Greetings, and welcome to the Net Power Inc. Fourth Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Bryce Mendes, Director of Investor Relations. Bryce, please go ahead.

Good morning, and welcome to Net Power's fourth quarter 2024 earnings conference call. With me on the call today, we have our Chief Executive Officer, Danny Rice; our President and Chief Operating Officer, Brian Allen; and our Chief Financial Officer, Akash Patel. Today, we issued our earnings release for the fourth quarter of 2024, which can be found on our Investor Relations website along with this presentation at ir.netpower.com. During this call, our remarks and responses to questions may include forward-looking statements. Actual results may differ materially from those stated or implied by forward-looking statements due to risks and uncertainties associated with our business. These risks and uncertainties are discussed in our SEC filings. Please note that we assume no obligation to update any forward-looking statements. With that, I'll now pass it over to Danny Rice, Net Power's Chief Executive Officer.

Thank you, Bryce, and good morning, everyone. I'd like to start by saying 2024 was a year of significant progress for Net Power even amidst the challenging market conditions we faced while commercializing our technology. We completed the front-end engineering and design, or FEED, for Project Permian, which we refer to as SN1, marking a major milestone for the world's first utility-scale fully integrated clean gas power plant of its kind. We also kicked-off the first phase of our equipment validation program with Baker Hughes at our La Porte demonstration facility, achieving successful ignition on demand and accumulating over 140 fired hours to date. As many of you know, the energy sector has been grappling with unprecedented demand for reliable generation capacity, driven by more than a decade of underinvestment in power infrastructure and baseload generation, which is now compounded by rapid load growth, especially from AI and data centers. This unprecedented demand response for new baseload generation, which Net Power is developing, has led to significant inflationary pressures across the sector. Completing the FEED gave us a detailed indicative estimate, including a buildup of material quantities and labor costs, but it also revealed areas where we can meaningfully reduce costs at our first deployment. I'd characterize this as fairly standard in bringing a new technology to market. As a result, we've shifted our focus to a post-FEED optimization and value engineering exercise to strip costs from SN1 and our standard plant design with minimal impact to performance, bringing us closer to delivering the lowest cost form of clean, firm power that's scalable. Before I dive deeper into our strategic pivot and outlook, I'd like to frame the broader macro context we're operating in. The surge in load growth, particularly from AI, just further underscores the value of reliable energy. We believe Net Power can be the most logical solution to deliver clean, reliable, and affordable energy. Over the last four to eight years, the macro pendulum was swinging far in the direction of prioritizing and incentivizing clean generation capacity with little consideration towards overall power prices or grid reliability. But now the incoming load growth has quickly swung that pendulum in the opposite direction, driving a singular focus on adding reliable, affordable power as quickly as possible. We're caught in the middle of this frenzy. Our plant's expected costs are impacted by the same tightness everyone in the power sector is seeing, especially those developing new baseload thermal generation solutions, which makes it a little bit tougher for us to negotiate when we're competing with companies ordering much more than we are. But we remain focused on improving our technology and positioning to be the lowest cost source of clean, firm power in the coming decade. With over $530 million in liquidity at year-end, we're in a strong position to advance our technology, optimize our plant designs, and attract the right strategic partners to unlock this technology's potential. I'll now walk through our key milestones from 2024 and our priorities for 2025 before handing it over to Brian for operational updates and Akash for the financials. Starting with Project Permian. Completing the FEED was a major undertaking between us and our FEED partner, the Zachry Group. As far as we know, this was the largest-ever FEED completed in the last few years for a clean gas power plant. In some ways, the FEED was a significant de-risking event for the company as it identified no fatal flaws in the technology or plant design, and it is the plant we can go build today, absent the cost, economic, and fundraising constraints I'll now touch on. On the cost side, the indicative estimate highlighted the market challenges we face as our technology isn't immune to the inflationary pressures impacting the entire sector as I just mentioned. For reference, when we went public in 2023, our preliminary CapEx estimate for SN1 was $950 million. In the years that followed, we've revised that forecast upwards to $1.1 billion and then higher to better reflect the rising costs around us. And now, based on the completed FEED and where we think we'll land with the value engineering work we started this quarter, we're estimating total installed cost will be $1.7 billion to $2 billion. This represents an approximately 100% increase in our total installed cost estimate, with the inflationary pressure being a large factor along with the site and project-specific items I'll touch on later. This increase is in line with the cost increases being seen by unabated gas projects. For reference, combined cycle gas turbines, or CCGTs, had estimated costs of around $1,100 per kilowatt just a few years ago. That figure rose to $1,500 per kilowatt last year and now we're seeing new combined cycle projects price north of $2,200 per kilowatt. If and when the global supply chain catches up to this demand, we'd expect to see meaningful cost deflation above and beyond the cost savings we hope to achieve through value engineering and our multi-plant initiatives. Part and parcel with the cost inflation is just the tightness in the global energy supply chain. Anyone looking to order a CCGT is likely looking at 2030 for base case deliveries. And I think we've done a commendable job lining up the supply chain to deliver our plants on a timeline that's competitive with other gas solutions. With Project Permian FEED, we also learned that a significant amount of costs are unique to West Texas in the first-of-a-kind nature of SN1. Brian will go into more detail on our value engineering, but I'll just add that the Permian has great features that make it an ideal place to put a first-of-a-kind facility, including access to low-cost natural gas and well-established CO2 sinks. But unfortunately, the inherent higher cost to build in West Texas challenges the plant's economics and ultimately hinders our ability to get the project financed today. With this backdrop, our focus is now on plant cost reductions. For 2025, we're focused on three things. First, we'll continue the value engineering exercise to further reduce costs for Project Permian. Second, we'll complete the feasibility studies we kicked-off earlier this year for multi-unit projects along the Gulf Coast, which we believe will demonstrate further cost reductions. And third, with a lower-cost Project Permian and a line of sight to material cost reductions from Gulf Coast megaprojects, we'll seek to raise capital and form projects to commercialize the technology. Now, the ultimate goal here is to be the lowest cost form of clean, firm power at a reasonable premium to carbon-emitting alternatives. So quickly touching on our competitive positioning versus the alternative forms of clean firm power that can be deployed, first there's post-combustion carbon capture, or PCC. PCC increases the development and operational complexity of a combined cycle, and the costs are not well established because it hasn't yet been successfully deployed at scale, particularly for CCGTs where there is a low concentration of CO2 in the flue gas stream. And with commercial demand here today to build new unabated combined cycles, developers aren't required to install PCC in order to secure long-term PPAs to help underwrite project funding. Interestingly, PCC reduces the amount of net electric output from combined cycles. So, in a load growth scenario like we're in now, installing PCC is counterproductive to the grid's primary needs. Nuclear is the other scalable clean, firm power generation option. And while it looks promising on paper, we don't believe it's a credible deployment option for the next ten years. Bottom-up estimates suggest new nuclear projects carrying LCOE of over $200 per megawatt hour today, and first deployments are ten years away. We consider ourselves energy altruists, and we want to see all forms of clean, reliable, affordable power succeed, but we're also energy realists too, and it's hard to see nuclear as a viable option for at least the next decade. Now that doesn't mean the US and others shouldn't invest in advancing nuclear technology, but we think there's a big difference between deploying now, which is impossible, and advancing the technology through 2035 and deploying a decade from then. Nuclear has time to mature, thankfully due to the availability today of firm technologies like combined cycles and clean firm solutions available much sooner like ours. So, as we think about our timing, operationally we'll be ready to go this decade if we can get costs down and create a viable pathway to economic commercialization. This cause is frustrating but necessary, and yet we think we're still years ahead of competing technologies. So, in a way, we have the benefit of time to ensure we get it right before embarking on a pathway that will require billions of dollars from strategic commercial partners for project-level funding to reach our desired end state as the lowest-cost form of clean firm power. In addition to the value engineering and multi-unit pre-FEED exercise, our related area of focus this year is securing sites along the Gulf Coast for modular multi-unit deployments of up to 1 gigawatt each. These sites can also co-locate with large load data centers or industrial users. However, which of these projects should become slotted for SN2 or 3 will ultimately depend on securing strategic capital partners. Beyond SN1, we've begun evaluating other creative ways to commercialize this technology and unlock its embedded value. For example, Baker Hughes and Woodside have kicked off the industrial-scale program to target industrial applications looking for clean reliable power. This smaller-scale power plant would be a true licensing opportunity for Net Power with limited capital required from us. So, with that, I'll hand it over to Brian for operational updates.

