Excelerate Energy - Earnings Call - Q1 2025

Executive Summary

• Strong quarter with broad-based beats: Revenue $315.1m, Diluted EPS $0.46, Adjusted EBITDA $100.4m; management raised FY25 Adj. EBITDA guidance to $345–$365m (from $340–$360m) on operating outperformance.
• Results exceeded S&P Global consensus: EPS $0.49 adjusted vs $0.40*; revenue $315.1m vs $207.9m*; Adj. EBITDA $100.4m vs $95.5m*; sequential strength driven by lower OpEx/SG&A and higher gas sales margin.
• Balance sheet and funding progress de-risk Jamaica acquisition: $619.5m cash, revolver upsized to $500m upon close; completed $212m equity offering and $800m 8% notes due 2030 to fund the deal and term loan repayment.
• Strategic momentum: credit ratings initiated (S&P BB+, Fitch BB); operational reliability >99.9%; newbuild FSRU Hull 3407 on track for mid-2026; Jamaica platform expected to be EPS/cash flow accretive upon close.

Note: Asterisked values are from S&P Global consensus.

What Went Well and What Went Wrong

What Went Well

• Raised FY25 Adj. EBITDA guidance to $345–$365m on a strong Q1 run-rate and cost control, excluding Jamaica contribution.
• Commercial/strategic execution: equity and debt raised to fund Jamaica; credit ratings established; revolver maturity extended and capacity increased to $500m contingent on closing.
• Operations: >99.9% reliability; CEO: “We delivered $100 million of adjusted EBITDA and $56 million of adjusted net income… driven primarily by our core regasification infrastructure business”.

What Went Wrong

• Expense timing benefited Q1; maintenance/OpEx expected to catch up in Q2–Q4, implying some back-half cadence normalization.
• Continued reliance on transactional gas sales for revenue uplift introduces volume/timing variability (though deals are fixed-margin/back-to-back); Q1 included Atlantic Basin deal and three cargoes (2 Asia, 1 Europe).
• Jamaica acquisition still pending close (Q2 target); integration and supply alignment require execution through closing.

Transcript

Operator (participant)

I'll now hand it over to your host, Craig Hicks, Vice President, Investor Relations and Strategy. Please go ahead.

Craig Hicks (VP of Investor Relations)

Good morning, everyone. Thank you for joining Excelerate Energy's first quarter 2025 earnings call. Participating on the call today are Steven Kobos, Chief Executive Officer, and Dana Armstrong, Chief Financial Officer. Also joining the call today are Oliver Simpson, Chief Commercial Officer, and David Liner, Chief Operating Officer. Our first quarter 2025 earnings results press release and presentation were released yesterday afternoon and can be found on our website at ir.excelerateenergy.com. I would like to remind everyone that we will be making forward-looking statements on this call that involve a number of risks and uncertainties. Our actual results may differ materially from those expressed in these forward-looking statements, and we make no obligation to update or revise them. Today's remarks will also refer to certain non-GAAP financial measures. We have provided a reconciliation to the most directly comparable GAAP financial measures at the back of the presentation.

Operator (participant)

With that, it is my pleasure to pass the call over to Steven Kobos.

Steven Kobos (CEO)

Thanks, Craig, and good morning, everyone. It is truly a pleasure to have you on the call with us today. Excelerate is off to a great start in 2025, and we continue to make progress on our strategic objectives. I know that many of you may be familiar with Excelerate. I also know that Excelerate is attracting the attention of a lot of new investors with our recent activities. For the new ears on the call and eyes on the deck, I want to touch on who we are as a company. Excelerate Energy is the global leader in floating LNG import terminals and downstream LNG infrastructure. We operate 10 FSRUs, which represents approximately 25% of the world's floating regasification capacity, and we have another FSRU under construction. We are an experienced operator, and we are expanding our LNG terminal presence in key natural gas markets around the world.

