NET Power Inc. (NPWR) Earnings Call Transcript

Joining us today are Danny Rice, our Chief Executive Officer, and Marc Horstman, our Chief Operating Officer. We released our earnings results for 2025 yesterday, together with a refreshed presentation; you can find both on the Investor Relations site at ir.netpower.com. Things we say on this call could contain forward-looking statements. Because of risks and uncertainties tied to our business, actual outcomes might differ materially from what those forward-looking statements state or imply; our SEC filings cover these risks and uncertainties. Also, we take on no duty to update any forward-looking statements. Having said that, I'll turn things over to Danny Rice, Chief Executive Officer of NET Power Inc.

Appreciate it, Bryce. And thank you, everybody, for being with us on today's call; we'll be walking through several slides from our most recent Investor presentation; so please keep that within reach and follow along. Once we finish our prepared comments, the line will be opened so analysts can ask questions. We'll begin on Slide three, where we discuss our mission. So in 2021, the team at Rice Acquisition Corp. Two, myself included, observed that baseload power generation had suffered a significant lack of investment across most of the decade before that. Three factors together really caused this. First, a widespread societal wish to decarbonize. Second, quite attractive subsidies for renewables, which turned these intermittent power sources into highly economic things to build; and third, our grid system was in very good shape and didn't seem to require extra baseload generating capacity. Load growth had gone flat; intermittent renewables could take the place of the baseload capacity we already had, and everything would be fine. What that perspective overlooked, though, was the fact that eventually we would have to swap out this country's aging set of baseload plants. Across the U.S., the typical active coal, gas, and nuclear facility has been running for more than 40 years. And we figured out that under a load growth scenario, one that all at once pushes an industry that has sat dormant throughout the past decade to start construction again, and to do that within a regulatory climate that keeps making it harder, pricier, and slower to build anything, we would find ourselves in a bit of a bind. Sadly, that is exactly where we are now in North America. For the first time in quite a while, demand growth for power is unprecedented, mostly because of artificial intelligence and data centers, plus reonshoring of U.S. manufacturing and rising residential demand for electricity. So the real question becomes, how do we reconcile the wish to cut emissions with keeping access to affordable, reliable energy? Companies that innovate on supply-side decarbonization solutions without hurting energy affordability or reliability will provide that answer. When the average person hears clean power, they picture nuclear, hydro, geothermal, wind, and solar; yet the metrics that truly count are carbon intensity, land intensity, water intensity, and air quality. Those can be measured. And even more importantly, they don't favor any particular energy type. So we adopted a rather contrarian stance, rooted in science and economics, which held that natural gas can and should deliver the cheapest clean, reliable power. Yes, technologies must be advanced for that to happen, but every other energy form needs the same in order to provide the energy trifecta: clean, affordable, reliable power; we held that belief then, and we hold it now, that natural gas will provide the cheapest clean, reliable, affordable power. And NET Power Inc. Its distinctive purpose—turning natural gas into the cheapest kind of clean, dependable firm power—has made it stand apart, and we concluded that carrying out that purpose where everyone can see it mattered, so we could teach people and contribute to the sweeping change