Thanks, Danny. On Project Permian, as Danny mentioned, we completed the FEED in the fourth quarter, a major milestone for our team. The resulting project total installed cost estimate was higher than expected. I will provide a little more detail on what we have learned and what we will do next. The FEED provided us crucial design information and an indicative cost estimate and schedule that reflect today's market realities. The engineering work that has been completed has identified and solved many of the technical issues that emerge as you apply a technology like ours for a first time to a project-specific site application. This is a notable de-risking event for us, and as we have worked through and identified no fatal technical flaws to date in the balance of plant when deploying our technology at full scale to a site like Project Permian. The engineering deliverables also form a really solid basis for us to develop our standard plant design, which I will speak about later. Regarding techno economics, our engineering team has been optimizing our process design and making trade-off decisions based on our most recent pre-FEED using our best judgment on how to account for cost escalation. By working through this FEED process, we now have up-to-date indicative costs, including equipment pricing, bulk material costs, craft labor installation rates, and transportation costs. This is a large industrial project, and we have now matured the design to be able to directly quantify the site-specific costs for Permian. There are many great attributes to Project Permian, including the de-risking afforded by utilizing Oxy's existing CO2 infrastructure, the access to skilled craft labor, the regional need for clean baseload power, and a supportive local community. Like any site, though, there are also areas that can drive cost challenges. The natural gas in this part of the country has four to five times the nitrogen content of other basins in North America, which requires purification equipment, which adds CapEx and adds to the parasitic load of the plant, reducing efficiency. Another challenge is the inland site location. Large equipment shipments into the major ports in Texas will encounter several hundred bridges and a couple of hundred transmission lines along the route to get to this site. This can be dealt with, but it does lead to overall weight and size restrictions we need to meet. Therefore, we have to break up our equipment, skids, and modules into smaller transportation loads by rail or truck. When coupling that reality with our desire for the fastest feasible project schedule, it really forced the design into what the EPC industry would call a stick-built design, which limits the ability to modularize and drives up the craft labor hours at the job site. Other challenges to the site include the cooling water availability and water quality, driving a very expensive water treatment plant design that has had an impact on our cooling system material selection and cost. We now have this design and cost information, and it informs us on what to do next. We have started a two-pronged approach; one is related to next steps on Project Permian, and the other is related to our standard product for deployment on future projects. For Project Permian, we have now shifted into a post-FEED optimization and value engineering process with Zachry, expected to finalize and result in a firm price this year. In the past two months, we and Zachry have identified hundreds of opportunities to value-engineer the design, and to date, have already reduced the site footprint by approximately 25%. Our goal remains to get total installed cost as close to $1.7 billion as possible or below without compromising performance or validation of the technology. We will focus on areas like techno-economic trade-offs, truckable module designs for the pipe racks, reducing design allowances and contingencies, and making site-specific scope adjustments. We are also beginning to get a better view on the site-specific performance impacts and now have better information to optimize cost and performance, similar to the approach taken with other power plants. Given this ongoing value engineering, we felt it was prudent to stop any further long-lead equipment releases and ensure that we have maximum flexibility to reduce costs and not block ourselves from making changes to equipment specs. The schedule, therefore, needs to adjust. Assuming we secure the necessary capital for Project Permian after finalizing the firm project cost, the project timeline likely pushes to a best case of groundbreaking in 2027 with an in-service date in 2029. On the next slide, I would like to shift gears to our standard product approach. We have always viewed that the best way for us to achieve our cost targets and ability to scale was to take a product-driven approach encompassing a set of standard plant designs with pre-engineered standard options. This is similar to the approach taken by power generation turbine OEMs. Permian has helped inform what our single unit inland standard design should look like once we pare back some of its site-specific features and adjust the design for truckable modules. Targeting the most competitive product we can develop, we have launched a large modular multi-unit feasibility study to develop a standardized design targeting coastal locations that enhances scalability and reduces cost. This complements our broader cost-down exercise for both SN1 and future deployments with the goal of our generation one achieving the most competitive clean baseload power cost in the market. As part of this design effort, we're also evaluating coastal site locations for projects in the 2030 to 2033 timeframe, which could benefit from modularization and eliminate costly inland transportation challenges and the large construction labor man hours for stick-built sites. We are also looking to drive up the size of our standard product, no different than the economies of scale achieved today by CCGTs that have scaled up to 600 megawatts and up. On the next slide, I will address our La Porte demonstration facility, where we commenced the first phase of our equipment validation program with Baker Hughes in the fourth quarter. In order to begin the burner testing, we first had to upgrade and recommission the plant after having been idled since the 2021 testing campaign. Our team along with Constellation and a dedicated group of skilled contractors performed over 150,000 hours of construction work to upgrade and improve the plant to meet the test requirements. I'm really proud of the team and our contractors for safely performing this construction work with no recordable injuries. As we commissioned the plant, we worked through typical shakeout issues as we operated a facility that has been idle for a few years. After working through those teething pains, we brought the facility up in pressure and temperature. I'm proud to say the facility has now achieved an operating window of higher pressure and temperature combinations than those achieved in the 2021 test campaign. Regarding the burner testing, Baker Hughes has achieved burner ignition such that the facility is often operated in what we would call fired operation, where heat is being put into the CO2 working fluid by the burner and recirculated throughout the entire plant. To date, the facility has accumulated over 140 fired hours of operation during Phase 1 and had a continuous run of over 24 hours. Turning to the next slide, we will continue to work with Baker as they test multiple burner configurations and collect the data they require to move to Phase 2 later this year. In Phase 2, they will begin testing selected combustor cans for final down-selection, after which they will manufacture multiple combustor cans to support the Phase 4 demonstrator turboexpander testing. This four-phase testing program is scheduled to be completed in 2027. Each phase builds on the last, giving us critical data to refine our utility-scale designs and ensure reliability as we scale. Finally, I'm excited about the collaboration framework announced by Baker Hughes and Woodside Energy to develop an industrial-scale Net Power solution for smaller applications like oil and gas, LNG, heavy industries, and small-scale data centers. This program will benefit from our ongoing validation efforts at La Porte and the development of SN1 and our standard products, while opening up new licensing opportunities with minimal capital outlay from Net Power. We stand ready to support Baker, Woodside, and other future program participants with the Net Power process IP we have developed in order to ensure a competitive and successful program. This program is a great complement to our utility-scale efforts and broadens the potential applications of our technology. With that, I'll turn it over to Akash for the financial update.

