Q3 2024 Earnings Summary
- Excelerate Energy plans to acquire an LNG carrier in 2025 and convert it to an FSRU to serve smaller send-out customers, which will accelerate project deployment and open new markets. While preparing for conversion, the LNG carrier can be used to generate revenue through trading spot cargoes, optimizing asset utilization. ,
- The company has signed midterm agreements for LNG purchases and sales totaling approximately 0.65 million tons, with locked-in margins based on a major European natural gas index. This enhances their supply portfolio and supports the acquisition of an LNG carrier for growth projects. ,
- Excelerate Energy is actively pursuing inorganic growth opportunities that could provide near-term value before 2026, leveraging their strong financial position to act on opportunities that add immediate value.
- The company expects maintenance CapEx to increase in 2025 due to two dry docks, which will lead to higher expenses and potential off-hire impact of 40-50 days per vessel, negatively affecting earnings. Dana Armstrong stated, "we do expect our maintenance CapEx will go up because of the two capitalized dry docks... we'll incur an off-hire impact for the time that the vessels are in dry dock".
- The newbuild FSRU vessel scheduled for delivery in June 2026 does not have confirmed deployment or contracts, creating uncertainty about its earnings contribution and potential idle time. When asked about the vessel's deployment, Oliver Simpson said, "we're not going to go into the specifics of commercial discussions... we'll come back when we can say more on specifics".
- There is uncertainty and potential delays in the FSRU conversion projects, as management could not provide exact timelines or specifications. David Liner mentioned, "until we have our hands on that asset and have fully flushed out the specification, don't feel comfortable speaking to the exact time line".
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Growth Opportunities Outside FSRUs
Q: Are you still focused on growth beyond FSRUs?
A: Yes, the company is pursuing opportunities outside of FSRUs, including investing in assets and infrastructure for onshore regasification efforts with smaller players. They are progressing these efforts to meet the pressing global need for affordable LNG. -
2025 Maintenance CapEx Outlook
Q: Why decrease maintenance CapEx guidance, and outlook for 2025?
A: Maintenance CapEx guidance was slightly lowered due to lower spending than expected, mainly from timing of payments. For 2025, maintenance CapEx is expected to increase because of two capitalized dry docks planned for the second half of the year. More details will be shared in February. -
Growth Drivers Before 2026
Q: Any growth drivers between now and mid-2026?
A: The company is exploring opportunities that could impact earnings before 2026, including potential inorganic growth opportunities that could add near-term value. They are in a strong financial position to act if the right opportunity arises. -
Conversion of LNG Carrier to FSRU
Q: How quickly can you convert an LNG carrier to FSRU, and what projects would it fit?
A: The conversion timeline depends on the vessel and specifications but is roughly one year less than a newbuild. The converted FSRU would serve smaller projects and be versatile for various markets. Having the carrier allows them to start engineering and procurement while also trading the asset in the meantime. -
Using LNG Carrier Before Conversion
Q: Can the LNG carrier deliver LNG while preparing for conversion?
A: Yes, they can use the LNG carrier to deliver LNG volumes to current infrastructure while doing engineering and ordering long lead-time items for conversion, optimizing asset utilization. -
Newbuild FSRU Deployment and EBITDA Impact
Q: Will the newbuild FSRU generate EBITDA soon after delivery, and exceed current fleet?
A: The company is excited about the newbuild FSRU arriving in June 2026. It is the only newbuild FSRU contracted without a long-term contract, making it a unique asset with significant potential. They are optimistic about its prospects but are not disclosing specifics on deployment and EBITDA at this time. -
Acquisition and Use of LNG Carrier
Q: Do you have supply secured for the new midterm agreement, and will you acquire an LNG carrier?
A: Yes, they have a locked-in margin on the purchase and sale under the new multiyear agreement. They plan to acquire an LNG carrier, which can be used to service the contract and optimize their commercial business, including spot charters.
Research analysts covering Excelerate Energy.