As a U.S. company with a global presence, we help countries enhance their energy security while supporting the transition to a lower carbon future. What sets Excelerate apart from an investment perspective? First, our business is predominantly supported by take-or-pay contracts. These give us the ability to generate sustainable earnings regardless of economic cycles. Second, we have a strong balance sheet that provides us with financial flexibility to execute our growth strategy. Third, by focusing on the last mile of the LNG value chain, we are strategically positioned to scale our business as new LNG supply arrives online in the coming years. With these attributes as a foundation, Excelerate is a great investment opportunity. On today's call, I'll go over several key highlights from the quarter and give an update on our strategy.

I'll hand the call over to Dana, who will discuss our financial results in more detail.

Q1 was another strong quarter for Excelerate. We delivered $100 million of adjusted EBITDA and $56 million of adjusted net income. The financial results we achieved this quarter were driven primarily by the strong performance of our core regasification infrastructure business. I touched on this earlier, but I have to emphasize our FSRU and terminals business is underpinned by a high-quality take-or-pay customer contract portfolio. This year, that portfolio represents over 90% of our estimated full-year adjusted EBITDA. The steady cash flows this business generates gives us a strong financial base and is the cornerstone of everything we do. Let's talk operations for a moment. On the operations front, our teams continue to make operational excellence a top priority.

We have an unwavering commitment to achieving high levels of reliability that helps us protect our revenue and consistently meet our customer commitments. During the quarter, our team continued to see operational reliability above 99.9%. This is simply outstanding. We exceeded all our primary safety targets as well. This reaffirms our commitment to safe and sustainable operations. In short, we have a great base business with best-in-class operations. Now let's turn to our growth strategy. Since last quarter, the Excelerate team has done a great job generating near-term value creation for our shareholders. We continue to advance our fleet asset optimization and expansion strategy. The construction of Hull 3407 remains on track for expected delivery in mid-2026. We continue to see great demand for Hull 3407, and we are in ongoing discussions with potential customers regarding the vessel's deployment.

The next construction milestone will occur in June when we launch or float the asset for the first time. Beyond ensuring robust support for our core regas business, we are pursuing strategic growth catalysts. Obviously, this includes our recently announced agreement to acquire an integrated LNG infrastructure and power platform in Jamaica. Let's talk a bit about our plans for Jamaica. In March, we announced that we entered a definitive agreement to acquire the fully integrated downstream LNG and power platform in Jamaica for a cash purchase price of approximately $1 billion. Under the terms of the agreement, Excelerate will acquire the assets and operations of the Montego Bay LNG terminal, the Old Harbor LNG terminal, and the Clarendon CHP power plant. These assets constitute Jamaica's sole LNG platform, encompassing its only two LNG terminals and the island's only combined heat and power plant.

This acquisition marks an important milestone for Excelerate in the execution of our downstream growth strategy, but most of all, it is an outstanding strategic and financial fit. Strategically, it aligns with our goal of investing in both LNG import terminals and complementary downstream infrastructure. It also enhances our aggregate long-term contract revenue and margins while diversifying our geographic exposure and customer base. Lastly, the integration of this downstream and last-mile infrastructure will secure accretive offtake that dovetails nicely with the Venture Global volumes in our LNG portfolio. In short, it is a big step forward. Beyond the strategic benefits, the addition of the Jamaica business will deliver significant near-term value to Excelerate and our shareholders. First, the transaction will be immediately accretive to EPS and significantly enhance our operating cash flow.

Second, it provides us with a contract portfolio of mostly investment-grade counterparties, including Jamaica Public Service Company, which is one of the largest customers on the island. In fact, on an enterprise level, it pulls our aggregate offtake profile to investment grade. Third, it will enhance our operational and financial profile. Finally, the acquisition is going to provide us with a new pipeline of growth opportunities in both Jamaica and the Atlantic Basin. This is a great business, and these are fantastic assets. We are excited to bring it into our portfolio and welcome the talented team of experts and professionals who have helped shape the LNG landscape in Jamaica. We are making good progress on integration planning and are on track to close this quarter. We are committed to working with the Jamaican government to ensure the transition is as seamless as possible.