Thank you, Brian, and good morning to everyone. Let's start with our liquidity position, which remains a key strength for Net Power. We closed 2024 with $533 million in cash, cash equivalents, and investments, down from approximately $580 million at the end of Q3. This decrease reflects approximately $13 million in operating cash outflows and approximately $29 million in capital expenditures, primarily tied to La Porte upgrades and SN1 development. For the full year, our operating cash outflows were approximately $32 million, with total capital expenditures of roughly $70 million. The operating cash outflow included approximately $18 million in cash payments to Baker Hughes under the JDA in 2024. Thus, the operating cash outflow in 2024, excluding the Baker Hughes JDA cash payments, was approximately $14 million. Looking ahead to 2025, we'll continue to deploy capital prudently, focusing on advancing our validation program at La Porte through Phases 1 and 2, as well as preparing for Phases 3 and 4. On the funding side for SN1, if we had $1.7 billion to $2 billion today, we'd wrap up the value optimization exercise this year, declare FID at year-end, and break ground in the middle of 2026 to target having the plant online in 2028. We're keeping things moving on many project fronts to preserve the ability to deploy Project Permian as quickly as possible, but there will be a day-for-day slippage in first fire until we reach FID. So, if FID occurs by the middle of next year, we'd expect to have the plant online in 2029. But given the uncertainty in raising the capital, it's nearly impossible to attempt to put a date on when we could reach FID. As Danny mentioned, we've earmarked $200 million in our liquidity for SN1. We spent about $50 million to date on engineering and long-lead items. We believe current SN1 economics can support up to approximately $600 million in project-level financing, which combined with our $200 million and initial indications from our strategic owners, leaves roughly $600 million to $900 million in new capital needed to fully fund the project. We're actively exploring strategic partnerships and capital solutions at both the project and Net Power levels to fill this gap. Now, like many of you know, the investment proposition for Net Power is to develop and license these plants, not to be the constructor and owner of them. We're well-capitalized to develop our technology and get it commercial-ready, but we're not properly capitalized to fund and FID the projects themselves. They're just too big for a company of our size. But they are certainly the right size for the broad array of customers looking to install hundreds of gigawatts of clean, reliable power generation over the coming decade. Our balance sheet gives us significant runway to execute our 2025 priorities while navigating the challenging market environment. We remain focused on maximizing the value of our proprietary Net Power Cycle and positioning the company for long-term success. With that, I'll pass it back to Danny for closing remarks before we open it up for Q&A.