in how natural gas is viewed: the cleanest, least expensive source of baseload electricity. So both the industry and we at NET Power Inc now sit at a genuinely decisive juncture; one option is to keep directing our limited resources—specifically our financial capital and our human capital—toward the same work all of us have done for the past ten or twenty years, and the other is to pause, rethink, and point those resources at answers to what the world genuinely requires going forward. According to the market, the most valuable answers are reliable, scalable power that can be brought online as fast as possible. This isn't only the hyperscalers making that claim; it's also local communities and grid operators, who grasp that unless we add new generation quickly enough, ordinary Americans and small businesses will face sharply higher power costs. The federal government, too, views falling behind in the AI race as a threat to America's very existence. What ties all these cases together is how quickly we can build reliable, scalable power; and should that power also be clean, that's a bonus on top. With anything involving power, a bonus means nothing without the main thing. Reliable, affordable power is that main thing, as the saying goes. In my view, this is turning into an arms race over AI, and for the energy industry this truly is a moment that demands action. If your company can design, build, and operate power plants safely and on schedule, you ought to do so. If you can obtain the natural resource inputs and outputs needed for generating power, my view is that you should look for ways to put them toward power. If you understand where and how to do that while limiting environmental harm, those resources definitely ought to be given priority. That is the decisive juncture we at NET Power Inc truly face. One path is to keep our heads down single-mindedly and prove out our oxy-combustion technology, which I'd call a deeply worthy path and, in our view, the correct power solution over the long run. The other is to take our distinctive, valuable resources and capabilities and get ready to direct them toward nearer-term opportunities that are more urgent and more valuable—ones already shown to succeed, which would help finance our long-term ambitions in a way that benefits our shareholders more. The shift we'll talk through with all of you today remains faithful to our mission: turning natural gas into the cheapest form of clean, dependable power, at a price people can manage, with a level of reliability we cannot afford to give up. And like I said earlier, getting to market fast matters more than anything. Our industry can't sit around waiting five, seven, or even ten years for the next generation of capacity. We have to start construction right now, because that's what's best for our shareholders, for the customers we hope to serve, and for the communities seeing rising power demand. That's exactly our plan. We'll do it the right way, but we won't hesitate. Now, if you'll look at slide four. On past calls we've pointed out that through the rest of this decade, the power industry will confront load growth unlike anything we've seen, driven by AI and data center build-outs. For every reason I've already given, the market has swung hard toward natural gas. Conventional gas turbines, reciprocating gas engines — every one of them is being brought online as fast as possible to serve data center needs. Here in the U.S., we're extremely lucky to hold more than fifty years of ultra-low-cost natural gas reserves. In fact, here in the States we basically quit looking for new gas many years back, purely because we already have such a deep inventory of proven reserves spanning the big sedimentary basins, from Northeast Appalachia down to Texas and all points between. No other nation on earth has energy resources quite like ours. Unlike China, India, or most of Europe, America doesn't really have to chase new energy sources today.

