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Greetings, welcome to the NET Power Inc. first quarter 2026 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone requires operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Bryce Mendes, Director of Investor Relations. You may begin.

Thank you. Good morning, everyone, and welcome to NET Power's first quarter 2026 earnings conference call. With me on the call today, we have our Chief Executive Officer, Danny Rice, our President and Chief Operating Officer, Marc Horstman, and our Chief Financial Officer, Lee Shuman. Yesterday, we issued our earnings release for the first quarter, ended March 31, 2026, along with an updated investor presentation. Both are available on our investor relations website at ir.netpower.com. During today's call, our remarks will 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, which are discussed in our SEC filings. We assume no obligation to update any forward-looking statements. With that, I'll turn the call over to Danny Rice, NET Power's Chief Executive Officer.

Thank you, Bryce. Good morning, everyone. I'm here today with Marc Horstman, our President and Chief Operating Officer, and Lee Shuman, who recently joined us as our new Chief Financial Officer. Lee brings a strong track record in energy project finance, and we're glad to have him on board this pivotal period in our company's history. Let me tee things up for Marc and Lee with some comments on the macro, and then we'll open the line for questions. Demand for power continues to grow, and I think everyone at this point understands the primary source of new power generation for the foreseeable future will come from natural gas-powered equipment. The availability, the reliability, and scalability is unmatched. The thing that's different with AI versus other forms of load is the cost of power is very inconsequential to AI economics.

That's mostly because the cost of power is only 10% of the total cost of AI. The lion's share of the cost are the GPUs, the networking costs, and data center shell. AI has become a race and will be decided by speed and scale, governed by availability of power, not the cost of power. Power projects, they've evolved quickly from waiting on the grid to now pursuing behind-the-meter power now. Generation mixes have evolved from large frame turbines to hundreds of reciprocating engines strung together to get the same gross power output. Heat rate, overnight cost, and geography, they've all become far less important. In this market, speed, scale, and community acceptance matter most of all. Fortunately, the U.S. energy industry, particularly the one that revolves around natural gas, is ready to meet this demand.

We are part of that ecosystem with a very specific mission to transform natural gas into the lowest cost form of clean, firm power. Clean power is moving down the list in terms of importance. That's not to say if clean, reliable power was available in the same timeline and scale as the unabated options, there's a good chance it should be selected. That's where we find ourselves today. We've put ourselves in an excellent position to deliver a clean, firm solution that can deliver first power this decade at a compelling price point with a pathway to under $100/MWh. This can be achieved in West Texas, where there's abundant low-cost gas-to-power generation and sufficient storage capacity for captured CO2 by pairing it with enhanced oil recovery.

This proven application can underwrite the development of over 10 GW of clean, firm power generation for less than $100/MWh. Trying to do this elsewhere would be 20%-30% higher cost of power, but the greatest cost would be longer timelines, greater risks, and less scale. What it will come down to for us is if we can deliver at speed and scale to attract demand today and is the market willing to accept EOR as a viable pathway for carbon capture. The importance of energy availability is no more pronounced than it is today. As I just mentioned, we need as much natural gas for power generation as we can. Fortunately, we're in a great spot there.

Separately, the global energy shock caused by the Ukraine war has cast a spotlight on the importance of energy security for natural gas and oil. The U.S., as the largest producer of both commodities, is mostly insulated from this supply shock so far. However, the situation has become an important lesson to people that the oil ecosystem isn't contained to just gasoline for cars. It's jet fuel, it's plastics, it's fertilizer, all irreplaceable at the scale and cost the world needs. If modern civilization and quality of life is indispensable, then so too is oil, which sort of leads me back to the mousetrap that we're designing.

We're designing a circular energy ecosystem that leverages the two most important energy sources we have on this planet, utilizing low cost, reliable natural gas to produce reliable, low cost power at massive scale and using technology to capture nearly all of its produced CO2 and then using this CO2 to help produce oil that wouldn't otherwise be recoverable. What stays behind in the reservoir forever is our captured CO2. We think that's the right solution for what the U.S. needs for the foreseeable future.

More natural gas power generation, more domestic oil production, lower emissions overall. On the life cycle emissions point, our third-party validated life cycle emissions analysis calculation, or LCA, is estimated at roughly 210 g of CO2 equivalent per kilowatt hour, which compares extremely favorably versus an unabated combined cycle of around 440 g of CO2 equivalent per kilowatt hour and coal at north of 900 g/kWh. If improving the environment is important to you, this product checks that box. We'll continue our public pushing campaign to move the buyer ecosystem toward our vision of clean firm power. The good news is we expect to have answers to this in the coming months. As Marc will talk about in a second, we've done everything we can from an engineering and technology standpoint to design a de-risked, clean firm power solution.

Before we move forward with committing any substantial amounts of capital to securing additional equipment, we need to ensure the customer demand is not just there, but is committed to our projects. We're going through this process right now with our strategic advisor, so to help determine which prospective customers are aligned with our timeline and our vision. I can tell you not everyone wants to be associated with oil production, and that's okay. If no one wants to be associated with EOR, even in spite of the environmental and social benefits that come from this ecosystem we're creating, it's better that we learn that before we commit any additional capital to it. The projects we're advancing help make the world a better, cleaner, and safer place. Market acceptance, we think, will come down to three things. First, are we doing it fast enough?

Speed really matters in this market. Second, are we doing it big enough? Scale also really matters in this market. Third, is it clean enough? More pointedly, are customers aligned with our energy ecosystem of using natural gas to create clean firm power and using the CO2 to produce more oil to help support the quality of life of modern society? To us, it's a no-brainer, but again, we're not the customer. We're only the creator of these solutions. In the background, we're advancing detailed engineering and project financing, understanding they come together at the finish line with the commercial offtake. We're progressing all three simultaneously. With that, I'll turn it over to Marc to update you on the great progress we've made bringing the solution to the doorstep of FID and commercialization. Marc.