Thanks, Akash. To wrap up, our mission remains clear: to deliver clean, reliable, and affordable power at scale. While the macro environment presents challenges, particularly around costs and capital access, it also underscores the immense opportunity for Net Power. The world needs solutions that balance load growth with decarbonization, and we believe our technology is uniquely positioned to meet that. With our focus on cost optimization, modular design, and strategic partnerships, we're committed to getting SN1 across the finish line and paving the way for future multi-unit deployments. We'll continue to advance our utility-scale validation testing with Baker Hughes at La Porte, complete our value engineering for SN1, and line up the capital to break ground. At the same time, we'll keep exploring opportunities to unlock the embedded value of this technology, whether through licensing, industrial-scale applications, or new deployments. We've got a lot of work ahead, but I'm confident in our team's ability to execute and deliver value to our shareholders. So with that, operator, let's open it up for questions.

Certainly. We'll now be conducting a question-and-answer session. Our first question is coming from Thomas Meric from Janney Montgomery Scott. Your line is now live.

Good morning, Danny, Brian, Akash. Thanks for all the details on the call, especially with regards to CapEx and what you're working on. And I have a couple of questions on CapEx, not surprisingly, but congratulations on getting the FEED done and no technical fatal flaws there. So, congrats. On CapEx, I'm wondering if you could break out labor costs, maybe labor productivity assumptions within the FEED at this point, and you just had to think about some of those changes versus prior expectations and maybe raw materials in there as well.

