Montauk Renewables, Inc. Q3 FY2024 earnings call

• Commended operations staff for production levels despite severe weather events in Houston facilities, which account for over half of RNG production, with production losses estimated at ~100,000 MMBtus in first 9 months of 2024 but preserving employee safety and equipment operability.
• Development activities: Second Apex RNG facility on schedule for 2025 commissioning due to gas rights trigger; Blue Granite RNG project delayed to 2027 due to utility remediation prioritization for Hurricane Helene; Bowerman Landfill project in CA faces potential commissioning delays from landfill proposed changes; CO2 development with European Energy expects commissioning in 2027 with $65-$75M investment; Montauk Ag Renewables project in NC has interconnection construction starting in 2024; landfill-driven delays of wellfield projects impact production timing through 2025.
• Revenue aspects: Pathway provider agreements expiring end 2024, current renewals at higher percentages than historical, considering fixed price contracts to mitigate impact of pathway percentage increases.

Renewable Natural Gas Segment

• Third quarter 2024 RNG production was approximately 1.4 million MMBtu, flat compared to third quarter 2023. Revenues from this segment in Q3 2024 were $61.8 million, an increase of $10.8 million or 21.2% compared to Q3 2023. Operating and maintenance expenses for RNG facilities in Q3 2024 were $12.6 million, an increase of $0.7 million or 5.6% compared to Q3 2023. Operating income for RNG in Q3 2024 was $33.6 million, an increase of $9.6 million or 39.7% compared to Q3 2023.

Renewable Electricity Segment

• Third quarter 2024 renewable electricity production was approximately 41,000 megawatt hours, a decrease of approximately 7,000 megawatt hours or 14.6% compared to Q3 2023. Revenues from renewable electricity in Q3 2024 were $4.2 million, a decrease of $0.6 million or 12.3% compared to Q3 2023. Operating and maintenance expenses for renewable electricity generation in Q3 2024 were $2.7 million, an increase of $0.5 million or 21.8% compared to Q3 2023. Operating loss for renewable electricity in Q3 2024 was $0.6 million, a decrease from operating income of $0.7 million in Q3 2023.

• Full year 2024 RNG production volumes expected to range between 5.5 million and 5.7 million MMBtus, with corresponding revenues between $175 million and $185 million.
• Renewable electricity production volumes expected to range between 180,000 and 185,000 megawatt hours, with corresponding revenues between $17 million and $18 million.
• Note that near-term market trends affecting offtake pathway sharing and fixed price agreements may impact 2025 guidance for RNG revenues.

• Severe weather events causing multi-day utility outages in Houston facilities, impacting RNG production.
• Delays in utility upgrades for Blue Granite RNG project, pushing commissioning to 2027.
• Potential impacts from Orange County Waste and Recycling's proposed changes to Bowerman Landfill project, affecting commissioning schedule.
• Landfill-driven delays of wellfield projects in active waste placement areas, impacting production timing through 2025.