Thank you, Danny. Good morning, everyone. I want to walk through 3 areas this morning: the commercial offtake structure, project execution for Project Permian phase I, and an update on our progress with our key technology partner, Entropy Inc. Let me start with offtake. Turning to slide 5. We have engaged a strategic advisor to lead the formal offtake process for Project Permian phase I. The offtake agreement is the gating condition for project financing, and it is the primary commercial proof point that a durable market exists for our clean power product. This slide shows commercial structure we have designed around NET Power's deployment offering. The flexibility here is deliberate. The first deployment is 80 MW, grid connected via ERCOT Interconnection, pursuing a fixed price long-term PPA as the offtake structure and CO2 sequestration through Oxy's EOR infrastructure.

The second and third deployments introduce optionality, either continued grid delivery or behind the meter co-location at a larger scale. All three phases use Oxy EOR infrastructure for sequestration. Slide six shows the full picture of what we're building and the timeline to get there. Project Permian Phase I is the commercial deployment of the clean power product. 80 MW net output, greater than 90% CO2 capture, sited on leased acreage from Oxy near Midland, Texas. We continue to target FID in the second half of 2026, with commercial operation in early 2029. Project pairs a natural gas combined cycle configuration with Entropy's post-combustion carbon capture technology. Power delivery is grid connected at 80 MW. CO2 is 100% offtake to Oxy under indicative terms, which are advancing towards definitive agreement.

As mentioned, this site has the potential to scale to 800 MW, 10 units on the same acreage, which is a meaningful part of the commercial story we are telling to offtakers who want volume certainty over time. On the gas supply front, we're targeting an MOU with a major supplier in Q2, with definitive agreements negotiations to follow. On procurement and long lead equipment, we're executing a methodical release program running in parallel with our offtake and financing work streams. The Siemens RPS gas turbine packages, approximately $77 million, is contracted and represents the first executed equipment commitment. The switchyard and gen tie line and [generate transfer targeted for the June timeframe. HRSGs, steam turbine generator, and air-cooled condenser are targeted for July. Most likely, PCC equipment, absorber towers, and amine regen systems follows in the August through September window.

Finally, I want to highlight our product breakdown structure work underlying all of this. We had to find eight to 10 equipment packages +10 to 20 discrete skids. This is the foundation of our repeatable clean power product. Design once, order and build many. Every decision we make on this project reduces non-recurring engineering costs for future deployments. Turning to slide seven, a few updates on our Entropy relationship and the technology foundation beneath it. The Joint Development Agreement with Entropy is the most critical near-term corporate deliverable. The JDA governs the commercial terms under which NET Power will license and commercialize Entropy's amine-based PCC solvent technology for U.S. power generation through 2032 on an exclusive basis. Entropy can commit up to 49% equity contributions for future deployments, beginning with Project Permian phase I.

We are aligned on the commercial structure and intend to finalize this agreement in Q2. Entropy has a proven track record. Glacier phase 1 has been running for more than three years, demonstrating capture from gas compressors at a commercial scale. Glacier phase II is expected to come online in Q2, 2026. This is at the same site, expands with more compressors and integrates a gas turbine with CCS at commercial scale, capturing 160,000 tons per annum. When that comes online, it further validates the core technology integration that Project Permian is being built on. This is a significant de-risking event for our project and for the offtake conversation. Project Permian is the next direct scale-up of the PCC tech. two 35 MW turbines, 380,000 tons per year of CO2 capture. TRL eight to nine.

This is not a novel configuration. It is a disciplined scaling of a demonstrated design and technology. With that, I'll turn it over to Lee for the financial update.

Thank you, Marc, good morning, everyone. I'll keep this brief. I'm pleased to be on my first quarterly call as NET Power CFO. I look forward to getting to know many of you over the coming quarters. I spent the better part of 25 years developing, financing, and restructuring power infrastructure, thermal, renewable, distributed, across a range of structures and market cycles. In total, I've been involved in power transactions valued north of $10 billion. Most recently, I led power financing at Javelin Global Commodities. Before that, I was CFO at WattBridge Energy, where we raised just over $2 billion to develop a 2.4 GW portfolio of natural gas peaking plants in Texas. Prior to that, I held roles at Mirant, which later became GenOn and was subsequently acquired by NRG, developing, financing, optimizing, restructuring, and selling power assets domestically and internationally.

I've also worked with startup renewable developers to successfully develop projects and execute bankable deals in a very different framework from larger, more established organizations. This is important context because NET Power's situation is one I recognize. An asset with potential for contractable cash flows, proven underlying technology, and a capital structure that needs to be built from the ground up. That's the work I know how to do, and it's why I'm excited to step into this role. Additionally, based on my experience with NET Power over the last month, it is clear to me that the team has the expertise and the drive to do the hard work to deliver on Project Permian and beyond. Turning to our financials, we ended the first quarter with approximately $319 million in cash and cash equivalents and no debt.

We incurred a few one-time costs associated with pausing the oxy-combustion program. We expect go-forward spend to be more for the PCC program. Our G&A burn is fairly low, roughly $8 million-$9 million per quarter, giving us fairly long runway to reach FID. We expect the spend to ramp up in the coming months as we re-release critical long leads to maintain our project schedule. As Danny mentioned in his remarks, we remain prudent in committing capital to this first project. Positive indications for the first project and future projects will give us confidence to risk release long lead items and potentially secure additional equipment. On project economics, the TIC target remains in the $475 million-$575 million range.

