Earnings call transcript Q4 2022

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Operator

[Call Starts Abruptly] OPAL Fuels Fourth Quarter and Full Year 2022 Earnings Results 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].

As a reminder, today's conference call is being recorded.

I would now like to turn the conference over to your host Mr. of President Vice Firestone, Investor Relations. Todd ahead. go Please

Todd Firestone

and to Thank at quarter XX fourth of available Fuels call. Financial me Adam Officer. Welcome OPAL’s opalfuels.com. released call months Ann are year-to-date presentation of available results replay XXXX our available results you, XX XXXX Web good morning, completion With Relations Investor are for Comora Web will Co-CEOs, those to site are and yesterday access for and OPAL a the today After on days. section Maurer; The quarter this Chief and and this the conference and Anthony, on OPAL earnings everyone. afternoon the for Jonathan financial call, and of operating Fuels be year full site. fourth and webcast our also the

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

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

appendix After and call nearest Adam open We'll of the the certain of of to update. call will presentation. GAAP will measures limited adjusted definition priorities. to, discussion up measures Additionally, John non-GAAP and Ann for strategic questions. results and in is XXXX give and begin operational an highlights guidance. this included will release not then providing call reconciliation year and our EBITDA. full will business financial fourth non-GAAP today's the measure measures, but a quarter development by commercial which of review update then of including contain used recent A on and results, overview the these

Comora, And call now, I'll of to the OPAL Co-CEO over Fuels. turn Adam

Adam Comora

Good Thank for everyone. for XXXX as and the Fuels year achievements you XXXX positive for quarter well Fuels end year was as whole. here a for OPAL filled call. fourth with being for earnings a Todd. as you, thank our morning, remarkable And developments RNG industry OPAL company many

accomplished several executing plan. and We focus are steadfast on our we in we've points. on proud highlight to like of our what remain I'd

highest the remains to integrated distribution. company remain US currently our partners. also industry, our marketplace. Operationally, our as grow and platform value market is renewable only but which providing in We First, RNG RNG, premier we vertically to committed our and customers the continue powerful RNG to to carbon that to the model and production our priorities. value Strategically, on strategic of believe value operational maximize integrated one RNG fuel excels to continue transportation goal shareholders delivering execute at we be that our is the a low not in the the to

and more by year. tangible a than past the think a our this growth we visible is marketplace. RNG We Importantly, factor our grew output differentiating third in profile

of X.X XX% the our this in than XXXX As to midpoint greater we XXXX by at expect our over million disclosed outlook, MMBtus guidance. accelerate to than we year growth more

remain visibility XXXX. track, production Our which XXXX projects to once on construction accelerating in again and growth from provides

place from X into output grow we XXXX. pipeline some and development to at as in capacity expect of and XXXX the million continues will least on to production, our mature. advanced touch to John of And seen delays later, construction we addition In have development MMBtus ease

environmental on integration vertical our current views pricing. credit I want on touch to model business our and

RNG cellulosic expected see being our the of and as incremental Having drop leave able segments, continues believe the markets our renewable We those flexibility We both Fuels into RIN be future see business continue in volatility will new strong proposed long recent RIN will in occur of and take, dynamics and of value power and June on set merchant of strengthen. RNG capitalize price proposed the model our eRIN in option introduced get the speak power us public is remaining that, with model the optionality merchant we DX of and DX provides XXXX on growth mutes dynamics, investing and policy about take Ann let's fuel and production. RIN to additional explore some participate It incremental without existing segments, station important produced and from of in averaging initiatives of the of both oversupply by the RIN potential highest capital. supply RNG the market the continued eRIN is maximizes transportation do to to rule in in by and driven and to lot nature dive important note in some year. new fuel segment finalization driven generate a recent of pricing said two rule in later both business production our the fleet will to of tailwinds, and renewable this term LCFS on The EPA OPAL fixed by with twice oversupply of credits. RNG off pathway to pathway. off this value that questions markets the test be this by from evolve future DX potential some those as This benefits value our the On significant again factors; contract and price US to contracts business services which new volumes end capacity and pricing power customers. December the the

potential the this as around rules clarity get more providing be will finalized. We

rule the It RVO of to higher become be adjusted of that both is On as account original demonstrated production industry future door to and clear new reenactment six the remain intent year finalized. DX set updated the raise category for that billion months the could growth volumes cellulosic opened volumes With the the over targets figure. DX the demand the of as waiver has the supply the and targeted the anticipated and the EPA administration category. cellulosic single over meant of online, for stated is to be grow DX coming well why are so and additions, has side to as harmful actuals to supportive do this past important support The important the was we multi those law can The commentary and change. RINs RINs, is biofuels emissions, remember cellulosic the to of supply EPA category. of EPA the combat growth of $XX climate methane thing to EPA RFF and optimistic most original capturing we both It to rules category eRIN is credit support loss cellulosic up support proposed period. source

the now a the to into dampen feature visibility Another have of may interesting that four periods. perhaps the for is that up feature and volume in their set for year believe two year RVOs. We RINs volatility contracts obligations multi parties multiyear open future obligated proposed will rule

contracting more from and pathway So from from new projects value existing the structurally, and from E-RIN may future our the perspective, ultimately will see multiyear we we create opportunities believe OPAL RVOs.