We possess the cheapest energy available that will serve us for a great many decades ahead. The real question we must pose to ourselves is this: are we pushing these alternative energy sources forward because we require the energy, or are we doing so in order to lower emissions? Nuclear is likely the best illustration. It carries tremendous long-term potential, yet it isn't strictly required to satisfy our energy demands at present. Nuclear becomes more competitive in regions facing energy shortages right now, and even more so in those lacking natural gas. Europe springs to mind. But that doesn't apply here in the U.S. If the U.S. possesses enough inexpensive gas to serve the AI industry, can we push forward the technologies that lessen natural gas's environmental footprint? Well, if you believed we wouldn't need to construct additional gas-fired power generation, you likely wouldn't give CCS any thought. Yet here we stand at the early phases of a natural gas power super cycle, and I believe people are only now starting to recognize how relevant and important CCS is. Take Google, for instance — it recently signed the industry's first power offtake for a gas plus CCS project in Illinois. Our view is that with the right projects in the right locations, many more should follow. Gas plus CCS has the potential to be substantially cheaper than any other scalable clean, firm power option. That has always been our thesis, and we believe it is on the verge of unfolding exactly that way. So signals are starting to take shape indicating that natural gas paired with CCS is gaining acceptance. This is purely because natural gas power generation is rapidly being recognized as the sole scalable power option capable of being deployed on the hyper-accelerated timeline required to satisfy the accelerated demand for 24/7 power. So let's turn to slide five and discuss the measures we're taking to best position our company for success. We could label this a business expansion; we could label it a pivot. But ultimately, it's truly about concentrating our resources on actionable opportunities to convert natural gas into clean, affordable, reliable power. Throughout the past decade, we at NET Power Inc. have assembled an outstanding team of technical leaders to develop our oxy-combustion power generation technology. This is arguably among the most challenging and promising technologies within the energy sector, second probably only to nuclear fusion in both complexity and potential. And while the team has been working diligently to design, develop, and refine our technology both in the lab and at our pilot plant in La Porte, Texas, we've been putting together a small portfolio of ideal locations to site these NET Power Inc. projects. You can really observe that at the bottom of this slide. We truly view this as setting the table for successful future commercial deployments. So within NET Power Inc., we hold a very solid grasp of where our projects, where these NET Power Inc. Projects truly deliver strong returns in some cases, and in others they don’t. For most to be financially viable, three factors are essential. First, you must have gas available, and cheaper is always preferable. Second, you need to be close to a top-tier carbon sink. When transport and sequestration costs are lower, the power economics improve. If a buyer can be found for the CO2 for some industrial purpose, that’s even more advantageous; it ultimately translates into reduced electricity prices. Then there’s the matter of being near transmission lines with high capacity. Across North America, the best blend of these elements I just described tends to fall within deregulated, competitive electricity markets, where anybody capable of building, owning, and running a plant is free to do so. So over the past two years, we put together a few excellent sites whose main purpose was to demonstrate and bring to market our first NET Power Inc. installations. Since our intention had always been to license our oxy-combustion technology, we saw little reason to keep locking down more top-tier sites in these regions and elsewhere; but I’ll circle back to the bottom of this page shortly. Among the challenges we’ve encountered at NET Power Inc. is the escalating expense for our inaugural facility and the discovery that it would cost far more than we had initially expected; and we’ve reached the difficult conclusion that attempting to finance and then construct a $1.7 billion 200 megawatt first-of-a-kind plant prior to finishing all our testing is an unlikely outcome. At best, we’d be targeting a COD for that initial plant in 2030 or 2031; yet considering the ongoing inflation we’re observing in the industrial sector, in the energy industry sector, those expenses might be greater in a few years; so we can either stay focused and keep putting 100% of our capital toward advancing our oxy-combustion technology, which we strongly believe can be the correct long-term answer, or we can reduce that spending to unlock some of our resources for near-term value-generating opportunities. We aim to deploy our capital responsibly in a way that boosts shareholder value and matches our mission. The moment we find ourselves unable to do so will be the moment we give that capital back to shareholders. But that moment isn’t now. I’m genuinely thrilled to discuss the right side of this page for several reasons. Standard gas power paired with post-combustion carbon capture technology, or PCC for short, the conventional power portion of the facility, gas turbines and gas engines, are established, bankable technologies. The other portion of that setup, the PCC side, has likewise been demonstrated, yet it hasn’t been broadly implemented or as rapidly as it ought to be. And it isn't really a tech problem—it's come down to economics and timing. Getting permits for sequestration wells can drag on forever. Permits for new CO2 pipelines can also take ages. And in places where moving and storing that CO2 doesn't make financial sense, or where the power project underneath doesn't run enough hours to warrant spending capital on PCC, then in those cases putting in PCC simply isn't economical compared with building a straightforward simple cycle or combined cycle plant. Yet once we all start witnessing real backing for new 24/7 power, plus the premium the market will pay for clean firm power, PCC turns quite compelling in the appropriate geographies. So for our company, and for everybody else in power and data centers right now, being fast matters above all. In our view, gas turbines paired with PCC can and ought to be the quickest to reach market and the most cost-competitive clean firm option we can offer prospective customers. That's why we reached out to the Entropy team during the summer and talked about how we might collaborate to speed up clean gas project deployment across the U.S. Entropy—I'll get into them on the next slide—is headquartered in Canada. They fly somewhat under the radar down here in the States, yet they operate the sole natural gas CCS facility running in North America, and it's been up and running for several years now.