On the financing side, we're targeting an equity investment from NET Power in the $125 million-$175 million range, with the balance of capital coming in the form of debt and equity participation from Entropy Inc. We have the capital on the balance sheet to fund that today and sufficient dry powder to begin working on the next phases of the first project or the next project elsewhere in West Texas. As Danny mentioned, the commercial offtake process is the most consequential near-term event. A target of $100/MW or better supports project bankability and an appropriate return profile. This price point is markedly below other clean firm options, which is in part due to EOR application and access to low-cost natural gas. I look forward to providing more updates in quarters to come. Let's open the line for questions.

Thank we will now be conducting question-and answer session. If you will like to ask question please press star one on your telephone keypad a confirmation tone will indicate your line is in the question queue you may press star two if you want to remove your question from the queue. For the participant using speaker equipment it may be necessary to pickup your handset before pressing star key. Once again if you like to ask question please press star one on your telephone keypad a confirmation tone will indicate your line is in the question queue you may press star two if you like to remove your question from the queue. For moment as we pause for question. Your first question comes from the line of Ryan Levine from Citi. Please go ahead. Excuse me, Mr. Ryan Levine, your line might be muted.

Thank you. Thanks for taking my question. You had mentioned $8 million-$9 million of burn before some of these long lead time items need to be procured. What milestones would be needed to procure those long lead time items? Any color around how that burn rate would evolve as you progress through different development milestones? Hello?

Hey, Ryan, it's Danny.

Hey, Ryan.

I'll turn it over to Marc to answer. Go for it, Marc.

Can you guys hear me?

Yes, we can hear you.

All right. Excellent. Sorry about that. I have mute issues as well, Ryan. Hey, Ryan, Marc Horstman. Predominantly around the long lead equipment, it's really referring back to what Danny mentioned in his opening comments. You know, through the offtake process that we have ongoing right now, we need to see significant call it activity and alignment with potential offtakers that would support, call it, the next step in releasing those long lead or pre-FID purchase orders. From that standpoint on, our team is actively working with our potential EPC and GCs on further detailing our construction schedule. As you can imagine, the lead times that we're seeing on certain equipment is moving around based on the activity in the marketplace.

It's really a month-to-month look at what equipment we need to release as we continue to keep pulse with those vendors in order to maintain that first half 2029 COD schedule. The first and foremost evidence information that we're looking for is really that, again, is there a market there for the clean power? Is there a path forward for our product on the expansion, you know, from the 80 MW to something larger at the project site.

Assuming you're able to achieve commercial interest to advance at least that component of the development cycle, in terms of regulatory approvals, would this have to go through their batch study process, or how are you looking around the regulatory elements to achieve commerciality?

From the standpoint of deploying the first 80 MW, we're going through our air permitting process now, which looks like, based on our recent discussions and meetings with the Texas permitting office, looks like that we would have an air permit towards the second half of this year. That proceeds quite well. The remaining permits that we would need in order to bring the project through commercial operation are planned, and we see very little risk on those moving forward. From that perspective, everything seems to be moving along. Obviously, we stay close to it as we evolve because this is the first time this technology is going through the permitting process.

Thus far, between the interaction between Entropy, ourselves, and the Texas Commission on Environmental Quality, everything seems to be quite aligned and, call it permitting levels are within the acceptable limits.

Last question from me. In terms of the equity check from NET Power to fund the project, they're cited a range. Have those commercial terms been negotiated, or what are the factors that would lead to where you'd fall in that range?

Yeah, Ryan, this is Danny. I think the range is really a function of what the rest of the capital stack looks like. You know, as Marc Horstman sort of mentioned, in his remarks, you know, with the JV with Entropy, they'll have participation rights alongside us for 49% of the equity. There's certainly flexibility on both sides as to what each respective party's equity check is gonna look like. Really, the balance of the plan is gonna be financed with debt in some form or fashion.

I think that's one of the things that Lee and I will really be figuring out over the next couple of months, sort of in parallel with the offtake process is, you know, is the financing gonna be in the form of equipment financing, or is it gonna be more in standard sort of project financing that's sort of underpinned by the contracted cash flows of the project? The commercial process that we're going through is really gonna be very instructive in terms of what forms of credit is gonna be available to this facility. I think a combination of the form of credit and the entropy participation is sort of what gets us back to that $125-$175 range.

Even at the high end of that range, the $175, you know, we're sitting here with, you know, a little over $300 million of cash in cash equivalents on the balance sheet today. We'll have pretty sufficient dry powder to get working on either the next phase of this specific project or, you know, assuming obviously the commercial demand is there, an additional project elsewhere within the Permian Basin.

Great. Thank you.

Yep. Thanks, Ryan.

There are no additional questions at this time. I would like to turn the floor back over to Danny Rice, CEO, for closing comments.

Thanks everyone for the time this morning. Ryan, thanks for the questions. We are at an interesting moment for NET Power. The macro environment has continued to move in our direction. Power demand's accelerating. The case for clean firm power, it is still there. There's just no other solutions being deployed. Our solution in West Texas is as well-positioned as it's ever been. We've done the hard work on the technology and the engineering side, and what's in front of us now is the commercial process, which I think is the right place for us to be. We feel good about where we are. The offtake process is active. The Entropy JDA is closed.

The equipment program is moving and Lee already adding real value on assisting me on the financial architecture. None of these work streams are waiting on each other. They're sort of advancing in parallel and they'll come together at FID. You know, as I sort of mentioned in the comments, we'll be measured in how we commit capital, but we're genuinely optimistic about what the next few months will show us. We expect to have meaningful updates to share with you all, and we look forward to having those conversations. Thanks again for your interest in NET Power and have a great day.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines and have a wonderful day.