through we roll outlook, touch in first how the of will limiting as our reporting. later that finalized, our are and the XXXX will this rules sales and currently Given on half RIN are year Ann financials

LCFS to As less you our guidance see sensitivities, in exposure have pricing. we much

Sonoma we XXXX. finalized over clear program heading credits is project likely compliance which off remain for stronger like balance giving less LCFS the on market the Our by currently the and contract starting targets, very CARB that pricing take an and demand investment a for with versus next production creating proposed landfill. online has will credit more have be include optimistic much on pricing, though to direction LCFS it CARB changes $XXX to a would floor intimated year. has of to they encourage incremental of signals is per On supporting XXXX to we credit dairy

we our which from As $XX are EBITDA to adjusted we range million. look $XX introducing million to this guidance, year, XXXX to expect we

production more in detail provide to to $X.X expenditures million from EBITDA capital MMBtus Ann million $X.X prices. an gallon we million. every change from range RNG and expect will million $XXX but $X for range $XXX DX RIN XXXX Our $X.XX million adjusted to to change

broad developments based to our industry. substantial in We benefit and continue from

evolved provide to some several IRA the how like months. has over the I'd insight on our thinking First, last into

advanced development thus confident While construction await to projects. from that all apply of the and in we provisions will guidance landfill treasury, the we are our projects final encompassing nearly still RNG pipeline ITC

advanced we have discussions benefit of are ITC the advisors still significantly. determining will benefit, in we with appropriate level the counterparties and we While exact to believe been

Second, are months as the the that treasury to in on clarity coming impactful from credits XXZ and well we front. be set expect

the of XXXX good near long and We good expect saw next pricing year term beginning momentum positive five pipeline. ultimately from commodity contrast the see some for bit environmental a environmental project pricing our benefits headwinds In throughout we a be project in year term in of with commodity to driver XXXX. new the begin is of but and In begun new XXXX, set to To XXXX XXXX growing value credit OPAL very the development realizing them the our a development, see but in and have some years. these degree, near is saw lower we credit our with XXXX, business. Fuels. term which very

turn to With that, it Jon? I'll John. over

Jonathan Maurer

out year. plans. you, RNG focused and on XXXX grew want very grow XX% Adam, on start we morning, this executing in I nearly our and everyone. saying we by to expect growth are by than good XX% that more production Thank We to

accelerated is a expectations we in in timing us sets growth line with is progressing portfolio's Our and for cadence XXXX. our construction think up that into with

seven project the there X.X continues landfill At nameplate Bio These in During RNG projects, Project just Town River projects, dairy Ohio, gas these the as project three all in increased of production and RNG RNG XXXX, Bend and we the our with in New portfolio increase. Indiana. three completed our Minnesota. projects three from capacity. increase represent Road six Pine MMBtu volumes the now trash to commissioned landfill million XXXX, to Florida In projects of project Noble in project operating

year, William XXXX early in XXXX. projects and dairy online in the the several in in next project six Sapphire Northeast projects Emerald as in In with Bio currently our operating addition we expect these to RNG RNG said. we go the Town to projects, Of and have dairy be we the months, the operations six, late later commissioned having to fall entered two just our Prince in expect construction we landfill

this to portfolio As increases mentioned, operating XX% that and of in line production the with are million midpoint we being with Adam RNG in a expect increase expectations production compared construction from year guidance MMBtu X.X XXXX. prior in production our our

development gas on I logjam year to presented is improvements. assessed The executed already development want of is year. as market earlier are a some number to development translate development up an last placing call. this resource. quarter and projects quickly but added have that we we pipeline XX million construction which pipeline as projects. to of pipeline, dairy progress and does next value color mentioned seeing and of their that about most is challenges, projects, for to also stage acceleration construction dynamics topic pick also surrounding the more contracts we moving we breaking projects reasonably landfill advanced over terms continue of which of into and into forward compared we improving third ones on months. not projects on our advanced qualified We this what acceleration to within Recall and Adam that good tended earlier we Since include in contains construction biogas MMBtu can that have with food we remind today progressing described of projects which agreements other through X.X anticipated development our news conditions Fast XX and for through are forward We delay our the listeners should year. project last last substantial into easing. waste the and rights owners are expect the be landfill These provided RNG advanced I'd to conditions reported, evaluate. the projects how we that that our

best growing RNG the opportunities. for the players As as one our we the of in all screen the we tend most dynamic of the and to projects sector, largest pipeline of which in makes marketplace, see

development advanced funnel to pipeline. and excess overall our Our of continues qualifies development see opportunities provides in what momentum positive as

