Marty Malloy

Marty Malloy asked about the timing of commercial contracts and revenue for the expanded desalination plant projects, which have shifted from 25,000 to over 100,000 barrels per day. He also inquired if TETRA plans to accelerate the bromine project timeline given increased demand and the deepwater market's anticipated return in 2027.

Answer

Brady Murphy, President, Chief Executive Officer, and Director, stated that the shift to larger desalination plants (100K+ barrels/day) is driven by data center demand, involving multiple parties and requiring additional engineering for economies of scale. He expressed hope for a data center desalination project to materialize in the first half of 2026, with first revenue from a large facility expected in 2027. Regarding the bromine project, Murphy confirmed it is schedule-driven, moving as quickly as possible, and remains on track for Q4 2027, with potential for slight acceleration but conservative estimates.

Marty Malloy inquired about the timing for finalizing commercial contracts for the larger 100,000+ barrel per day desalination plants, considering the multiple parties involved, and the expected timeline to revenue generation. He also asked if it makes sense to accelerate the bromine project's completion date given the ramp-up in demand and the deepwater market's return in 2027.

Answer

Brady Murphy, President, CEO, and Director, stated that customer priorities have shifted from 25K to 100K+ barrel per day plants, involving multiple parties like natural gas suppliers, midstream companies, power generators, and hyperscalers. He expressed hope that one of these data center desalination projects would materialize in the first half of 2026, setting up for first revenue from a large facility in 2027. Regarding the bromine project, Murphy clarified that it is schedule-driven, moving as quickly as possible, and currently on track for Q4 2027, with no intentional slowdown for cash flow pacing.

Marty Malloy asked about the company's strategy and potential timing for returning capital to shareholders, questioning if it might make sense to reduce CapEx spending to initiate a dividend.

Answer

Co-CEO Adam Comora emphasized that the company's focus is on maximizing shareholder value through disciplined capital allocation. While acknowledging a robust pipeline of projects with attractive returns, he stated the company remains flexible. He deferred a more detailed discussion to the upcoming Investor Day, highlighting that OPAL's business model will create future optionality for its discretionary free cash flow, which could be used for M&A, shareholder returns, or new projects.

Marty Malloy of Johnson Rice & Company L.L.C. asked if the recent improvements in round-trip efficiency and installation costs could be quantified in terms of LCOE or IRR for customers, and inquired about the ramp-up time for the second production line.

Answer

CCO & Interim CFO Nathan Kreger indicated the improvements could translate to a couple of percentage points on IRR for a typical project. CEO Joe Mastrangelo elaborated that while LCOS definitely improves, there is no single headline number as each project's economics are unique. Regarding Line 2, Mastrangelo confirmed it will ramp in the first half of next year, but the specific timeline is flexible and dependent on customer demand and capital allocation.