Hey, Thomas, this is Brian. Thanks for the question. Yeah, we're not going to be able to provide a breakdown at this point, but I will provide a summary of some of the drivers here. First of all, there is, I'd say, a market supply-demand imbalance that we've been seeing in the energy industry and whole electrical gear, for instance. So, some of the things that we've been releasing long-leads, I'd say, and others are supply-demand challenges. Others are just the escalation that we've seen in the industry across the board. I will note that on Permian, as you work through the FEED, all the site-specific issues start to emerge in a real project versus, let's say, standard-type dollar per kW or early indicative numbers we've put out in the past. And then, we talked about those in our prepared remarks. So, it's really a combination of all of those things of, let's say, supply-demand, pure escalation on some of the material and labor, and then, first-of-a-kind issues with our first project that we have to add extra scope and certain things to make sure the plant operates reliably and we compare some of those back once SN1 operates for future plants. And then, you have the Permian-specific items. So, they're somewhat all intermingled. It's kind of hard to break it up into percentages, but in totality, that's what drove the increase.

Thank you for that insight. I have a follow-up question regarding the overall capital expenditure for thermal technologies. Many are familiar with the figures you've mentioned and the chart you provided, which is appreciated. I'm asking from the perspective of your owners group and partners. How do you anticipate thermal capital expenditures will decrease in the coming years as projects are launched? Moving from $2,200 to $1,000 for an unabated combined-cycle gas turbine seems quite ambitious. Based on your discussions, how do you envision this unfolding? Additionally, in your talks with potential data center operators, how are they viewing these rising costs as a chance to address any funding gaps? I'm particularly thinking about the $600 million and $900 million gaps you noted. Any insights would be appreciated. Thank you.

Hey, Thomas, this is Danny. I think, when we look at the cost of really what's the marginal cost of new supply, which is the combined cycles at $2,200 a kW, that kind of back-of-the-envelope gets to like $65, $70 per megawatt hour for their LCOE. From our vantage point, we don't think we're going to see CapEx deflation anytime soon, while people continue to have pretty tight supply chains going up to the beginning of next decade. So, we're not contemplating we're going to see this deflation as another way for us to see CapEx reductions. And I think that's one of the big reasons behind this initiative on, all right, let's start to get ahead of really being able to scope out cost savings of this multi-pack deployment, because I think, as Brian kind of talked about earlier, one of the bigger drivers of just the Project Permian or really the first project being the most expensive one is because it's going to be a single-unit pack, whereas we can say or confidently say, today, if we can deploy this in two to four pack installments, you're going to see meaningful CapEx reductions on a per unit facility. So, that plus the prefabrication, the modularization, and sort of that coastal application is going to be a huge driver of cost reduction for us, absent deflation in the power sector. We just don't see it coming. And so, I think as we look at where do we think we need to get to with CCGTs at $65, $70, maybe that goes to $75, those things being contracted at $90, $95 per megawatt hour. We're going to be sending a bogey that's not going to be terribly higher than that, but for us to be able to get to that sort of number, it's going to require us getting into that multi-plant sort of configuration in an area that's not quite challenging for construction, which means trying to get to places where we don't necessarily have to stick-build everything the way we're going to have to for the first plant. But kind of like we've said all along, the first plan is really to prove the technology. It's not going to be the plan that demonstrates the economics. It's to prove the safe reliable operations. And so, the bigger initiative for the first one isn't so much on demonstrating the economics, it's getting the project funded. And so, with this CapEx increase that we're seeing right now, it's really just a function of can we get the CapEx down to a place that we can get it funded. And I think part and parcel with being able to get it funded is being able to demonstrate a pathway to a really, really competitive LCOE relative to the next best alternative, which is an unabated CCGT.

Thomas, I'll address your second question regarding the funding gap and the potential avenues to address it. Broadly, we see four approaches to funding. First, there's project-level capital. Second, we have Net Power Topco-level capital. Third, government support is an option, including assistance from the DOE at the federal level and the Texas Energy Fund at the state level. Finally, the fourth approach can apply to both Topco and project levels, which involves commercial partnerships. This could mean collaborating with your off-taker or teaming up with another strategic partner to gain favorable terms for project deployment. We are actively exploring all these areas, especially the commercial partnerships.

Thank you. Next question is coming from Martin Malloy from Johnson Rice. Your line is now live.

Good morning. I wanted to ask about the modularization in that area and if you could discuss some of the milestones we should expect along the timeline. Modularization has shown to be effective in reducing costs and shortening construction timelines on larger projects. Baker Hughes and several LNG projects have demonstrated that they can help cut costs through modularization. Could you share the milestones or timelines we should anticipate in relation to that?