They’ve optimized their solvent blend for capturing carbon from natural gas. Across both of our organizations, we saw a chance to pair NET Power Inc.’s strengths in power generation and site origination with their PCC expertise, which would speed up the rollout of clean gas power projects across the U.S. That brings me back to the bottom of the page. A key near-term commercial synergy we can capture alongside Entropy is being able to move faster in deploying their technology at NET Power Inc. locations—beginning specifically with our Project Permian site in West Texas, plus our second originated site in the Northern MISO region. In my view, both of these locations are excellent in their own way. Our West Texas project genuinely could become the lowest cost clean firm power project in North America; for phase one, we’re aiming at an LCOE under $80, and under $70 per megawatt hour when we scale to 300 megawatts and beyond. At our Northern MISO project, we can bring much-needed 24/7 power onto a grid that isn’t getting enough new baseload power into the queue—and beyond that, no new clean firm baseload is showing up at all. So by leveraging the sites we already have, we can immediately deploy as much as 600 megawatts in these key power markets, with the potential for even more via extra interconnect upgrades or behind-the-meter colocation; and under this exclusive partnership, both we and Entropy will be able to co-invest in the equity of the projects we develop. So what this partnership is really about is building high-quality, clean firm power projects in markets that place value on 24/7 clean power, and doing it on a faster timeline. Over the next several months, we’ll run several work streams in parallel with the Entropy team. First, we’ll finalize the definitive documents for the LOI. Second, we’ll complete technical diligence to fully confirm this is the right path. We’ll also finish design work for our first project, which Marc will discuss in some detail; it’s worth noting that if we decide to complete this transaction, we’ll make a small strategic investment into Entropy to help fund their ongoing business and technical work supporting our joint development. I should also say there’s no binding obligation on our side or Entropy’s side to consummate the transaction. But as we sit here today, assuming everything keeps following the progress we’ve made so far, we expect to finalize the JV in 2026, alongside preparations to FID phase one of our West Texas project. So when we step back and consider what NET Power Inc. is becoming, we remain a company with a single mission: transform gas into the lowest cost form of clean, firm power. But rather than having only one solution for doing that, we now can have two. And with a market right now that's focused on the very near term, on power that's scalable and dependable, yet still has a cleaner final state in mind, we believe having a high-impact, deployable answer available right now to go alongside our revolutionary long-term patented product is the best possible setup for our company, for our shareholders, and for our future power customers. Moving to Slide six, we wanted to give a quick summary of the landscape for our new product portfolio, which genuinely has developed to put priority on speed to market and technology readiness. To sum up, we have a technology in oxy-combustion, the top line, that resembles new nuclear quite closely. Ready during the 2030s, an LCOE in the mid one hundreds, with a pathway to an LCOE below $100. Or even lower, with an extremely low environmental impact. That technology stays in our arsenal, and we will methodically move its development forward on the appropriate timeline; but then if you skip down to the bottom of the slide, that's where we'll be with Entropy today. Conventional turbines with capture, technologies that are proven, ready for deployment today, in the right areas, areas under our control with very compelling breakeven economics. Our view is that this can be the most competitive near-term solution the market needs. Now. So moving briefly to Slide seven, I wanted to give a brief overview of Entropy. As I said earlier, we've signed an LOI to partner with them. To deploy its proprietary amine-based solvent, solution for the build-out of clean firm power in the U.S. Entropy is headquartered in Calgary and has a world-class ownership group that includes Advantage Energy, Brookfield, and the Canada Growth Fund. They run the world's first and I believe it's the only natural gas facility equipped with post-combustion carbon capture and sequestration at the Glacier gas plant in Alberta, which has been running consistently since 2022. 90% of CO2 emissions associated with gas power generation, we place it at the highest level of technology readiness, a TRL nine, which lets us develop and deliver clean power hubs before this decade is over. We're genuinely excited to work with the Entropy team and get these clean firm power projects off the ground quickly because that's what the market wants. The Entropy solution combined with our power generation knowledge and product approach, allows us to deploy a clean natural gas-fired solution meeting the current market demands. I think it would be helpful if we could share some of the early work we've already been doing around this program and these projects; so with that, I'd like to turn the call over to Marc Horstman, NET Power Inc.'s Chief Operating Officer.