OPAL to year, commence stations is approximately on XX XX this and parties. fueling for stations owned Fuels XX another construction of third track OPAL Fuels

volumes to gallons Our XX in grow expected gallons overall nearly XXXX. to million from million are fuel year dispensing RNG approximately this XX

our In terms XX landfill landfill and representing gas to Recall in owns back portfolio XXXX. nameplate electric megawatts began years XXX XX about of gas we operates to projects, ago of this OPAL electric Fuels capacity. developing projects, that

this guidance EPA topic, the meantime, few ourselves market by and proposed to has While projects of these candidates create eRIN will adding on positioning continuing EV data of gross this we per projects. meet these which updated in existing from to collect. stands are the is potential discussions to $XXX projects, depending value from to the In six who segment, business manufacturers increase R&D which they the values the conversion over are of expected that await The the the the hour eRINs the next eRIN price. this We auto substantially on to EPA’s electric these through for with majority proposed remain months. substantially EBITDA recently are projects, projects, increase pathway these RIN opportunity sharing megawatt to

of industry about We’d as support As we downstream significant thinking upstream We highlighted tend additions industry those value OPAL RNG are the and remains for early tailwind on, to highlight the transactions continued Fuels. infrastructure. consolidation integration. industry acted certainly that and think acquisitions upstream recent a existing how to players for

shift low already well the driving thinking We're revolves markets, and for RNG this fueling in as hydrogen the coming sources expect methane the demand expected of Separately, several stations around of increasing producers utilities demand years. is demand carbon this Asia positioned assets from well forward. portfolio too. as in form market trend beginning to take demand seeking European for and expectations growth RNG increasing how power consolidation over of end the are and next many Some advantage that as our renewable to seeing generation, mandates from of are with production moves

to over year Ann? quarter turn now end the fourth financial to our Ann and I'll call results. discuss

Ann Anthony

and of higher growth good XX, in XX-K we of driven call. two XXXX. sales to strong primarily contracts We day the in filing cost were growth, morning press our well gas And $XX segments, John. fourth which our online fuels growth support we million the the results station and and business sales into you, today's We These considered with our costs We and all costs, biggest electric sold and topline volumes come costs have higher we fuels saw starting for higher X anticipate million, results G&A of other transaction $XX energy the as for is driver and our had times. driven brown as under where Thank RINs from quarter period fuel RNG the costs in by higher higher quarter so. up RNG in that reflecting night due the to The earnings ending end prices entered on revenues. XX% benefits produced by three Last and which for release, fourth utility in detailed to earlier services. revenue RNG partially offset of royalties filed year-to-date totaled is to employee year-over-year, segment, are as well projects contribution by fuel see or for higher December XXXX. the quarterly RNG strong next participants saw our year the XXXX. quarter the forward

$XX in million. result, income we a the generated fourth quarter of As net

year we we for commodity the full plus XXst, in preferred benefited million, XXXX, the dividends, from Corp. sales higher results impacts achieved in Clean income since coupled forward fourth quarter, early operations Transition the prices. with for pricing that in Consistent via considering business combined XXXX last then. we of reflecting the July we had the before net our standalone attributes the the through with results $XX.X environmental ArcLight locked and of OPAL saw of LLC For closing combination II Fuels

was the RNG the quarter. from to X.X million $XX.X Looking of the result take debt versus in million and $XX.X third previously to LCFS associated third quarter quarter, money The $X the off primarily the OPAL was at net constant represents million with million gain contract. fourth results difference in remained volume Bio monetizing production fourth compared Town the which Fuels. Adjusted disclosed at MMBtus, the quarter in EBITDA

along that months benefited associated Adjusted unrealized fuel EBITDA by We from discussed We quarter quarter $XX.X downstream sales station higher to December. for the also one with exchange adjusted for above. in timing XXXX. EBITDA months contracts. EBITDA our with ended some loss higher of million heavier summer million environmental time $XX.X some seasonality related reported and the see we Higher do XX the XX, same of excludes construction Fourth customers items, commodity December and fourth drivers offset and with experienced in volumes pricing completed fueling several warrant our downstream some attribute an adjusted royalties. including cost of we pricing the

to and which of going throughout We from are during had adjusted costs excluded fourth a quarter XXXX, number public that time also one the related occurred EBITDA.