In summary, I am pleased with where Excelerate is positioned today, and we are excited about the opportunities that lie ahead. With that, I'll turn the call over to Dana.

Dana Armstrong (CFO)

Thanks, Steven, and good morning. Excelerate delivered strong financial results for the first quarter. We reported adjusted net income of $56 million, which is a sequential increase of $10 million, or up 23% as compared to the fourth quarter of last year. Adjusted EBITDA for the first quarter was $100 million, up $9 million, or up about 10% versus the prior quarter. The sequential increases in both adjusted net income and adjusted EBITDA over the fourth quarter of last year were primarily driven by the timing of vessel operating and maintenance activities, as well as lower SG&A expenses. In comparison to the first quarter of last year, the increase in adjusted net income and adjusted EBITDA was due to the dry docking of the FSRU Summit LNG in the first quarter of 2024 and an increase in direct gas sales margin. Now let's turn to our balance sheet.

For the three months ended March 31, our total debt, including finance leases, was $677 million, and we had $619 million of cash and cash equivalents on hand. As of March 31, $350 million of undrawn capacity under our revolver was available for additional borrowings. In April, Excelerate entered into an amendment to its senior secured revolving credit facility. The amendment extends the maturity of the revolving credit facility from March 2027 to March 2029 and increases the total capacity available for borrowing from $350 million to $500 million. The amendment is contingent on the closing of the previously announced pending acquisition of the Jamaica business and the repayment in full of the existing term loan under the credit agreement. Also, in April, Fitch Ratings and S&P Global Ratings issued inaugural credit ratings for Excelerate Energy.

S&P has assigned an issuer and issuance rating of double B+ to the company, while Fitch assigned an issuer and issuance rating of double B. We are proud of our inaugural credit ratings. This achievement reflects our strong financial health and the stability of our take-or-pay business model. Now let's turn to a recap of our recent capital markets activity. We are pleased to announce that we have completed the equity and debt financing for our previously announced acquisition of the business in Jamaica. Early in the second quarter, we completed an equity offering of 8 million shares of Class A Common Stock at a price per share of $26.50 for $212 million of gross proceeds inclusive of the green shoe. Additionally, on May 5th, we closed on our $800 million offering of 8% senior unsecured notes due in 2030.

The equity and debt proceeds will be used to fund the Jamaica acquisition and to pay down the term loan under the credit facility. Now let's turn to an update on our financial guidance for 2025. Based on our first quarter results, we are increasing our previously communicated adjusted EBITDA guidance range for 2025. This guidance range does not yet reflect any incremental EBITDA from the Jamaica acquisition. For the full year, we now expect adjusted EBITDA to range between $345 million and $365 million. Excluding any additional capital expenditures related to the pending Jamaica acquisition, we reaffirm our previously announced guidance of maintenance CapEx and committed growth capital for 2025, which are expected to range between $60 million and $70 million, and $65 million and $75 million, respectively.

As a reminder, most of the committed growth capital this year is related to the milestone payments on our new-build FSRU, Hull 3407. We made a roughly $30 million milestone payment related to the keel laying of Hull 3407 in the first quarter. The next milestone payment of roughly $20 million will be made in late Q2 following the launch of the vessel. We will continue to provide updates on our committed growth capital estimates as contracts are executed with counterparties that drive incremental capital needs for 2025. With that, we'll open up the call for Q&A.

Operator (participant)

Thank you. As a reminder, if you'd like to ask a question, please press star, followed by one on your telephone keypad. If you'd like to remove your question, that's star, followed by two. Our first question for today comes from Teresa Chen of Barclays. Your line is now open. Please go ahead. Sorry, Teresa, your line is now open. Please go ahead.

Teresa Chen (Senior Analyst)

Sorry, can you hear me now?

Steven Kobos (CEO)

Yes, we can.