Appreciate that, Danny. On slide eight, you can see how we plan to take advantage of infrastructure already in place from our permitting work to build our inaugural clean power hub. There, we're getting ready to install gas turbines equipped with post-combustion capture in a modular, scalable setup. This location offers a route to eventually bring as much as one gigawatt of capacity online as we grow over time. We're making use of the land position we already hold at Project Permian, close to Midland Odessa. Phase one is built around a 60 megawatt module, with a defined path to expand to one gigawatt as demand and offtake agreements mature. Relevant Power Solutions, or RPS, is preparing our gas turbines for Phase one. Entropy's proprietary amine solvent technology will handle carbon capture, and it's engineered to reach CO2 capture rates above 90%; on the commercial front, we've already started positioning this project for a successful FID in 2026; we've agreed indicative terms with Oxy to buy 30 megawatts along with 100% of the captured CO2 through a long-term agreement. And with another major oil and gas off-taker, we're in advanced talks regarding the remaining capacity. A key benefit of this project is that we can rely on Permian infrastructure that already exists. We've got the land, the interconnection, the gas supply, and the offtake locked in. That foundation lets us deliver clean firm power by pairing gas that RPS prepares with PCC technology from Entropy. Versus starting from scratch on a greenfield site, this approach means we can move faster and spend less. It also cements Project Permian's position as a platform we can repeat and scale as we build out. On the schedule we're working with right now, we're targeting a final investment decision in 2026. Should that come through, shovels hit the ground in 2026, and we'd expect commercial operation in 2028 or 2029. The structure we've chosen for this project will put on display how fast, how repeatable, and how commercially durable our clean power product is over the long haul. Those are essential milestones on the path to a gigawatt-scale presence in the Permian. Let's turn to slide nine. Slide nine covers what's happening in our development pipeline. I want to bring everyone up to speed on the Northern MISO project — the clean firm power build-out that comes after Permian and ranks as our next big one. That effort is still tracking to plan. Commercial operations are what we're targeting, with a window of 2029 to 2030. The site has been secured, and we're collaborating intensively with a partner based locally on developing carbon capture and sequestration. That collaboration is central to everything we're doing, because the project should depend on Class six sequestration to store CO2 over the long term. As things stand, our partner has two Class six well applications in hand, and both are still on pace to receive permitting in 2028. Similarly to what we're doing in the Permian, Phase one at this location is being engineered around gas turbines combined with Entropy's PCC technology. We're aiming for a final investment decision in 2027, with commercial operations potentially beginning as soon as 2029. NET Power Inc. is currently in active talks with strategic off-takers regarding the electricity generated at this site. Taken together, MISO is progressing as a foundational location for our next phase of expansion. This complements our Permian activities and demonstrates the scalability of our Clean Power product platform. Turning to Slide 10, permitting for this project remains on track, and we expect first power in 2028. The first phase centers on a module rated at 60 megawatts. It captures over 90% of carbon and is designed to reach availability of at least 95%. Our newest projections put the levelized cost of energy, or LCOE, at under $80 per megawatt hour. Because we've already locked in 300 megawatts of interconnect capacity, a route to upward of 750 megawatts of additional growth at this site is plainly visible. Progress continues on our MISO project, which aims to deliver first power in 2029. Its performance targets look much the same: 95% availability along with carbon capture exceeding 90%. The expected levelized cost of energy for this facility comes in at roughly $100 for each megawatt hour. In addition, there's 300 megawatts of interconnection capacity at this location, and it's capable of accommodating over 400 megawatts across later stages. Now looking at the right side of the slide, our approach will be to continue applying our team and expertise toward developing a strong pipeline of projects. What we're doing is sticking with the very blueprint that has guided us up to this point. In practice, that involves identifying the promising locations, locking in interconnection rights, obtaining the subsurface pore space needed for CO2 sequestration, hammering out long-term arrangements for both supply and offtake, and using our strategic owners' strengths to create clean, firm power hubs capable of expanding into sizable multi-gigawatt campuses during the early portion of this decade. Through these steps, we lay the groundwork for project execution that is both scalable and repeatable. At a high level, our plan is for these clean firm power hubs to start operating between 2028 and 2030, and they could grow into campuses of multiple gigawatts sometime from the early to the middle of the 2030s. This coming chapter of our story is something we're eager about, and we can't wait to update everyone on how things are going in the quarters ahead. With that said, I'll hand things back to the operator so the line can be opened for questions.