borrowings, outstanding of related borrowings million the A, XXst, net December million Greentree we under of of the $XX.X power amount of had loan $XX.X As we acquisition of $XX.X financing. related our projects the to convertible million the and Ares Sunoma million project renewable and for had Imperial note issued XXXX, million costs, to in the $XX.X Loan $XXX.X Term including deferred to outstanding of financing remaining of

remains we finance will or portfolio undrawn. August construction Our that a which be shortly RNG of projects second are we’ll term in loan, and in closed which

million, draw was XXst, million of We cash we Bank $XX short of $XX.X liquidity of final our million our recently the under Term $XXX.X including or exposure term equivalents, not Signature remaining position of of Loan did December restricted down Silicon cash X. to and have $XX.X undrawn any under note capacity million investments loan. Valley cash term $XXX did that, $XX and million I will million also either As Bank.

associated spared growth dealing other distractions were been of the the any many we in companies with So that past few weeks. have

for to capital these expect the months. liquidity construction and XX of existing the sources sufficient fund needs next We to company’s be development

space. anticipate also in for capital We the RNG deployment be that to available significant continues

very on investors. power. best team long how and As OPAL attract company, to a are believe demonstrably earnings is we grow to focused public powerful the this to continues way capital newly do effectively to deploy term The most that

the Q&A, and to I discuss note date turning over all the is like undertake call we is Before current of I'd XXXX published for that update no to to guidance guidance. our it. subject obligation will change, as

adjusted XXXX noted $XX to anticipate production of Adam million, As $X.X year million $X.X our to our which based is of earlier, guidance range to $XX million EBITDA XXXX RNG we on be full range MMBtus. million in expected

predicated for gallon MMBtu gas. as such outlook DX RIN, brown assumptions price $X.XX EBITDA per adjusted and ton Our on pricing credit for several key is $XX LCFS $X per

revenue price the we quarter, EBITDA outlook. of This full our year detail also impact changes and included to on adjusted commodity

$XX for every change price and ton per approximately $X.XX adjusted change for to in natural for LCFS change metric an credit a DX million RIN per in gallon EBITDA in per price, MMBtu change expect $X.X $XXX,XXX every each million We change gas a price. $X.XX $X XXXX change

to portion capital million also $XXX of $XXX expenditures, updating and costs for to acquisition million. are capital guidance our excluding net contributions any We partner our of

about in be of include specific else some will that treasury, monetize from the await have until can guidance we RNG our disclosure the we definitive everyone XXXX guidance but space, we who so limited follows does amount Our assumptions clarity. like ITC

five the be which expected least are not of as proceeds to tax our in is is but income for income, at continue years. other All recognized avoidance. IRA cash reminder recognition benefits income, that just these likely Hence, will cash a real

and environmental As and once related sold a to adjusted present the attributes allow attributes the we stored only GAAP by of earnings the are unsold timing of from and in We environmental and reminder, accepted can they EBITDA of the ASC-XXX, production. understand to value counterparty. value accordance the revenue as reader with gas transferred to, part recognize

anticipate in report to continue and our EBITDA await will while first to we our a RVOs. as EPAs stored We half production selling minority only updated of visibility as adjusted with of credits the XXXX, we gas

the As costs XXXX first and the the to a year. income year EBITDA within revenue net levelize Again, result, are match adjustment the results is intended reporting to and latter will the of this lower half for period be recognized. half of skewed being inventory produced the with

services. for forward be expenses the business XXXX, our going and we presenting revenues fuel CNG Finally, with will tolling associated in station

been OPAL operates owns the a the prior dispense noted the service in where customer. for activity segment RNG stations earlier, in dispensing XXXX fuel a location This and number and reported As periods. and we had of fuel

fuel to that are in dampen exposure attributes, drivers we business include our our to we to downstream our easier as in a environmental in value to volatility. facilitate streams business comparisons and space. portions and merchant the services activities that, this earning inherent peers will due this business several are to in forward, volatility of play there upstream and between Going labeled the better the differentiate station in segment although, the Adding

changing service environmental out remarks. is by station provides which back for two of agreements corporate fuel business I'll for build, volatility services both contracted John visibility and renewable it that, Adam markets. predominantly key stations months. purchase under XX which these recurring as credit With turn net year Our fuel supply our cash power effect segments long business and and roughly to The stable provides earnings overall dampens from flow, The XX profitable as revenue concluding growing agreements. contracts, is from well term business construction supported power and we

Adam Comora

Thank is you, Ann. In future closing, our bright. we believe

growth and projects distribution. advance development in and into operations gas through projects new with add to accelerating continue our We production funnel

RNG we climate carry to continues I'll to sector, lean interest And in vertically reliable and fossil continuing with to operate displace mission leading, in facilities to best class to us OPAL’s Q&A. Thank into for fuel that, over change. cost integrated solutions around and all the forward world for turn call deliver OPAL the this build operator RNG that are industry Fuels. effective you and mitigate the While your

Operator

Instructions]. [Operator

Whitfield question comes from first Derrick of Stifel. Our

Derrick Whitfield

Good morning certainly first on a company, all and and environment. a congrats as year successful a difficult operating in public

lean my first the medium wanted and prepared to For near progression backlog question, your on your both I of into term comments term.

