Noah Katz

Noah Katz inquired about SoFi's capital allocation strategy for 2026, considering the substantial capital raised, focusing on balance sheet growth versus other strategic opportunities, and the company's appetite for and considerations regarding M&A.

Answer

Chris Lapointe, CFO, highlighted SoFi's strong capital position (23% capital ratios, 1000+ bps above regulatory minimum), enabling both balance sheet growth with high-returning assets and continued LPB partnerships. Anthony Noto, CEO, discussed M&A, noting numerous opportunities but a high bar. He prioritizes acquisitions that accelerate growth in technology platform capabilities (e.g., wallets, stablecoin as a service, international expansion for SoFi Pay) and international licenses. Noto also mentioned interest in revolving credit card processing technology but indicated a preference for organic build-out for big business banking due to a lack of suitable acquisition targets, emphasizing that any M&A would need to be at the right price and accelerate growth beyond internal development.

Noah Katz, on for Jeremy Tonet, questioned how the McNeill Ranch will be integrated to achieve synergies and cut costs, and also requested an update on the desalination and mineral extraction projects.

Answer

President and CEO Amanda Brock highlighted that a key synergy from the ranch is the elimination of royalties on disposed volumes, a major operating expense. Regarding new ventures, she confirmed no revenue is expected in 2025, but progress continues on iodine and magnesium projects, and a key discharge permit application has been filed for beneficial reuse, with a draft expected by year-end.

Noah Katz, on behalf of Jeremy Tonet, asked about the company's capital allocation priorities for 2025, specifically stack-ranking M&A, dividend increases, and share repurchases. He also inquired about the future potential of desalination and mineral extraction projects.

Answer

Executive William Zartler reiterated a consistent capital allocation framework, noting that while accretive M&A is a priority, no targets have met their criteria. He added that a share repurchase program was passed on for now due to limited float. CEO Amanda Brock emphasized that while new ventures like industrial water are being explored, the core business remains the primary focus, and no other major projects are planned beyond those already discussed.

Noah Katz of JPMorgan Chase & Co. inquired about the components of the 2025 adjusted EBITDA guidance, asking if near-term growth opportunities like onshore regasification assets were included. He also requested details on the economics and target markets for the planned LNG carrier acquisition intended for FSRU conversion.

Answer

CFO Dana Armstrong clarified that the 2025 guidance is based on the core FSRU fleet and LNG supply optimization, and does not yet include uncommitted growth projects or the planned vessel acquisition. CCO Oliver Simpson added that the company is assessing multiple LNG carriers that would support near-term cargo optimization and serve as a future FSRU conversion candidate, with discussions ongoing.

Noah Katz of JPMorgan Chase & Co. asked about Excelerate's focus on growth opportunities beyond FSRUs, such as onshore regasification, and sought clarification on the reduced 2024 maintenance CapEx guidance and the outlook for 2025.

Answer

CEO Steven Kobos affirmed the company's 'agnostic' approach to LNG infrastructure, stating they are actively evaluating various solutions beyond FSRUs, referencing the Vietnam project as an example. CFO Dana Armstrong explained the lower 2024 maintenance CapEx guidance was due to the timing of cash payments for vessel upgrades, with some spending likely shifting into 2025. She confirmed that 2025 maintenance CapEx will be higher due to two planned capitalized dry docks.

Speaking on behalf of Jeremy Tonet, Noah Katz asked for more details regarding the Veolia lawsuit and how the company plans to use the $19 million received for legal fees. He also requested more information on the $85 million investment in water infrastructure, specifically the benefits of the new integrated system.

Answer

Brendan Krueger, CFO of Antero Midstream, stated that there were no additional disclosures on the Veolia lawsuit beyond the 10-K, as the appeal process is ongoing. He indicated that any cash received would likely be allocated to debt reduction and share buybacks. Regarding the water investment, he detailed that the project will create an integrated system in the southern Marcellus, enabling capital-efficient development for AR and leveraging AM's existing infrastructure.

Noah Katz, on behalf of Jeremy Tonet, inquired about the financial impact on Antero Midstream (AM) from Antero Resources (AR) deferring well completions from 2024 into 2025. He also asked for clarification on the number of wells needed in Q4 to meet guidance and the potential water service capacity if a second completion crew were added.

Answer

Brendan Krueger, CFO of Antero Midstream, explained that the deferral would impact 2024 EBITDA by approximately $10 million, primarily from water services, but would not materially change the 2025 outlook. He clarified that one completion crew typically delivers 75,000 to 80,000 barrels of water per day, and a recent move to an e-fleet caused a temporary ramp-up period in Q3.

Noah Katz, on behalf of Jeremy Tonet from JPMorgan, asked about the opportunity set for future M&A in Europe and the Caribbean and requested an update on the crude and produced water joint venture with Energy Transfer (ET).

Answer

Chief Operating Officer Karl Fails detailed Sunoco's M&A criteria for international deals, including stable cash flows, synergy potential, and valuation, noting that Europe and the Caribbean remain areas of interest. Regarding the ET JV, he expressed satisfaction, noting sequential growth from Q3 to Q4 and expecting the value from the combined systems to become more apparent throughout 2025 as integration activities are completed.

Noah Katz, on behalf of Jeremy Tonet, asked about Sunoco's capital allocation priorities, specifically weighing share repurchases against dividend increases and leverage reduction, and also requested initial thoughts on Fuel Distribution trends for 2025.

Answer

Executive Scott Grischow explained that after successfully reaching the 4x leverage target ahead of schedule, the primary focus shifts to returning capital to unitholders through multi-year distribution increases and reinvesting in accretive growth projects, which are seen as providing better returns than unit repurchases. Chief Commercial Officer Austin Harkness added that he expects refined product demand in 2025 to be similar to the past year, with the company well-positioned to capitalize on various market conditions, whether demand is flat, weak, or strong.

Noah Katz requested a walkthrough of expectations for EBITDA and costs for each quarter of 2025 to understand seasonality. He also asked if the recent trend of approximately $100 million in quarterly repurchases could be exceeded in 2025 or if it is expected to remain consistent.

Answer

CFO Jonathan Stein outlined the typical seasonality, with costs lower in Q1 and peaking in Q2/Q3, while volumes are expected to grow steadily quarter-over-quarter. Regarding repurchases, Stein stated to expect 'multiple repurchases per year' but clarified the recent $100 million buyback was more of a 'catch-up for Q4' 2024. He emphasized that the $100 million figure is not 'set in stone' and the pace for 2025 will be determined throughout the year.

Noah Katz asked about the current macro trends in the Bakken basin and the long-term growth expectations for oil, gas, and water. He also requested a framework for thinking about the 2027 Minimum Volume Commitments (MVCs) in light of the new gas plant.

Answer

President and COO John Gatling stated that while basin-wide oil production is expected to be flattish, gas volumes are projected to grow, and HESM's systems will see growth across all commodities due to its prime acreage. CFO Jonathan Stein noted that 2027 MVCs will be released in January, explaining the new gas plant is designed to support sustained growth throughout the decade rather than causing a single-year spike.