Morning. I appreciate you taking the time for my questions. Given the shift you've just announced, could you share how you see NET Power Inc. as uniquely suited to capitalize on this chance relative to other players, especially considering your earlier emphasis on the Oxy-combustion cycle?

Sure. Great to hear from you, Nate, and that's an excellent way to kick things off. When you truly break it down and examine the capabilities that NET Power Inc. possesses, it isn't solely about abilities—it's also about the resources and assets we hold right now. I believe it begins with a core grasp of power, essentially the surface-side component, plus a very strong grasp of what lies below the ground. When we pause and simply ask ourselves why gas paired with CCS hasn't truly gained traction previously, I think the reason is that all those prospective projects put forward on the CCS front for PCC have consistently followed a particular sequence. First comes figuring out the ideal spot for a power plant. Then comes the secondary question: can PCC be done at this location? If you aren't sufficiently near the sink, if you aren't sufficiently near a top-tier reservoir, the economics of PCC unravel quite fast. So everything hinges on location, location, location, and identifying the optimal spot where these sites can go. Then you combine that with, as I noted in the prepared remarks, the lengthy duration required to actually permit much of this. This isn't a situation where you can simply get up the next day and declare, let's begin PCC at this location. Permitting the wells takes years, and permitting the pipelines takes years. That will shift gradually as permit reforms begin to speed things up and cut down those timelines for constructing this infrastructure. But as of right now, I'd say the greatest distinguishing factor is who holds actionable projects in the correct regions to deploy. So one of the distinctive synergies I touched on before is that we occupy this uncommon spot where, across the past several years, we've begun to originate top-quality sites for placing these NET Power Inc. plants. These sites serve PCC just as effectively as they do NET Power Inc., since the inputs and outputs are identical—the same grade of natural gas enters, and the same quantity of top-quality, high-purity CO2 exits. Thus, when we consider the optimal locations for PCC, NET Power Inc. currently holds a handful of top-quality sites for these projects. So one clear piece of the synergy we identified with the folks at Entropy is that we've put together, you know, genuinely excellent sites where NET Power Inc. plants can go. Getting those NET Power Inc. plants built and commercialized is still many years off, so we'll have interconnection ready for 300 megawatts in West Texas and 300 megawatts ready in Northern MISO, and those could just sit there unused if our whole plan were to wait on NET Power Inc. deployment. What we see in front of us is a chance to bring a clean gas technology to these sites far faster than we would by simply waiting around for NET Power Inc. So you land in this spot where, you know, when Marc mentions reaching FID in '26 and COD at that first plant in 2028, that puts us in position to have the first clean, firm gas power plant running in the United States. Well ahead of whoever comes next. And that's only phase one, right? My sense is that across '28 through 2030, 2031, if we execute properly, we'll be able to scale up and develop multiple phases in both West Texas and Northern MISO. So I think by the time you reach 2031, 2032, when the next competitor's clean gas project starts up, we'll have three to four years of operational run time plus three to four years of multiple deployments behind us. But what makes all of this work is having the right location in the right areas, ones truly conducive to clean gas power, and NET Power Inc. just happens to hold those today.

Alright, that's clearly a very appealing prospect, and thanks for taking us through the details. Next, I'd like to ask about Entropy. Based on what I understand about their history and all they've been able to achieve, they seem like a fantastic collaborator. With our Glacier initiative and their Entropy 23 solvent, across many measures it looks much better than anything currently offered in the marketplace. So maybe you could explain further why you chose to partner with them in particular? And what you see in that technology that might allow post-combustion carbon capture to truly compete on cost?

