn any showing I'm Thank questions And further to at And the over time. like Wes

Wesley Edens

of remarks. closing Chris? Great. Right, for interest to questions October. look and end thanks in the Great. all for No and at in the calling to we talking hopefully morning this forward you the real Thanks

Operator

this gentlemen, conclude does Thank you and participating. call. today's Ladies conference for

disconnect. all may have good Everyone, You a day.

New Fortress Energy (NFE) 3 Aug 202020 Q2 Earnings call transcript