For XX XX, it schedule QX. appears that Emerald, all Prince William along out and progressing in laid Sapphire projects the are you

XXXX, you your the you development conditions XXXX based could parameters that of in advanced could capacity on some be amount beyond Looking the production project place are improving in operating from on experiencing? pipeline placed

Jonathan Maurer

online seeing a beyond the So projects Because months we placed advanced gap that. be gas so, will pipeline you be bit little online. from next see continue fewer placed available. capacity construction production, into last until we coming could our slower. of into that construction the we this a of of we as start construction there MMBtus in XX about development dairy projects X But And or million little will of time construction over commencement would online gas year coming a little could average year in be your be of go frame landfill faster, nameplate the and projects into going XXXX, year project into we have that construction, Northeast

XXXX the And this XXXX during late the continue will XXXX -- come timeframe. start year output as from and our will really projects see XXXX, this we gas to going increase online projects into to online. are contribute see those we that the year during then construction putting So projects

Adam Comora

we half full into full 'XX thing from in, later output I that will in get production in this of is, couple ‘XX I you and and visible also that's Emerald think would year months from production really add year on and a project 'XX. will the a year, growth accelerates the obviously, goes a only two have there the in of the

Derrick Whitfield

arguably wanted optionality of the to follow-up, portfolio your XX, my I Slides implications result the of focus in to business. as a before ever IRA XX your more you then And on than as and Referencing the IRA. have

As that how between likely hydrogen the with allocation capital you opportunities, eRIN electricity impact the understanding does and your view growth comment landfill on in of RNG of on relative more ITC for eRIN the time embedded your on the guidance, your of and your RNG, then and the the EVs assess friend pathway projections? specifically based degree could you XXXX And to gas?

Adam Comora

handle ITC and I'll regulatory and talk IRA I'll in let terms bit happening, Ann first, little pathway. then a some eRIN stuff the the of of about both one

Ann Anthony

the EBITDA ITC. being little we’re commented, for likely I had most what fact So come which adjusted I as guidance specific the think of for that we given terms circumspect waiting in we’re amounts in still and additional to expect treasury, from in QX, a of details included we’ve

about the that. we’re this and that, much than construction are But assumptions, projects disclose I at think that in we’ll to we really some COD more that not underlying are ready year. obviously, think making point beyond I this

Adam Comora

other as -- And this far as here. the of is some Adam

also it addition some we happening, policy clarity on, how to the of clarity to around may slip get in or XXZ the number As We in we far of the on other intensity that going The carbon in new eRINs finalized some we’re they’re as later that’s to which we’ll has about public project the into expecting some of get see that’s stuff the or scores opportunities electric so going calculations may that see think and think be ITC, they maybe When open to of really allocated. not and RVO but need get that at volumes, and on on existing really for may a The uncertain back more look to our eRIN some really comments business give or clarity in kind projects and when for we whether what expect whether think going June. landfill we’ll development do kind little we of that. interesting the of to not a a our gas sorts up better all that is is understanding February, rule. incremental little that specifically XXXX. CI we the to the opens see profitability timing how finalize to a up. received negative opportunities and include EPA pathway of impactful [when] gap clarity rules in we bit heavy perhaps And XXXX

perspective you we markets quite gas we on up. are to think about end capital that landfill having lot versus mentioned frankly not or export the project that that the for all or hydrogens whether markets a RNG electricity an it these opening like are makes As optionality from a new a up of project, opening what

we like risk returns we whether voluntary to capital the idea it’d fixed can project new for voluntary of markets. on strengthening continue and capital that RNG or take, an markets flexibility be deploy adjusted have So see to if off good

obviously, see overall. business profitability we a the landfill gas So it And be capital. to our as -- new big invest will projects, that on existing electric additive landfill having incremental to without

they see timing for for about excited that when it we’ll rule. we’re the finalize the So and prospects

Operator

Our Todd question comes Sandler. Piper of from next Ryan of the line

Ryan Todd

it’s improved, getting your addressed many to about I'm of challenges your improving? you on been landfill, -- I project Congrats the not in chain of and some has on that improving parts delivered what the maybe things those forward industry RNG for terms Can execution, a of side, on in your how conflict both talk What the apologize on going and sure I and project you earlier if I budget. dairy But some result, this comments, time biggest for challenging execute so volumes and is I of if and are earlier me call. hope and the -- and anything? execution significant the missed let stretch in on the supply guess, backlog ability have been you