Greetings, welcome to Net Power Inc. fourth quarter 2025 earnings conference call. At this time, all participants are on a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone requires operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Bryce Mendes, Director, Investor Relations. Thank you. Please go ahead.

Thank you. Good morning, everyone, and welcome to Net Power's fourth quarter and full-year 2025 earnings conference call. With me on the call today, we have our Chief Executive Officer, Danny Rice, and our President and Chief Operating Officer, Marc Horstman. Yesterday, we issued our earnings release for the fourth quarter and full-year ended December 31st, 2025, along with an updated investor presentation. Both are available on our Investor Relations website at ir.netpower.com. During today's call, our remarks will 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, which are discussed in our SEC filings. We assume no obligation to update any forward-looking statements. With that, I'll turn the call over to Danny Rice, Net Power's Chief Executive Officer.

Thanks, Bryce, and thanks, everyone, for joining us this morning. Marc and I are glad to be here, and we have quite a bit of ground to cover. I'd ask you to pull up the investor presentation and follow along as we walk through it. After our prepared remarks, we'll open the line for questions. Let's start on slide three, and I want to set the stage with a bit of framing before we get into the specifics. When we look at the executive summary on slide three, what you're seeing is a company that made a decisive strategic call at the end of last year and is now executing against it. We pivoted away from oxy-combustion as our primary near-term commercial vehicle, and we did so deliberately. Oxy-combustion is a remarkable technology, and we're preserving that work carefully. Meanwhile, there's a pathway to the same destination.

Natural gas power with greater than 90% carbon capture that can be executed with equipment that exists today on a timeline that matches the urgency of the market. That path is a combined cycle gas turbine paired with post-combustion carbon capture, GT plus PCC. Proven turbines, proven solvent-based capture technology, and with the right partner, Entropy, the integration of these two proven systems into a single bankable project is now within reach. This is not a retreat from our mission. Net Power's mission has always been to transform natural gas into the lowest cost form of clean, firm power. That mission is unchanged. What changed is we found a more direct route to get there and the intellectual honesty required by us to take it.

Now let me turn to slide four, which covers the macro backdrop because I think this context is essential to understanding why we believe the timing of this decision is exactly right. We're in the early innings of what may be the most significant build-out of power generation infrastructure in American history. AI data centers are the proximate cause, but it's bigger than that. You have AI-driven hyperscale compute demand. You have industrial re-onshoring. You have the electrification of transportation and industry. All of this converging simultaneously on a grid that hasn't had meaningful baseload capacity in decades. In ERCOT, the Texas grid, it's ground zero for this collision. The load growth being projected in West Texas alone over the next five to 10 years is staggering. It's not a theoretical forecast. You can see it in the permitting activity, in the interconnection queues, and in the conversations we're having.

What every one of those conversations comes back to is the same thing: speed and reliability. Power buyers are not sitting around waiting for the perfect clean solution. They are racing to secure any electrons they can trust to show up 24 hours a day, seven days a week, 365 days a year. What we're seeing is a pragmatic reordering of priorities. Environmental idealism hasn't gone away, but it's being subordinated to an immediate physical reality. You cannot run a hyperscale data center on intermittent power. You cannot build a $10 billion compute campus and hope the wind is blowing or that new nuclear can be built at a price never achieved before, and certainly not in this hyperinflationary cost environment for new infrastructure. Natural gas is different.

The U.S. has among the lowest cost natural gas reserves on Earth, 50+ years of supply in proven basins from Appalachia to West Texas. The honest question is whether we can advance technology that reduces the environmental impact of natural gas combustion because natural gas is what we have and is what we need right now. That's where we live. If there was any doubt about how central domestic oil and natural gas are to this country's economic security and physical safety, the last three months have been about as clear a reminder as you could ask for. We just came through one of the harshest winters on record, and the U.S. kept the lights on without missing a beat, not because of solar, not because of wind, but because we have an abundant, reliable supply of natural gas in the generation infrastructure to dispatch it on demand.

At the same time, we are actively engaged militarily and diplomatically to ensure that global oil supply chains remain in reliable hands because the world does run on oil and the U.S. understands the consequences of that supply falling under the control of adversarial actors. These are not abstract geopolitical concerns. They are a direct expression of how important domestically produced fossil fuels remain to our national security and economic prosperity. They reinforce, in the starkest possible terms, why the answer to our energy challenge is not to wish away natural gas or oil, but to figure out how to produce more of it domestically and use it more responsibly and more cleanly. That is what we are doing. The good news is that the policy environment is beginning to confirm this view.

The 45Q tax credit now provides parity between CO2 sequestration and CO2 utilization for enhanced oil recovery, and that's significant for us. EOR, or enhanced oil recovery, is the process by which captured CO2 is injected into oil formations to recover additional oil. Beyond the incremental production benefit, the CO2 stays underground permanently, so you get a direct economic credit for the carbon capture. It supports domestic oil production and U.S. energy security, and it enables a meaningful reduction in the cost of clean power. In West Texas, where we have both the Permian Basin's vast oil formations and abundant low-cost gas, EOR is what makes the economics of our first project genuinely compelling. It's not a workaround, it's an integral part of the value chain. The bottom line in the macro is this. The need for clean, firm baseload power has never been greater.

The policy support for CCS has never been stronger. The geography we're developing in, West Texas, is exactly where load growth and energy resources are converging the fastest. We believe Net Power is in the right place with the right solution at the right time. With that, let me turn it over to Marc to walk you through what we've been building.