Good morning.

Teresa Chen (Senior Analyst)

Thank you for taking my questions. Good morning. On Jamaica, a two-part question. Can you remind us, what are the remaining steps to close the transaction at this point, given the target timeline of this quarter and less than two months left? In terms of your growth endeavors for these assets, you've outlined a variety of potential paths to growth. Now that we've had a bit of time to digest the news and take into account the evolving macro backdrop of both supply of LNG and demand for gas, what do you think are some of the lower-hanging fruit and projects, and what kind of EBITDA can they bring?

Steven Kobos (CEO)

Thanks. Thanks, Teresa. I appreciate all four questions. Good morning. This is Steven. In terms of closing, we're well into this. Obviously, we did our due diligence earlier in the spring before we closed, before we signed in March. These are just a series of, I do not want to say anything is routine, but just routine deliverables, consents. I do not see any major impediments there. We have confidence Seller will make good on those deliverables. That is why we are comfortable just expressing the confidence that you heard earlier. In terms of macro, I will just make a couple of comments and hand it over to Oliver and see if he wants to amplify. What we like about the Jamaica platform in particular is it does look like there are some lower-hanging opportunities there.

There are also some opportunities that, compared with the scale of what we've talked about before, are generally good opportunities that are of modest CapEx. We see that as being an incremental driver on why we like this deal. I'll let Oliver expand upon that, if you would.

Oliver Simpson (CCO)

Thanks, Steven. Thanks, Teresa. Yeah, I think for us, it's really the focus is on getting to close. I think post-close, you'll see us kind of communicate more on the growth strategy in Jamaica. Really, the way we see it is these are some great assets that we're acquiring on the island, and they create an immediate platform for growth. Just through those assets, we can do incremental gas and LNG sales, which is what we'll be looking to capitalize on upon completion. I also think Jamaica, just from its geographical location, we've talked about the sort of hub-and-spoke model. It's a fantastic hub and creates a platform to grow on in the region and look at other projects and other markets around there using these assets as the base for that. Yeah, we're extremely excited about the platform this creates for us.

As I said, we'll get this to close, and then we'll look to come and communicate more details on this with you guys.

Teresa Chen (Senior Analyst)

Thank you for humoring me. My first question, parts A through D. Second question on the new-build Hull 3407. Would you mind providing an update on the latest prospects in terms of finding a home for this asset as well as gas supply? How are market dynamics evolving for the potential economics that a new-build FSRU of this size, scale, and specificity can command?

Steven Kobos (CEO)

Teresa, I'll take that one just because I'm going to be careful about it because I welcome all our investors on the call, but those aren't the only people listening in on what our plans are. I'll just say that we are excited about it. It takes all of the lessons that we've learned over the past 23 years and applies to it. It's going to have best-in-class boil-off, just all kinds, which economically is huge. We are talking, we're in serious discussions on multiple fronts at this point, and people want it for all kinds of ways. We will not be hide-bound and insist that that come with LNG supply. It might with certain of the counterparties we're talking to. It might not with some others. We are leaving everything on the table, as we always do.

We don't like to limit ourselves in terms of the opportunity set on this massive TAM. I don't think I can say more without prejudicing our ability to continue in those discussions. I'll leave it at that, that there's intense interest. It's going to be the best asset afloat, and we're excited and can't wait to bring it home.

Teresa Chen (Senior Analyst)

Thank you so much.

Operator (participant)

Thank you. Our next question comes from Chris Robertson of Deutsche Bank. Your line is now open. Please go ahead.

Chris Robertson (Equity Research Anlayst)

Thank you, Operator. Good morning, everybody. Thank you for taking my questions. Steven, I just wanted to circle back on your comment related to the Venture Global volumes, which I guess for a phase two placements are expected by 3Q 2027. Could you just walk us through the available supply volumes that would be available upon closing of the transaction, presumably from 2Q this year through 3Q 2027? What does that look like? Does it create a situation wherein then your long LNG supply once the VG volumes come into play, or how should we think about that?