Jonathan Maurer

I'll this start with off. one

the that opportunity landfills think their pipeline I execution quarter of the reassess value last of the movement reported there landfills and many contracts far each and in proposition. was they through as how in of we to wanted inherent took and as value RNG to a realize the of approach that major landfills slowdown the

But through think and a of delay. there. through pipeline I they advanced our progress of So movement that lot that and are resulted in process a development we're bit seeing

think we So MMBtu conservatively, put into we will year. million X this that construction

really we execute X to and conservative is on to opportunity But outset you projects accelerate want and have think in pipeline. million, pipeline, there our the overall update to we reported stay that guidance as those great we projections we Our that. on

Ryan Todd

is of it’s moderated is this that issue an that things anymore? anything level supply side not on point, And to or that there at chain has a the problematic

Jonathan Maurer

No.

of lead acquiring and In there that that has build equipment plenty opportunity get out little terms bit that need anticipated But there a affect. been is projects. we to of of most of equipment, a time our to the

seeing, material nothing that are So there Ryan. we

Ryan Todd

issue this where is the in investors, or from move of your timeline remains of and the that this and sort focus have the how the positive grow shifting challenge, an is current you you that to liquidity what a stock, for what story things we the on Maybe EBITDA are way? valuation. to with address Can along in and conversations stock about options just a gears, even those be And earnings liquidity may much might talk possible? have

Adam Comora

positively to different similar a I don't are people our primary where see will of more issuance. maybe in hear investor meetings we say is liquidity ways. couple to do story, stock. disposed share like answer it like our have the really One need any I'll and would we in OPAL we RNG really to and questions when

place plans capital raising got to and We development execute have continue enough pipeline. place our in to on liquidity in

primary capital like no compelling value offer I'd here. most So is shares management issuance. feel share raise there share secondary we issuance, teams, a from From say, a need our to

a there a opportunities interest So immediate any of to currently on lot tuck-in smaller have increased liquidity the and flow perhaps be way. we and don't plans if secondary with know think is We acquisitions could and that I place. some there that don't in increase flows do

thinking going analyst year. spent about later day are We or investor up to an analysts ratchet and time continue and with in the spend to investors

Fuel, So on table of be either a increase secondary. but and primary we or visibility don't will have anything currently visible try we OPAL the the a and for

Operator

Company. line of question next Pickering, Tudor, the Matthew of from Our comes Blair Holt

Matthew Blair

in the as right, quarter-over-quarter? Does as DX is that lower how EBITDA that be of to Seems we some well should say else you higher And QX? thinking progressing? prices about from any sound be from thoughts on DX you’ve Bio if likely anything from or volume RIN RINs last year. had like Could there locked stage, is you the to in dairy, QX margin regards about rolling at QX this is can but lower off startup potentially benefit and share Town the then headwinds

Ann Anthony

others take that So jump can I can in. then and

given obviously, generally we're said everything it, We’ll you guidance. with. in that and reporting just reporting don’t six I weeks QX here So the, I or I so. agree there call be think But know, next, we’ve initial XXXX

think seeing -- right, in production from we going growing. gas perspective, it's there two the The our caveats. right I direction, caveat are are

Town, are owner. Bio a we all, of minority First

results see will our for but under it’s direct pickup in equity we So control. not our an that

comments, perspective, I year the a The highlighted enough first minimal my the But it manage just half anticipate see to business. right, that call of second we’ll piece clearly, as in from we is, LCFS sellers, in value. RIN be, the we and I’ll

our the latter to results half skewed will ‘XX. be So of

the of pending see we year. just EBITDA. to the people I mind. so things right in and important hopefully commented, And half continue, be the attributes So to adjusted to those unsold an will what’s keep as it’s of again, value kind stored I two to show both can environmental latter as monetized, in gas Again, of think adjustment

Adam Comora

to the be expenses current value able of just period up that to follow do that inventory. that. what holding credits want for inventory versus match I gas to credits of It’s the to that current in for holding in missing into in that producing, is key we’re period we’re are really and that We report expenses and do inventory. produced all gas that in us

Matthew Blair

flows would skewed it’s took follow the saying cash year, Ann, skewed. when mean when your I that it So right that to that be Is initially, skewed that sounds that would like will interpretation? to on the year, results actual of back be half said the that EBITDA you’re said up back the but just you you the that. half of be to

Ann Anthony

adjusted So, we no. value Again, back EBITDA. the adding in be will

reporting So in quarter. each be it we’ll

year, will lower it So may lower the to and show towards net cash half revenues the your skewed income. up be point in though latter of

Adam Comora

GAAP plan that’s EBITDA second smoothed it when an inventory. to and But we So adjusted report income, in you basis, operating monetizing it your the the out. on and gets RNG first the half RINs from balance will in be half of lower in once

Ann Anthony

Correct.