Thanks, Danny. Good morning, everyone. I'm gonna take you through the business progress across three areas, the status of our product development, where we stand on Project Permian, and how our commercial pipeline is developing. Let's start with slide five. The foundation of everything we're building is the integrated clean power product. Two Siemens SGT-A35 gas turbines, prepackaged by Relevant Power Solutions, paired with Entropy's post-combustion capture system, designed for greater than 90% CO2 capture. Our integrated clean power product represents something the market hasn't seen before. A fully pre-engineered power plant that combines a natural gas combined cycle with post-combustion carbon capture into a single standardized design. By working directly with Entropy, WSP, and our OEM partners to deliver modular pre-engineered components, we will have systematically reduced the execution risk that has historically plagued first-of-a-kind projects.

The plant is entirely air-cooled, eliminating water dependency, which dramatically expands the addressable geography and significantly relaxes a traditional siting constraint. Because our product is built on commercially proven technology configured to a repeatable standard, we enter Project Permian with high confidence in performance, reliability, and availability. With each deployment, our design matures, our procurement leverage grows, and our cost curve improves. We're not building one plant, we're building a product. This is the product that will be deployed at our first project called Project Permian in West Texas. We passed our conceptual design review, CDR, and we're now working with WSP Engineering to advance the detailed design. Major equipment packages are progressing as well. We have the two modular gas turbine packages on order. Delivery is targeted for early 2028, and we're working through the commercial selection and structure of our EPC.

The product design CDR milestone is a meaningful de-risking event because it confirms that the integrated system can be engineered to specification, and that our cost assumptions are grounded in real engineering, not just estimates. On the Entropy partnership, this is a critical workstream. Entropy is a global leader in solvent-based post-combustion carbon capture. Their technology has been deployed commercially in Canada at their Glacier facility, and we expect the Glacier phase II commissioning this summer to provide real-world validation data for the performance assumptions underlying our clean power product. We are in the final stages of completing our joint development agreement with Entropy. We expect to finalize definitive agreements in Q2. Upon signing, Net Power will make a strategic equity investment in Entropy, and we will structure a joint venture for Project Permian, with Entropy co-investing.

Securing Entropy as an equity partner, not just a technology licensor, is an important structural element of how we design this partnership because it aligns their incentives and performance directly with ours. I also want to spend a moment on product economics, because this is an area where I think the market may still be underappreciating what we put together. When you benchmark our integrated GT plus PCC solution in West Texas against every other clean firm power alternative, nuclear, geothermal, solar plus storage, our product is cost competitive across a wide range of capital costs and gas price assumptions. That's not a promotional statement. It's the output of rigorous independent benchmarking we've done. With West Texas gas prices and utilizing the 45Q EOR credit pathway, the LCOE of this plant is in range that makes sense for power buyers and delivers returns that make sense for equity investors.

That's a combination that, frankly, we weren't sure we'd be able to demonstrate when we started this process. We're much more confident in it now. On that note, I want to flag an important upgrade to the plant design that occurred through fourth quarter. When we last spoke with you in November, the plant was configured for approximately 60 MW of net electrical output. Through our design efforts and product engineering with Entropy, we restructured the configuration and now approximately have 80 MW of net electrical output. A roughly 33% increase in generation capacity from the same site footprint and roughly the same capital envelope. Equally important, the redesign also reduced performance risk on the carbon capture side. We now have higher confidence in the capture rate assumptions underlying the project economics. That's a meaningful step forward on both the revenue side and the risk profile of the project.

Turning to slide six and path to our financial investment decision. Our FID target is the second half of 2026, with a targeted commercial operations date of early 2029. If we hit that date, Project Permian will be the first commercial natural gas plus CCUS project in the United States. That's a milestone that the industry and our customers will notice. To get that FID, there are four major work streams running in parallel right now. First, product and project engineering. We need to advance the detailed design to a point where we can execute our EPC contract and provide lenders with an independent engineer report they can stand behind. Second, long lead equipment commitments. There are line items that require commitments well before FID in order to protect the COD timeline.

We're targeting approximately $50 million in pre-FID long lead commitments by mid-year, and we'll be coming back to update you on that as the year progresses. Third, project financing. We're in the process of selecting a financial advisor to run the project finance process, and we have engaged with prospective lenders and co-equity investors. The project economics are strong and we believe Project Permian is financeable. The project is designed to meet the return thresholds required by institutional infrastructure investors. Fourth, offtake, which I'll cover on the next slide. It is important to note site control is in place. We have an executed ground lease with Oxy. Grid interconnection is progressing with Oncor with a targeted interconnection date of 4Q 2028. The basic project infrastructure is established. Turning to slide seven, the commercial picture. Securing offtake is the most important thing we'll do this year.

Let me give you a sense of where we stand. Our most advanced discussion is with Oxy, our site landlord and a natural commercial partner. Oxy takes the CO2 offtake for enhanced oil recovery. That's the core of the EOR economics Danny described. We are in active negotiation on the power purchase structure as well. Beyond Oxy, we have a growing pipeline of prospective offtake relationships across industrial, utility, and data center verticals. There are discussions progressing with a hyperscale data center developer in West Texas for a potential behind the meter arrangement that could be significantly larger than phase I. on the order of 300 MW. The breadth of this pipeline validates the thesis that our market for clean, firm dispatchable power is real and growing. The conversations we're having today are categorically different from the conversations we were having even a year ago.