Yeah, Marty, this is Brian. Yeah, you're right; it's a known lever that's really powerful, right, which is why we're pursuing it. I would say just stepping back to Permian, I mean, we've known and have been pushing for as much modularization as an inland site would allow, but as I have said in my remarks, any inland site typically has hundreds of bridges and so forth that you have to traverse. So, it just sets a maximum logistical constraint. I would say, with the speed we've been driving on this project, there's still more to squeeze there in terms of more modularization at that project site. So, that's something we're working with Zachry on the value engineering as we speak is just max out the size of the loads, the pre-assembly, pre-fabrication, and smaller modules that we send to inland sites. Now, back to coastal, mega module was always in our plans, but as Danny said, as you look forward to the future deployment of our technology, likely would be the most cost-effective way to scale up to multi-unit configuration and heavy modularization or mega module potentially with almost no inland transport. So, we've already kicked-off work with an engineering firm on that. And this year, we'll look for feasibility and/or potentially pre-FEED to start getting a design together and indicative costs. I think in future quarters, we'll lay out milestones that you should expect, but right now, that's the work we're going to do this year to quantify that and quantify, as Danny was saying, future target LCOE that we could hit with that configuration.

Great. And for my follow-up question, just wanted to ask about with the new administration, any change in terms of discussions with the DOE or anything else you might be able to add to how much support there is for this type of project?

That's an excellent question, Marty. While I can't discuss specific combinations, I can say that at a high level, Net Power's strengths in utilizing domestic natural gas and using CO2 to enhance domestic oil production align closely with the administration's goals for energy security over the next four years. Net Power addresses both of these needs and contributes to reliable energy, which is increasingly important given the current load growth, the rise of AI, and geopolitical security. Overall, Net Power's mission resonates with the administration, and we will see how things develop. Another important aspect still up in the air is the future of the 45Q tax credit. There are mixed opinions about whether it will be reduced or potentially increased, with discussions around adjusting effective dates for inflation, which could raise credits significantly. Some projections suggest that the utilization credits could increase from $65 to as much as $105. Such changes would be advantageous for us. Given the current inflation, there's a strong argument for increasing these credits, as the inflation we are experiencing stems from broader market dynamics affecting power generation, not just our technology. Therefore, support from initiatives like 45Q is crucial for the success of emerging technologies like ours.

Great. Thank you. I'll turn it back.

Thank you. Our next question is coming from Noel Parks from Tuohy Brothers. Your line is now live.

Hi, good morning. Just a couple of things. It does seem that we're sort of in a situation with the AI-driven power demand that's on the horizon with the industry, the power players all needing to crowd through the same door essentially to deliver the capacity that's needed, whether traditional gas turbines or microgrid solutions, gas-based and otherwise. So, if there are similar cost increases on the way for other generation projects based on the factors that are affecting you, do you think that the power end users and prospective end users are realistic at this point about how tight the crunch is going to be?

Yeah, it's a good question, Noel. I think, yeah, we talk about that one a bunch internally a lot. Does the market have a really good handle on where power prices are going, and probably more so than just power prices, but just availability of power? I mean, my opinion is no. I think the market is still extremely tight through the end of the decade. We've started to exhaust some of just the production capacity of CCGTs. And I think that's probably one of the reasons why we've said, hey, we've been pushing it really, really hard to try to get this first project done as soon as we possibly could. I think the typical order of operations that any large project developer of some of our magnitude would go through is, let's do the FEED, let's then get to FID, and then we'll start releasing long-lead items. But I think the way we went about it was, we need to get this first plant on as soon as possible, and we're not going to go in the traditional order of operations. We started releasing long-lead equipment while we were conducting the FEED. And I think as we got to the end of the FEED, we said, hold on, this market and the demand that we're seeing today, it's going to be there for the next 10 to 15 years. And so, is it really worth to us really compromising the health of our balance sheet and the credibility of the company to try to move it at a breakneck pace that doesn't get us to the market any sooner? It probably just makes it a little bit harder for us as we continue to have just potential road bumps along the way. So, what we're really doing now is having this healthy pause to recalibrate, really understand what the market potential is, really understand what our plant competitive economics look like. I think we're still in a position where we have pretty good line of sight of being the lowest cost form of clean firm power, and not just on an absolute basis or relative basis, but on a timescale basis. And I think that's really the most important part is this is a world that needs as much reliable generation as it possibly can get. And I think what we're seeing in the market today is the market doesn't really care if it's clean or not; they just care if it's scalable, it's reliable, and it's available today. And it will build as much of it as it can. And if it happens to be affordable, that's great. And so, we kind of see this market continuing to grow. And people have quickly moved from trying to find solutions for '26 and '27. They're now looking at '28 and '29. As you can see with the CCGT supply chain, folks are looking at 2030 and 2031. We're hearing people starting to FID projects in 2032. And so, I don't know, I think we're in a pretty unique place where we're talking about being able to bring a first of a kind, pretty transformative clean gas technology to the world this decade. I think it's pretty incredible for us to be in. And so, I think what we can really do is just ensure we take our time to get it right because the world needs solutions like this just as much as it does anything else.