Jonathan Maurer

add that. gas, Good income to you just will as midyear, coming in as nice I'll the here, the Emerald Matthew, the well hear well. morning, substantial of with online from revenues, in you in EBITDA that, call pickup the second half And on project a year and see

Matthew Blair

And there where do guess, then about It Could follow looks renewable you as are, your little wasn’t a contract you the an risk just I up going portfolio. on that And view you power is renewed. like that? asset bit was talk forward? the

Jonathan Maurer

power to involve the keeping options life. fact the future and municipality than and the that they ended was do a projects open the take we decided right they anything our look -- guess, in and It to long future municipality did its those that that it rights what back, later of with terms the rights their Yes, term the on, have look. with in their pursuant gas at term gas the other municipality that wanted gas are, project to project was I remove might

Adam Comora

and looking we’d here when And just I can don't rights the you follow-up. think look have expiring. gas I'd any say at Jon I'm we across portfolio,

Jonathan Maurer

No, future. nothing in the near

Matthew Blair

thank you. helpful, Very

Jonathan Maurer

projects. natural that we we gas I'll these, longer that regard get price to build generally And with years or gas we that add and do projects when renewable are XX to those

other feature, see legacy don’t power affecting kind we that’s in of a future. renewal the projects going forward it near but So

Adam Comora

really would I Yes, that one off. one consider

Operator

question of comes Malloy Martin line next Johnson Rice. Our of from the

Martin Malloy

there? Slide I question for Could online, had cost -- on to side. to and path the a realize the revenue projects a those gas, around towards getting movement there you of you side, terms of about side to cost relative can maybe I the you on MMBtu. the maybe lot per where But is get and landfill coming the talk dollar expect dollar X and cost with MMBtu in per

Adam Comora

we say I'd MMBtu although, XXXX and some pressures, from changed some general Yes, has there in were have utility materially our costs general, what other cost talked inflationary about not escalated per in previously.

the productivity dairy. digits XXs drive in our our call landfill efficiencies single the to on trying our still to for low we production plants. are We and try and in of cost are on And in high somewhere output maximize business and, of it, always

historically. we we’ve a a So I’m we specific down costs But lot target think not from and what discussed give you to where been get don’t we material where on going we’ve of to. changes see can

Operator

Our next line William of UBS. the Grippin question comes from of

William Grippin

on SG&A already Appreciate maybe the all modeling first, embedded provided. just guide have any But the you've color you a have couple for adjusted EBITDA that could color more I you XXXX? that in the provide questions here.

Ann Anthony

of I detail to So think we of to level get actually that the don't want guiding there.

reasonable. level out I can in get our think to tried guidance. public want of appropriate to we’ve model you don't to I something company, and But think As first imagine, that’s year that we detail

William Grippin

pathway. pivoting just to So the eRIN

expect need clarity there come key OPAL? you or there that what gain for developments to the on that -- could how impactful be Just are to to

Adam Comora

see renewable could I be proposed not as say final in they electricity, Right super rule to from that used a level, high a included whether you fuel. the to transportation pathway. or we it’s as have as power now, use

delay quite frankly. So to first of order going June? that as a Second they -- may they and are of it, include order in business, here pathway

there’s to value, they But of assign lot little mechanics per a around, we around the RIN what of I many the think entire that necessarily which impacts be. for produce, who mechanics there's which is size and so are not will including lot lot RIN assigned a don’t the needs I of have value of of behind that it. are be the economics auto going is push bit the some the how who split but a chain of of or RINs generator is industry need some will that around questions the up. a whether momentum you that megawatt the over think a equivalency OEM have be lot of clarity much going questions to pathway, economics get then that generator how people the And the to on e-RIN credit.

also positive. take all a think and potentially And pipeline it’s RNG your potentially we So potential there’s the from some eRINs. really to create

clarity So flavor lot a level on. what we’re -- from but it little waiting to and in you for the there’s of some those just a give high nuances are, of

Operator

from comes question the next line Our of B. Pfingst of Ryan Riley.

Ryan Pfingst

in Maybe here. I’ll one sneak just

back contracts happening longer Are those be would to allowing expected like RVO of frame contract. what and time the comments multi-year today around entering your that? discussions potential term for into your the Going for

Adam Comora

obligated market They’re happening internally, of they’re happening We yet I happening start volumes are with things participants. those potentially they’ve other to set. say once the earnest with wouldn’t parties. in anticipate kinds would real begun

So back in the half that’s year. something that can we back report on the of

Operator

of line of the Our Tuohy next Craig Shere question comes from Brothers.