Customers are not asking us whether they need clean baseload power. They're asking us how fast we can deliver it. Our goal for this year is to have a signed offtake agreement or MOU at pricing at or above $100 per MWh, which is the level that supports project bankability and delivers returns we believe are appropriate for the risk profile of a first-of-a-kind project. We're working hard to get there, and we expect to be able to share more on this front in coming quarters. Before I hand it back to Dan, I want to make one more point that I think is important context for how we've been thinking about the long-term value of this site. Permian phase I is an 80 MW project, but this is not an 80 MW site.

This location with its land, its gas access, its CO2 offtake infrastructure with Oxy and its interconnection, has the capacity to support a much larger power complex. We believe this single site can scale to approximately 800 MW as we replicate and expand the plant configuration. That means the infrastructure we're building, the relationships we're establishing, and the operational knowledge we're accumulating with Permian phase I are not just the foundation for one project, they're the foundation for what could become one of the largest clean, firm power campuses in the country. That scale potential is a meaningful part of how prospective customers and co-investors are evaluating this opportunity. Danny will say more about it. I'll hand it back to Danny.

Thanks, Marc. I want to cover two things before we open for questions. First is our financial position, and second is how we're thinking about the financing of Project Permian. We'll close with a few broader thoughts. We ended the fourth quarter with approximately $379 million in cash equivalents, and investments, which came in above our internal targets for the quarter. I think that really reflects the disciplined capital management through the transition. We wound down work streams that were no longer core. We right-sized our cost structure and we kept our powder dry. We have the financial runway to execute the Permian phase I FID process deliberately. That matters when you're making a first of its kind investment decision.

On project financing, I want to give investors a clear picture of how we're thinking about this, because it's an important dimension of the Project Permian story. There are essentially three ways to fund a project like this. The first is 100% equity, which is we and our co-investors write the full check. No external debt. Simple, but it's very capital intensive. The second option is equipment financing. A meaningful portion of this plant's components, particularly the power island, the gas turbines, the HRSG, the steam turbine, the electrical equipment. These are proven, commercially marketable assets that lenders understand well. You can finance against them, much like you'd finance a fleet of industrial equipment without requiring the full project finance structure. That gets the equity requirement down to roughly $0.75-$0.80. Better, but we think we can do better still.

The third path is full project financing. Non-recourse debt secured against the project's long-term contracted cash flows. That's really what we're pursuing. If done right, project financing gets the equity requirement down to roughly $0.25-$0.35. The difference in capital efficiency between option one, 100% equity finance, and option three, the project finance, is enormous. It's the difference between Project Permian phase I being a use of our balance sheet and being the launch of a capital efficient, scalable platform. Now I'll be direct about where the work is. Post-combustion carbon capture at this scale on a U.S. natural gas power project is new. PCC, it's a bit like the Loch Ness Monster. Everyone's heard about it, but project finance lenders haven't seen it operating in the wild in the U.S. power sector before.

Entropy has been doing this commercially in Canada for years, so the technology itself is not speculative. Getting infrastructure lenders fully comfortable with PCC performance assumptions requires education, it requires data, and it requires some handholding. That's part of the work ahead of us, and it's precisely why the Glacier 2, phase II commissioning that Entropy is doing this summer matters so much. Real operating data from a live commercial plant accelerates that conversation dramatically. The other piece that unlocks project financing is strong offtake. Creditworthy long-term power purchase agreements are what give lenders the cash flow certainty to underwrite the debt. Which is why, as Marc said, signing offtake is our single highest priority for the year. Marc's point about scale is really worth reinforcing because it directly informs the financing strategy.

When a prospective lender or equity partner looks at Project Permian phase I as the anchor of a 500 MW-800 MW campus, they're not just evaluating a small first of its kind project. They're evaluating the first chapter of a major clean power platform in the fastest growing power market in the U.S. That framing changes the risk reward conversation meaningfully. Every major data center developer we speak to is thinking in terms of GW, not MW. The fact that we have a site that can grow into that demand with established infrastructure and a proven operational model is genuinely differentiating. To close, the mission is clear, the strategy is decided, and the execution is underway. This year's milestones, the Entropy JDA, long lead equipment commitments, signed offtake, and project financing are what stands between us and FID.

We're working every one of those work streams with urgency. We look forward to updating you on our progress in the quarters ahead. With that, let's open the line for questions. Turn it over to the operator.

Thank you. The floor is now open for questions. If you would like to ask a question, please press star one on your telephone keypad at this time. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. Again, that's star one to register a question at this time. Our first question is coming from Martin Malloy of Johnson Rice. Please go ahead.

Good morning. Thank you for taking my questions. Just on the pricing on the offtake, I think you mentioned $100 a MWh. Can you maybe give us some perspective for out in that area, what the competitive landscape looks like?

Hey, Marty, it's Danny. Good to hear from you. Yeah, I think, I mean, it's really interesting. If you look at just kind of what's transpired over the course of the last few years, we've certainly seen prices start to move up, not just on the merchant side of ERCOT. You know, I think, if you go back a couple of years or shoot, you go back 12 months and you look at what's the forward curve sort of suggesting power prices in ERCOT are gonna be. You know, if you went back last year or the year before last and you looked at the strip for 2028, 2029, 2030, that forward curve was at $40-$45 per MWh. If you look at that curve with where it is now, you're talking about $65-$70.

This is just merchant unabated. You know, this is just power from the grid. You've seen almost an 80% increase in just wholesale power prices in West Texas, you know, towards the end of this decade, which is when this plant's gonna come online. That's sort of like what's actually there on the commercial merchant side. I think where things are really interesting is you're looking at, if we are looking at where power prices are for new contracted capacity for firm delivery, which means potential co-located, and ignoring the clean piece. You know, we're hearing chatter of those conversations north of $100 per MWh if you're trying to get new capacity online before the end of this decade.