Sure. Are there any common issues that financial partners you've spoken with are raising? I'm curious if they're focused on shorter-term financial commitments compared to longer-term engagements, like those seen in PPA-type activities. What are the financial players considering at this moment, especially in light of our discussions about AI and power demand?

Yeah, Noel, I'll take that one. This is Akash. I'd say the vast majority of the, I'll say, strategics that we're speaking to, whether that's folks that want to do off-take or folks that want to provide infrastructure capital or folks that want to participate to decarbonize their own operations, i.e., utilities or oil and gas, they're all focused on not just the first unit; it's what is the pathway for us to deploy these Net Power units at scale. And so, it's really a focus on the 2030 to 2035 timeframe and how does our ramp up, and their ability to really deploy and use the learnings from the first one in gaining comfort on construction, operation, commissioning, etc., allow them to really hit the ground running in the 2030 timeframe. And I think that timing aligns up pretty well given at this point, if you're talking about a new unplanned CCGT, you're in the 2030s. And so, our timing of when we really plan to ramp is really aligned with the work they're doing right now for any type of new large scale power generation.

Thank you. Next question is coming from Nate Pendleton from Texas Capital. Your line is now live.

Good morning. Thanks for taking my questions. Can you provide additional details on the industrial-scale Net Power platform? Specifically, how should we think about the total addressable market there? And can you provide any high-level differences in how the royalties may be structured between utility-scale and industrial-scale plants?

Yeah, this is Brian. Yeah, we're really excited about that platform. This is similar to other technologies. You need different sizes and shapes for the different market needs, right? It does open up really a whole new market compared to the utility. We just talked prior about scaling these plants up to 600 megawatts to 1 gigawatt, but there are many industrial applications that need 24/7 clean power at just a smaller scale behind-the-meter LNG, and other applications we spoke about. So, it does open a new TAM, which I'd say we're not ready to lay out values on that just yet, but we will in the future. As far as the size of this, I would say, again, the work that Baker is going to do with Woodside and others and us is really nail down what is that target best fit across multiple different sectors. But you should be thinking it's less than half of, let's say, the utility-scale size, but still to be nailed down as they develop that program, what's the optimal fit?

And then, I guess I can chime in on just how to think about the licensing aspect of it. This program is really driven by Baker and now Woodside, as their first partner in this. We are a pure licensor in the industrial-scale platform. And so, when you think about what is Net Power's role here, yes, we will provide technology support, but we are effectively going straight to the end state that we would go to at the utility-scale, right, which is we will sell a license, we will earn revenue on that license, but we are not really subject to material capital outflow to get that program or to get a facility built.

Got it. I really appreciate the detail there. And then, shifting gears a bit to your MOU with Carbon TerraVault. Can you speak to the opportunity you see in California for Net Power plants? And at a higher level, how do you expect to use partnerships like this and other agreements ahead of the Project Permian start-up?

Yeah, so the Carbon Terra one, I mean, it's a really, really exciting one. So, the CRC folks control a lot of just depleted oil and gas fields in California that have been produced over the last 100 years. And now, the CRC folks are in possession of close to 1 billion tons of CO2 storage capacity across their entire acreage position. And so, we just collectively came together and said, hey, you guys have all the storage capacity; you want to fill it up, and we have these clean gas power plants that are just carbon capture factories. And so, if there's a way that we can co-locate our power plants above your CO2 storage vaults, that's quite synergistic to both of our firms as well as to just the state of California because you're able to provide new baseload power generation in a state that hasn't had a baseload power generation facility built in the last decade. So, there's a lot of really just nice attributes about this that make sense all around. And so, just part of the scope of what we're doing with the CRC folks right now is really scoping out that first gigawatt of plants that we want to put in California, where do we want it to go. And I think a lot of that's really going to be instructive coming out of this modular multi-plant pre-FEED program that Brian and the team are going to be running this year. A lot of stuff coming out of that, a lot of the information coming out of Project Permian with its stick-built application is going to be pretty helpful in really helping us understand optimal locations, optimal scope for successful projects in other states. But right now, like, the big focus for this year is wrapping up the Permian work on the value engineering and then really getting to work on this multi-pack configuration pre-FEED that the team is going to be doing. And those two pieces of information coming out of those are going to be really helpful with figuring out how do we prioritize some of these other areas for the early 2030s.

Understood. Thanks for your time.

Thank you. Next question is coming from Ryan Levine from Citi. Your line is now live.

Thanks for taking my questions. In terms of the number of resources or particularly human resources pursuing this opportunity, has that scaled up or down in recent months both through Net Power and your strategic partners around developing the technology?