Craig Shere

is to on that or to PPA, years power off the all in the a three me that taker does that to help work? eRINs a maybe first, off So there can the case [Indiscernible] PPA own you that five how’s project does is work How biogas if understand, take. long term has it

Jonathan Maurer

So it varies.

do RINs the projects not. market, material the Some cases with that and from our And the in some sell projects been the will it find assigned through counterparties acquired third value for enable the otherwise substitute and where party participant carbon to commence to attributes we discussions a in is has potentially through either purchaser reps or this us power renewable eRIN. then gas all

pathway. bag that kind majority power the say getting it’s the see would I But mixed of eRIN renewable So pathway a into a our to there. out of we

Craig Shere

forward about least move landfill operators then reassessing contracts value were to you mean underlying be site the host? have allowing last call at they a projects afforded or the year to higher footprint, hiccup their be If for on new of talked this RNG reassessment the contracting. projects of perhaps And to does splits to and that or times in seems that of couple that thawing,

Jonathan Maurer

be. the to over people settled I that place the as And last right took of of all splits two. the what course think ought out to year or

has But open and the that in taken has And future. think pathwaying of I think and the is still see somewhat has I finalized as projects that that we recognized, will out there. for the some more signed, value some place. that near most of those shifted construction getting but putting dynamics been contracts into

Adam Comora

multiples a seen quick that ups Just change is, of One there. follow of in sort that couple look we rates changes royalty build haven’t of how sort us real any for and thing.

And how we’re a these documentation for documentation. moving six through at feel to we surprising like terms in maybe there, today and across that’s getting things ago in positive. we finish long things have really point these John’s So where it’s do really versus those little of gotten always about can take good on a months visibility we just line. lot the traction feel of And But things. some good

Craig Shere

really question. modeling And quick

you to the are you second potentially that which the at in after the prices pricing RINs how in banking do half, your higher firm adjusted EBITDA? sell you If report RVO assess

Ann Anthony

an time terms what and were assumptions of quarter, the think we each of get looks we are. our I that what updated prices probably make kind that in for pricing an market sensitivity we guidance. And around to with -- where as shared of we’ll terms value you through kind So of come QX, assumption we’ll in like at provide

Operator

Derrick from of Stifel. Our of comes next line the Whitfield question

Derrick Whitfield

Again, to broadly. on up landscape the competitive more to a on really ask ask elaborate you question I and the wanted follow last

for aware are do have on in your past the less environment an they last guys these operating the about of right observed levels unprecedented with In increased RNG view, now focus year value at your M&A imply how Seemingly, what do agile table the the downstream versus competitive transactions side TravelCenters’ you? business assets and there noted, over and we’ve for and periods. the you’re more alter the based As BP acquisition. potential recently of

Adam Comora

and there opportunities there’s integrated deployment of sort as the XX past made the And we’ve could model EMPs. fence and behind read A and sort been industry it’s player put acquired up how some price for some a ways side could is get lot is that that was engine I as And could it’s and open And how the other trucking -- acquisition we’ve look there. a and think think private from with a industry. grown vertically sort a of really in of vertically pretty something actually feel here and of and future major upstream bit seen Historically, have about see we validation We as be liter to these my this and to deployments Class obviously, kind interesting of perspective maybe well power fuels of BP downstream going that that that I a where other of dedicated M&A We And little we’ll has plays activity be. at logistics talked be seen, out. thought through of in organically. we players fueling. the some together new just integrated smaller opportunities interesting production a by a about I the into on fleets, couple think alternative well. what being

like feel we’ve at an for read together here we it’s Fuels. through So interesting what put OPAL

Jonathan Maurer

central continues now that, to financial those be continues in value and decarbonization the just towards move renewable well. could of I to and to players if players Derrick, fuels to as say, general, And pendulum the strategic

interest. we lot continue to a see And so of

the I the leaning kind and and towards people the making make and of like, it companies and see really opportunity. you of saying quarter-after-quarter they’re to opportunities to as to provide space are was a earlier, I that that to decision a country for future. moves in play decarbonization to continue this tough world that that of lot essential in sector growing are and going right As into the is feel companies then find the It’s how

Operator

time. back Adam going to further for over questions at closing I'm this to showing I’m turn no any the call remarks. Comora

Adam Comora

and XXXX a to great dialog. much day. engagement look in very year participation Have earnings OPAL for We continued forward call. your Fuels’ you Thank full

Operator

conclude for participating. and you this Thank conference. you. Ladies today’s all gentlemen, Thank does

great You disconnect. Have a day. now may

OPAL Fuels (OPAL) 28 Mar 232022 Q4 Earnings call transcript