Steven Kobos (CEO)

Good morning, Chris. Thanks for joining us. It's always good to hear from you. I'm going to hand it to Oliver in a second. I would say, obviously, in terms of how the VG placement expansion volumes dovetail, they dovetail long-term perfectly. We're looking at 2021 years' contracts and extensions on the island. That base needs about 0.6, and as you know, MTPA and as you know, VG for us over almost the exact same length of time as 0.7. In the LNG world, that's almost a perfect match. We are getting a third-party non-NFE supply for some interim period of time. Oliver, you're going to have to help me out in terms of what we haven't closed yet. Obviously, I don't want to wrong-foot anything here, but you might talk to about that overlay if you would, please.

Oliver Simpson (CCO)

Yeah, I think we have not given specifics on the timeline. As you mentioned, Chris, our VG volumes are coming out in sort of 2027. There is some overlap between what we will be inheriting with the NFE transaction and those. I think that is obviously, we had these VG volumes prior to the Jamaica transaction. We were going to manage those within the portfolio. I think that continues to be the plan. As Steven alluded to, I think longer term, we see the tenure and the size of the volumes is a good fit for Jamaica and that potential growth there.

Steven Kobos (CEO)

Yeah, I think the one thing.

Chris Robertson (Equity Research Anlayst)

Yeah, it makes sense.

Steven Kobos (CEO)

Chris, it is worth saying nothing's changed about how we view commodities. I think we are almost alone in the space, and we try to be agnostic as to the price of commodities. We try to lock in fixed margins. We like to buy and sell in the same basin. What I can assure you is we'll bring that same philosophy that we always bring to all of this.

Chris Robertson (Equity Research Anlayst)

Okay. Yeah, makes sense. Follow-up question for me. This is more of a diving into kind of the hub-and-spoke type of model you've talked about a bit here. As you kind of look at the landscape of countries, especially in the Caribbean here, who are pursuing renewables, solar, wind, some intermittent type of power, wherein they may need the flexibility of LNG imports to have at least a baseload backup system that runs on natural gas. Is there an opportunity, you think, with the Jamaica asset as the base there to pursue maybe a little bit more flexible terminals that are smaller scale and seasonal in nature, much like you have in Argentina or Northwest Gateway, just something in that realm?

Steven Kobos (CEO)

Yeah, Chris, I love the question because you're going to the heart of why Excelerate is a good partner for the scaling of renewables. The poster child for that for us is our valuable partner, customer, Petrobras in Brazil. As you know, Brazil's, gosh, their hydroelectric power generation part of the mix is 80%. When you add their solar and wind, it's another 10% at times. You cannot be that dependent upon intermittency unless you've got that gas-fired power backup. I think that's going to be that's not just true of someone who's done a fantastic job of scaling renewable power generation like Brazil. It's going to be true of anyone who wants to be able to rely upon renewables. It has to be reliable. Also, you will have seen Chancellor Merz's government was just sworn in a couple of days ago.

I think it's why Chancellor Mertz was so keen to announce the amount of gas-fired power generation that Germany is going to be adding because it doesn't matter what your baseload is, if it's hydroelectric or wind, you still need a reliable backup to it. On a different scale, that same phenomenon is going to be apparent for anyone with these ambitions.

Chris Robertson (Equity Research Anlayst)

Thanks, Steven. I'll turn it over.

Operator (participant)

Thank you. Our next question comes from Bobby Brooks of Northland Capital Markets. Your line is now open. Please go ahead.

Bobby Brooks (Senior Research Analyst)

Hey, good morning, guys. Thank you for taking my question. First one for me is I was just curious what's driving gas sales up over $100 million two quarters in a row now. I was kind of expecting that to kind of continue to be a smaller number. So I was just curious kind of what's driving that.