Sure. Let me start us off, and Marc will be able to add anything I miss. First and foremost, in my view, this is just an outstanding team of individuals; one thing I've learned throughout my career is that being surrounded by talented people is the superior route. It makes everything much more pleasant; and ultimately, I believe that's what leads to the strongest financial outcome — when your partners are good people. And when it comes to that, the Entropy team sits at the absolute pinnacle. What really distinguishes the Entropy group, in my opinion, is the operational know-how they possess in connection with the solvent technology. Because the broader sector still hasn't truly taken off, what actually sets companies apart is having real, working projects already deployed right now, and the team at Entropy has pulled that off. And when you've got actual projects running, it becomes possible to refine the technology. You're able to tweak the assets, which gets you better performance. So with the facility having logged three years of operation, they've had the chance to improve and build up how well their technology does its job, covering the infrastructure side along with the solvent technology. That means they've managed to optimize what amounts to their capture cocktail. If you look at the bigger picture and consider what makes a particular solvent better than another, there are a few different metrics you can use. One is how much energy it takes to get the solvent separated from the CO2. Another is how efficiently it captures CO2. Then there's the degradation rate — how long it lasts before breaking down. And finally, there's how well the solvent, or the amines in it, resist turning into nitrosamines, which is something you don't want. When it comes to the Entropy solvent, the team has done an incredible job — basically creating a technology that leads its peers. That's the core of the synergy here: their product, which we'd describe as TRL nine, is ready to be deployed in power markets that require clean power most urgently — and that's the U.S. Meanwhile, we've got sites that are set up for clean power projects. By combining, they gain the ability to accelerate deployment of their technology throughout the largest market in the world, U.S. power. For us, it means we can pick up the pace on rolling out clean power projects while remaining true to our mission. And I'd say the real shared benefit is that both companies will hold equity in these project investments together, shoulder to shoulder. So what we're aiming for is this: stand up and develop, build, own, and run top-tier clean, firm power projects, drawing on Entropy's solvent and PCC know-how and pairing it with what we bring in power generation and site development, and the result is a win-win outcome for both companies.

Understood. I truly value how thorough that was, and I appreciate your taking the time for my questions.

Sure thing. Thank you, Nate.

Morning. What I want to know is if you could describe, in a general way, the financing structure for Phase one and then for the projects coming afterward; from what Marc said about Phase one, it seems you're in a position of strength, since you have an offtake arrangement and the CO2 is going to Oxy. Could you maybe lay out, broadly speaking, how you'd approach financing when it comes to putting debt on these projects? And one more thing — I saw on Entropy's website that Brookfield is listed as an investor in them. Does that play any role in this?