Yeah, I think the general answer is we continue to build out the team. I mean, if you look at Net Power as an organization, we added a bunch of folks in 2024, a lot of key technical roles which Brian can get into. And then, if you just look at across the technology development between us, Baker, all of our SMEs, Oxy, Constellation, there's hundreds of people working on this thing on any given day. But I'll let Brian chime in further.

Yeah. No, that's right. I mean, Zachry has a large team that's only grown, same with Air Liquide on the FEED work, same with Lummus and their multiple sub-supply chain that they're bringing in. As Akash said, I mean, we've identified where the technology needs are in gaps and built out an incredible team at our company that have expertise themselves in air separation plants, heat exchangers, turbomachinery, etc. So, we've only grown. Our key partners have only grown. And then, this also takes, let's say, dedicated specialty contractors, which over time we've identified who are best-in-class and can fill in any technology or commercial gaps. So, yeah, only been increasing to this point.

Great. Thanks. And then, on Slide 8, you referenced that you're focusing more on US Gulf Coast opportunities. Previously, you had highlighted some North MISO opportunities. Are those no longer being pursued, or are those delayed from commercial development opportunities?

Can't comment on that specific one exactly. But, yeah, I mean, the whole part of MISO is pretty interesting geologically. So, hopefully, whether it's us or other folks, it hopefully gets exploited because the rock there is pretty good. And again, it's an area that needs as much firm generation as it can get.

Great. Thanks for taking my questions.

Thank you. Next question is coming from Wade Suki from Capital One. Your line is now live.

Good morning, everyone. Thank you for taking my question. Just wondering if you could expand a little bit on some of the, let's call it, commercial activities, dialogue with customers. And if you wouldn't mind maybe touching on the opportunities up in Alberta that you've kind of spoken to before, that'd be great. Thank you.

We are currently making progress on the prefeasibility study in Alberta with our partner. These projects are closely aligned with what we're doing at Project Permian and the multi-pack pre-FEED that Brian and the team are overseeing. We're expecting to gain valuable insights from these efforts, which will help us determine both the project size and the timing for these initiatives. On the commercial front, we are in discussions with major tech companies, which is not surprising given the current market interest. Everyone is keen to understand the long-term economics of this plant and how we compare to nuclear energy. It’s noteworthy that the major developments in baseload power today are predominantly gas-based, even as many shift their focus to nuclear as a solution. This is ironic, considering how competitive and reliable clean gas power can be, whether it’s through innovations like Net Power or PCC. Our design positions us as a superior option to other alternatives. The significant demand for combined cycle gas turbines (CCGTs) over the past year, despite minimal increases in the forward gas curve, underscores the abundance and cost-effectiveness of natural gas in the U.S. for next-generation energy solutions. This strengthens our confidence in designing a gas-based system that can reliably meet grid demands, which gives us a significant competitive edge. Our gas-based solution is a major advantage for us. Once we navigate through the current push to add as much generation capacity as possible—largely through readily available CCGT technology—we believe that as the industry stabilizes and shifts towards integrating clean and reliable generation, technologies like Net Power will excel. We have the time needed to perfect our technology and ensure it is economically viable, allowing us to compete effectively with carbon-emitting options and other clean technologies. We are committed to getting it right for the benefit of our shareholders.

Great. Thank you. Any movement internationally you could kind of speak to? Love to hear.

No, not really. There are areas in the international markets that we're very interested in. For instance, the Baker Industrial program they are launching with Woodside presents intriguing international opportunities, particularly in the LNG sector. However, when we analyze where this plant makes the most economic sense, North America, specifically the US and Canada, stands out due to access to low-cost gas and a favorable carbon pricing policy in the US with the 45Q. Thus, the US is the most advantageous location, and we plan to initiate our cost-reduction strategies there. As we manage to lower our capital expenditures and transition into manufacturing mode, we may begin to explore some international markets where the economic conditions for gas-based solutions are less favorable. However, as we've mentioned in previous calls, we could easily operate solely in the United States for the next 20 years and remain successful. While we will eventually consider expanding into other markets on an opportunistic basis, concentrating all our resources in the US is likely the best decision for the business and a prudent approach to avoid excessive general and administrative expenses while pursuing too many opportunities.

Understood. Thank you so much. Appreciate you taking my questions.

Thanks, Wade.

Thank you. We reached the end of our question-and-answer session. I'd like to turn the floor back over for any further or closing comments.

Okay. Thank you, everybody, for joining us on our call today. This is a pretty dynamic market. Net Power is a pretty dynamic technology. We're going to continue to adapt responsibly to the market's needs. And I think today is probably no better example of we need to be nimble, we need to be reactive and responsive, with an unwavering focus on the long-term vision of delivering low-cost, clean, reliable, affordable power. So, appreciate everybody's support, appreciate everybody's long-term view, and look forward to chatting with you all next quarter.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today.