I think that really reflects the importance of reliability, of speed, and I think equally important of the scale piece. I think what we haven't seen in the market is what are people willing to pay if it's fast, if it's scalable, if it's reliable and it's lower carbon intensity. That's a market that just hasn't yet been established and I think we're gonna be the first solution out there that establishes what that market is. I think the really compelling piece for us is, you know, compared to where we were at on the oxy-combustion and you needed a power price well north of $130-$150 per MWh to be able to make the math pencil out.

That's not a price point we need before this clean gas solution with Entropy. I'll just say like I think we're gonna be in that ZIP code where it's a compelling price for the counterparty and it's a compelling price for us that pencils out on project economics both on the equity side but also on being able to support project finance on the debt side.

Okay. That's helpful. For my follow-up question, just wanted to ask about the potential for government support on the financing side. Anything to maybe mention there regarding the DOE?

Yeah, I mean, I won't get into any of the specifics, but I think, you know, if you look at what this administration is really pushing for and what they're really encouraging, it's really shoring up domestic energy supply. That goes across the board. That's not just for fossil, it's for anything from rare earth metals. Certainly, as you look at just oil and gas and the importance that they both play in terms of just national energy security, those two are at the top of the list.

If you look at solutions that align with this administration, solutions that can utilize domestic energy supply, unlock new domestic energy supply, help firm up the grid, help bring down grid prices from where they're trending, and can do so in a responsible way for the environment, that's ultimately something that this administration is highly supportive of. I think everybody on the call would agree with that. The interesting thing about this solution where we're using domestic natural gas, super low cost natural gas, to firm up the grid in a really scalable way that enables both the AI build out that is an existential threat if we don't win, while at the same time boosting domestic oil production. There's very few solutions.

Actually, there's zero solutions in the world that are trying to do that right now. We are trying to do that right now because we think it's the right thing for the country, we think it's the right thing for consumers, and we think it's the right thing for the shareholders. This solution really does align with this administration. Certainly that does become something that I would say the government's not just potentially supportive of on a verbal piece, but I think potentially on a financial piece, whether it's grants, whether it's loans, it's gonna be a pathway that we pursue because this is probably one of the few solutions that fully aligns in a very comprehensive way across all of the energy solutions that this administration wants to see succeed.

Great. Thank you. That was very helpful. I'll turn it back.

Thanks, Marty.

Thank you. Our next question is coming from Wade Suki of Capital One. Please go ahead.

Good morning, everyone. Appreciate y'all taking my questions. Just real quickly just to expand a little bit on Marty's question on Project Permian. Could you give us an updated sense for, you know, project costs, total project costs there?

Yeah, we can give you some, like, rough numbers on sort of what we're seeing right now. Wade, I'll turn it over to Marc to give you some of his approach to it.

Yeah. Wade, hi. Marc Horstmann. Just a little bit of background. In the last couple of months, we've gone from, you know, call it the conceptual design of the product. You know, as we continue to work with Entropy, we've worked with an EPC and then also major OEM vendors to really spec out and understand the overall plant design. As you know, there's a lot of many factors that go into play relative to the TIC itself and then also relative to, call it, the competitiveness of the LCOE. Right now we're sitting in, and we just, as I stated, passed through the conceptual design phase.

You know, we're sitting from a range of, you know, call it the upper $400s to the upper $500s. Call it $475-$575 is what we're looking for as a range. That range supports obviously the economics that we talked about in the presentation today. I think it's worthwhile noting as we advance through the design ahead of FID, this will allow us to achieve that pre-engineered project, which will give us a, you know, call it a firmer view on cost as we move forward.

I can tell you that, you know, as we look at our overall design and our product solution, you know, the risk around that product solution, at least the risks that are out of our control is, you know, as Danny has mentioned around the AI race and, you know, around the speed to power, those risks around OEM pricing and what that does or what it doesn't do is something that we're gonna be looking at closely. As we stated, we're in a pretty good position right now because we've secured the gas turbines and the gas turbine packages, and we look to begin to secure some of the other long lead equipment, this summer, even in advance of FID.

Appreciate it.

To add a little bit to that, on the CapEx piece. The CapEx is a little bit higher than what we were projecting before. I think some of that is inflationary in nature, where I think people are expecting. I think some of it is design changes. You know, Marc talked about us being able to boost the capacity of the facility from 60 MW to 80 MW. There's CapEx associated with that. All of that, at the end of the day, is really intended to really drive down the LCOE. I think when we look at things on an LCOE basis, they're sort of still in that same range. I think what's really helpful to understand is, you know, how does CapEx of the facility translate into equity needs of the project?

Because I think at the end of the day, that's where the rubber really meets the road, is what is our equity share of the capital spend gonna be? If you're in that call, like $550 million range and we're able to get this thing fully contracted on the PPA side, on the offtake, you know, we're in a really good position to be able to secure project financing, which would be around 65% of the total capital spend. That's around, you know, $350 million of debt.

That leaves an equity plug of $200 million, and that's a $200 million equity check that would be, you know, assuming Entropy and Brookfield participate alongside us for their equity share of the project. You know, we would be at around $100 million, $105 million for our equity share of that first project. We certainly have the capital on our balance sheet to be able to fund that. So we're sitting in a pretty good position. But again, it requires, you know, those two things to come into place, the PPA and certainly securing the project financing as we get through this year.

Fantastic. That's really helpful. Thank you so much. The second question, I might have missed it in the presentation. Just so you know, I always ask you about the commercial pipeline. I might have missed it, but is there any update on the MISO project or even beyond MISO? Or are you just focused on Project Permian for now?