Yeah. No, Marty. Good to hear from you. Those questions are really great. Yeah. Let me begin with the way funding for these projects comes together. If you take a broader view of what we had in mind over at NET Power Inc., given that NET Power Inc.'s oxy-combustion technology was slated to be a first-of-a-kind facility — one thing we told the market was that, hey, we would likely have to cover that initial facility entirely through equity financing; the figure is $1.7 billion, and it would in all probability call for 100% equity finance, because there is no, you know, quote, unquote, bankable technology inside that plant; and that's okay. That's more or less what you'd expect with brand-new first-of-a-kind technologies. Consider that in relation to what Entropy is pursuing with the gas turbines and the PCC. As I mentioned before, roughly 50% of that plant is made up of technologies that are already proven and bankable — the gas turbine, steam turbine, the HRSG — and all of it can be financed because this equipment is established and retains genuine market value. When you purchase the equipment, its value is preserved should you wish to transfer or sell it. That makes it highly financeable from a project financing standpoint. So our view is essentially this: we know that at minimum, half of the CapEx is extremely bankable, using project financing alone. Equity funding won't be necessary for this. Basically, you can view the entire thing as being supported by cash flows locked in through long-term contracts. And we're talking about a span of ten to fifteen years here. With those contracted cash flows, you'd get to a point where a substantial portion of the project's overall CapEx could likely be covered through project finance. The reason for that really comes down to what we're aiming for regarding how competitive this is when you look at it through an LCOE lens. In my view, LCOE doesn't represent the ultimate measure of what makes a project's economics work. But suppose you're, for instance, positioned at the very bottom of that LCOE range and you're still receiving a premium price for the power — that implicitly signals something: these projects ought to come in somewhere between mid-single-digit and mid-double-digit IRR, which means 10% to 15% on a levered after-tax basis, and that's sufficient capacity to carry project financing for the whole thing. So turning to how it gets financed, it won't be the situation that NET Power Inc. is required to write a check covering $300 million or $400 million of equity dollars on the first project. The portion will be much less than that. On top of that, there's one arrangement we have with Entropy regarding their ability to participate with us in these projects. For the people backing Entropy — Brookfield, CGF, and Advantage — this structure winds up being quite attractive. There's additionally a possibility that additional Entropy investors might come into these projects via Entropy, partnering with us. Consequently, the equity capital sum we'd be contemplating for West Texas phase one — and for the subsequent phases as we grow this — would be considerably reduced on a per-megawatt basis and per dollar of CapEx basis. That represents a major shift versus what would have applied had these been NET Power Inc. projects rather than the current arrangement. So in a sense, it's an ideal structure, because it enables us to bring clean firm power online more quickly. It's more accretive to the equity dollars we're contributing; on a tighter timeline regarding how fast we bring new power generation to market.

Great. That was quite useful. Then, as a second question, I was hoping you might be able to give us some examples of talks you've had with possible offtakers in the data center space who want this kind of answer for their electricity requirements and could be open to signing a longer-term offtake deal. What's their perspective? And I'm aware you brought up the Google announcement not long ago.

Yeah. It's pretty fascinating. Today is essentially our debut, in a sense, when we begin to lay out: here are the projects; here are the schedules for them; here's the carbon intensity curve; here's the reliability curve. We're pursuing this across West Texas and Northern MISO at sites we hold. I believe historically those discussions centered on the NET Power Inc. technology. That's an excellent technology, yet the single issue with the NET Power Inc. element, I'd say, is that you're discussing projects that wouldn't begin until 2030 or 2031. Then the second facility arrives in 2033 or 2034. When you consider how urgently hyperscalers, these data centers, and AI need power, 2030 and 2031 are ages away — in dog years, cat years, or any creature with a very brief lifespan. Their sense of time value differs completely from ours under a conventional financial perspective, where we treat time value as something like a 10% or 12% cost of capital annually. I think they consider things in terms of multiples, multiples, multiples beyond that. A project launching in 2031 holds 100 times less value than that same project if it could launch in 2027 or 2028. So the talks we can now begin having with strategic offtakers turn into something far more genuine and far more compelling, since we're discussing projects on a greatly sped-up schedule compared with the talks we've previously had with them regarding projects beginning in 2031 or 2032. All of that feeds into why this sort of partnership ultimately makes enormous sense — it speeds up not only the rollout of these projects, but genuinely begins pulling forward many of those strategic discussions about strategic offtake with people who desperately need as much clean, dependable power added to these grids or behind the meters as quickly as practically achievable. So I think this truly positions us to hold far more productive, far more concrete and genuine discussions. Yet ultimately, everything hinges on our capacity to keep advancing these projects and provide the proper solutions on the proper schedule. So my view is that teaming up with Entropy gives us the ability to make that happen.

Excellent, thanks. That answered a lot of my questions.

Sure thing, Marty.

Betty, good morning. Thanks for the question — it's about slide 10. You're also asking us to walk through the project economics, specifically what allows an LCOE under $80 in the Permian when MISO comes in around 100. On top of that, you want our view on CapEx and the other credit stacking elements connected to the Permian project.