Dana Armstrong (CFO)

Hey, Bobby, this is Dana. It's a couple of things. We've spoken previously about our Atlantic Basin deal that started in the fourth quarter and continued in the first quarter. That's part of that number. On top of that, we had three other cargoes, two into Asia and one into Europe. It's really those four items that are driving that number. We've seen good success there, and that's something that we expect to continue.

Steven Kobos (CEO)

I think.

Bobby Brooks (Senior Research Analyst)

Fair enough. Good. Helpful.

Steven Kobos (CEO)

I was just going to say, Bobby.

Bobby Brooks (Senior Research Analyst)

Fair enough.

Steven Kobos (CEO)

Oh, yeah. No, but once again, all those deals were locked in on a fixed basis. We like them, but we're not swinging for the fences there. That's just an example where we follow our philosophy and lock in either fixed prices or lock in same basin.

Dana Armstrong (CFO)

Yeah, that's a good point. All of those are back to back. As Steven said, that's our business model.

Bobby Brooks (Senior Research Analyst)

Got it. Really helpful color there. Thank you. Obviously, also, you guys have more dry powder now after raising some equity and increasing the revolvers. Could you just kind of discuss, and obviously, the opportunity set for growth in front of you is vast. Could you maybe just discuss the appetite for more growth CapEx this year after you finalize the Jamaican asset acquisitions?

Steven Kobos (CEO)

I'm going to hand it over to Dana, but you're exactly right, Bobby. We do have adequate dry powder for our growth ambitions. Dana, you want? We might as well speak to capital allocation, how we're thinking about it. I mean, priority does remain that.

Dana Armstrong (CFO)

Yeah, priority remains growth. I mean, obviously, we're really excited about Jamaica. It's a big M&A acquisition. We're excited about it. To Steven's point, we've still got plenty of capacity to fund additional growth. We have our new build being delivered in 2026. That's $200 million of CapEx that we'll use mid-next year, so about a year from now. We obviously have our projects in Vietnam and other markets. I mean, we're really pleased with where we landed. It was kind of a tough bond market, so we're really excited with where we landed. If you look at our net leverage profile on a pro forma basis, I think we're at like two and a half. That's without Jamaica. Once you layer in Jamaica and add that EBITDA and that cash flow, we'll be well under two and a half by the end of the year.

Plenty of opportunity to fund additional growth. As far as where's the growth going to come from, I'll turn that over to Oliver.

Oliver Simpson (CCO)

Yeah, I mean, I think we continue to look at the same pipeline, obviously, as we've been focused on Jamaica, but there's a pipeline of opportunities that we've continued to focus on on the side. We see the fundamentals are good for that. We see the LNG supply is coming online. We see that general interest. As Steven spoke to with seeing interest on the new build, we're seeing a lot of interest in the market, and we continue to be confident in these different growth opportunities we're looking at.

Bobby Brooks (Senior Research Analyst)

Perfect. Then just last one for me, kind of a broader question. Being a U.S.-based LNG company, that's been a nice edge for y'all. Now, with all the tariffs back and forth and some uncertainty, I think some people might first think that that changes that dynamic of it being an edge. I think that's not truly the case since you aren't an exporter of the actual molecule. Could you just discuss how U.S. international diplomacy has impacted or likely not impacted the forward growth opportunities for you guys?

Steven Kobos (CEO)

Yeah, thanks, Bobby. I'll take that one. This is Steven again. Look, short answer, in many ways, Excelerate's essentially tariff-proof. That's the short answer. The reality is we're not building a lot of we're not building anything in the U.S. that needs a lot of steel or aluminum. We're not sitting here like so many companies wrestling, "What's our EPC cost going to be?" or anything like that. What we do is overseas, we open up the downstream part of the LNG TAM. I don't see a lot of that impacting us at all. In terms of support for Excelerate, we are seeing that many countries that do have a balance of trade deficit are, in fact, quite anxious to rebalance that deficit any way they can.

Once you look around, I know you're dialing in from Minnesota, but Bobby, there's only so much corn that those countries can't import or wheat that they can't import. The only way they can quickly alter their balance of trade is through something like LNG. We think we're actually seeing a lot of countries anxious to import more LNG. Here's their pickle. If you don't have the import, the downstream infrastructure to do it, that tool is not available to you. Many people are waking up to the fact that they do need the infrastructure on this part of the value chain that we provide. I look for those tailwinds to continue for some time. We're going to do the best to be a good partner with any of those markets and help them achieve their ambition.

Bobby Brooks (Senior Research Analyst)

Very, very helpful answer. I appreciate the color. Congrats on another good quarter. I'll turn it to Q.

Operator (participant)

Thank you. Our next question comes from Wade Suki of Capital One. Your line is now open. Please go ahead.

Wade Suki (Equity Analyst)

Good morning. Thank you, Operator. Appreciate you all taking the question. Just sort of dovetailing on Bobby's question, I mean, it sounds like the anxiety, I guess, being felt by some of our trade partners is maybe perhaps pushing forward or accelerating, not intended, accelerating some of the opportunities out there. Is that a fair way to think about it?

Steven Kobos (CEO)

Good morning, Wade. Yeah, I do think that is a fair way of thinking about it. And I suppose I'd like to just lean in on this in that, yeah, those tailwinds are out there. But this is a reminder. I'm well aware of, gosh, how many of our colleagues out there in the public company marketplace are giving two sets of guidance or just lowering guidance based upon tariffs. So I'm proud that our base business model is one where we can confidently say that it is not impacted by tariffs and this predictability of these take-or-pay earnings. We have high confidence of continuing, and that's reflected in Dana's comments raising the guidance on our base business. If anything, this testing environment has just showed just how robust and resilient our base business is. Thank you for letting me have that plug.

Yes, those tailwinds are real and out there.

Wade Suki (Equity Analyst)

Great. Thank you. Appreciate that. Just switching gears a little bit. Any updates on your LNG vessel kind of conversion plans here? Where does that sort of fit in now with the Jamaica transaction coming up on close?

Steven Kobos (CEO)

Yeah, I will. Wade, I'm going to take that question as being one of, can we walk and chew gum? We definitely can walk and chew gum. I am going to toss that over to Oliver and David to some degree. I mean, we've had a number of discussions, and we have been advancing our engineering substantially. Let them elaborate on that, please.

Oliver Simpson (CCO)

Yeah. Hey, Wade, it's Oliver here. Yeah, I think we're in discussions with a few people. We've identified some candidates. I think we're getting pretty close to doing something. It's still, just to be clear, it's still very much in the plan to acquire an asset this year and then to do the engineering and to plan around the conversion. I think it's just going through the steps, but it's still very much on target for this year from our side. I think that's probably where I'd leave it at for now.

David Liner (CFO)

Yeah. On the engineering side, that's progressing really well. We plan to wrap up the kind of initial phase of engineering here middle of the year, and that'll give us good insight into those long lead items and, yeah, just help us get one step further down the road. All's on track.

Wade Suki (Equity Analyst)

Fantastic. Great. Thanks so much. I appreciate all the questions. I guess I'll see y'all in a couple of weeks.

Steven Kobos (CEO)

Thanks, Wade. Look forward to it.

Operator (participant)

Thank you. Our next question comes from Michael Siala of Stevens. Your line is now open. Please go ahead.

Michael Siala (Analyst)

Good morning. Just wanted to see if you could provide any update on Vietnam and what you need to see there before that MOU can move to some sort of binding agreement.

Steven Kobos (CEO)

Thanks, Mike. I think Oliver's going to weigh in there. We actually have two MOUs with two separate subsidiaries of Petrovietnam. I will say Petrovietnam's the constant there. That's the game in town. And we're striving to enhance that trust and relationship and add value for them in any way we can. I'll let Oliver elaborate on it.

Oliver Simpson (CCO)

Thanks, Steven. Thanks, Mike. Look, I think for us, we were just talking about the tariffs and the effect that has on some partners. I think in Vietnam, you've seen fairly publicly from the Vietnamese government, they've come out and talked about LNG as one of those solutions to their trade deficit. I think there's an intense focus there from them on this. We've been methodically sort of working our way through with our Vietnamese partners and going through this. Obviously, as Steven mentioned, we have these two MOUs with subsidiaries of Petrovietnam, PTSC, and PV Gas. A lot of ongoing discussions with them. We're seeing the momentum there. We're pushing to get something over the line. We'll come back when we can, but I think there's no definitive updates on this call.

We really like the tailwinds there and hope to find some deal space.

Michael Siala (Analyst)

Okay. Sounds good. I guess my second one's for Dana. Dana, you mentioned some of the timing issues that caused EBITDA to be a bit higher in the first quarter. You did increase the 2025 guidance a bit. Can you give us any idea how maintenance and operations will impact EBITDA over the remainder of the year? Just kind of looking for some general cadence on EBITDA over the course of the year.

Dana Armstrong (CFO)

Yeah. As you know, we do not guide to the quarters, but what I can say is that we do have a tendency at times to see some lumpiness in our spend related to vessel OpEx or vessel repairs and maintenance. That just depends on our schedules and what we are able to do quarter over quarter. Some of that overachievement that we saw in the first quarter was related to some of those costs pushing out to later in the year. Some of that overachievement was real cost savings. It is a combination of those things. We also had some lower SG&A costs in the first quarter, which helped us, which have been banked for the year. In terms of where we will spend and what we will spend on, I mean, we still stand behind our full-year guidance that we just pushed out.

We'll see some of that R&M catch-up over the course of Q2, Q3, and Q4. As a reminder, we're still on track to do the dry docks that we've talked about previously. Obviously, that's capital expenditures, those costs. That'll be in the third quarter for the Exemplar and the fourth quarter for the Explorer. We're still standing behind what we've said in our previous earnings calls on those items.

Michael Siala (Analyst)

Thank you.

Dana Armstrong (CFO)

Sure.

Operator (participant)

Thank you. Our next question comes from Zack Van Everen of TPH. Your line is now open. Please go ahead.

Zack Van Everen (Director in Equity Research Division)

Hi, Ollie. Thanks for taking my question. Just one for me. As we've seen international gas prices come down in the spot and the forward markets, have you seen an uptick in demand, whether it's for gas sales or more people coming to the table on the new build just around some of the developing countries that generally can afford more of the gas when it comes down in price? Just curious if you've seen a change in demand there.

Oliver Simpson (CCO)

Yeah. Good morning.

Yeah, Zach, I'm happy to talk about things long-term and short-term.

Yeah. Look, I think that's exactly right. I think a lot of these, especially developing world, a lot of these markets, affordability of LNG is a critical part for them. With this LNG supply starting to come on this year and 2026, 2027 through the end of the decade, that certainly provides them the comfort that the LNG will be there for those projects. I think we've definitely seen more interest on the back of that. I think that goes to the point earlier of we always say we're agnostic to the price of LNG. We want to open up these markets. In many ways, as the LNG prices return to sort of long-term affordable levels, this brings the buyers out of the woodwork. I think we're seeing that interest.

I think people are seeing that within coming to the market within the next year or so, it's also translating into interest to do relatively fast-track projects, which is what we're trying to look at.

Zack Van Everen (Director in Equity Research Division)

Perfect. Very helpful. I'll leave it there. Thanks, guys.

Operator (participant)

Thank you. At this time, we currently have no further questions. So I'll hand back to CEO Steven Kobos for any further remarks.

Steven Kobos (CEO)

I want to thank all of our analysts and investors on the call for your interest. You are going to see us out on the road. I think we will be out at a number of conferences this month and next month. We look forward to seeing as many of you as we can. Thank you.

Operator (participant)

Thank you all for joining today's call. You may now disconnect your line.