I think we really have the horse blinders on a little bit on West Texas. West Texas in general, with a specific focus on the first project, on that one site that you know, I think when you look at the slide, you know, it's the first phase of that is this 80 MW project that Marc described in pretty good detail. You know, as you can see on that slide, that's a site that can accommodate 800 MW. That's a pretty sizable block for clean firm power. That area is the focus right now. I think when you look at just the economics and where we can generate the lowest cost clean firm power, that is ground zero for it.

Certainly more so than MISO. You know, we still have optionality around that MISO site. I think everybody saw, you know, we disclosed, you know, we pulled out of the MISO queue late last year because of just rising costs of what the interconnect was gonna be. It just didn't make sense for us to put that capital into MISO when we continue to see such great opportunities to reallocate that money to West Texas. The focus really for the foreseeable future is gonna be on the West Texas opportunity. I would say a lot of it is economic driven, and I would say like the other part is it's just opportunity driven.

The opportunities that we're gonna see in West Texas that we're seeing right now are worthy of us spending as much of our time there as possible.

Great. Thank you very much. Appreciate it.

Thank you. The next question is coming from Noel Parks of Tuohy Brothers. Please go ahead.

Hi. Good morning. You know, one thing I was interested in was just clearly you've been talking with these different potential customers around the offtake. I'm just wondering if you could kinda characterize the parties you're talking with around why they're particularly interested in the Net Power solution as opposed to the handful of other often also gas related type generation options they might have.

Yeah. Hey, Noel. It's Danny. I'll take a first crack at that, and Marc can certainly fill in all the holes. I think you know, the reality of just the situation that we have at hand today is, and maybe it's worth stepping back and sort of just reviewing kind of what's transpired over the last three to four years. You know, three to four years ago, I think the world and certainly you know, the broader tech community was thinking, we don't need new natural gas power generation. We'll be able to go to nuclear. We'll be able to go to renewables. We're gonna have battery storage. We don't need to build new natural gas power generation. We'll eventually be able to find a way to decarbonize without it. I think our I think Net Power's singular, you know, mission has always been, you know, the best way to decarbonize is actually just to capture the CO2, not to try to move away from natural gas, but continue to lean into natural gas and just with new technologies, find ways to capture it, just given how low cost natural gas power generation is. So that mission has always been there. I think the thing that's really interesting now is you fast forward to where we are today, and I think everybody's just accepted that there's no way we're gonna be able to meet this load growth without new natural gas power generation.

It is a little bit of a conflict in a way of there's this maybe some reluctance to be able to use natural gas, but they need to embrace it, otherwise they're not gonna win. They're not gonna be able to build the data centers. They're not gonna win the AI race. They're not gonna be relevant, because somebody else will do it. I think everybody has fully embraced natural gas for what it is, which is the most reliable, most scalable, most affordable form of energy for power generation in history.

Everybody sees natural gas as the foundation of being able to win the AI race, to be able to meet the load growth that we're seeing across the entire electricity system. How do you do that in a way while still not totally conceding your environmental goals? You need to find ways to be able to introduce new technologies that decarbonize. I think it is quite remarkable. While I think there is this absolute focus on speed to power, that is absolutely paramount, I think the opportunity that we see is can we introduce decarbonizing natural gas solutions that don't compromise on speed to power and to a certain extent, don't compromise on affordability of the power, while still giving them the reliability that they come to expect from natural gas power generation.

Those sort of three key characteristics is what Marc and the team have been designing around. It's the speed piece, it's the reliability piece, and it's the certainty of capture. That's certainly one of the reasons why, you know, we've partnered up with the Entropy folks is they're really the only proven PCC solution that's been operating in the wild for the last few years, and they have great experience there. They understand how to do it. When you pair that up with the availability of gas turbines, which they are available, and I think we've demonstrated that because we've secured a handful of them so far for the first project.

All of a sudden, you're in a place where we can deliver the same sort of speed that you'd come to expect from anybody else that was going to build an unabated gas power plant. I think the proposition is fairly straightforward. You can have the speed to power, you can have the reliability of the power on the same timeline you would from an unabated gas power plant. Now you can do it with 90% carbon capture, which essentially means 90% lower emissions than you would get from the unabated version. I think there's going to be places where you won't be able to do the capture, which is most of the United States.

Shoot, when you're in a place like West Texas, where we are, and we have a strategic partnership with Oxy, who has been a leader in CO2 sequestration for the last couple decades and needs as much CO2 as they can possibly get their hands on for EOR, it creates a pretty, compelling setup where this isn't just a pathway to do a single project, a one-off project. It really is the project that becomes the cornerstone of many gigawatts of potential clean gas power that we can install in West Texas, you know, over the next five to seven years. The speed piece, the scale piece, the reliability piece, all of it's there.

You just get the added benefit of the clean piece that I think everybody at the end of the day is trying to figure out how are we going to do that, knowing that we're going to have to build a lot of natural gas power generation over the next decade.

Great. Thanks a lot. You know, what you were discussing just now sort of brings to mind something I have heard some of the other alternative generation technology vendors talk about, and that's that regarding contract terms with, for example, data center hyperscaler customers, they're saying that issues of time limits, of course, are top of mind, issues of price. You know, there's so much urgency that it's not that that's totally on the back burner, but certainly it's you know, the urgency surge that seems to be swamping prices to some degree.

One wrinkle I've heard a company talk about is that as far as agreement duration, that they are seeing some focus on in the event that a behind the meter project for a power project for a data center, in the event that an interconnection becomes available, say, five years down the road, that the customers are giving a lot of thought to what would that look like, the opportunity to connect to the grid with the technology that they have. Of course, the stability and interruptibility issues that gas addresses will still be very much a high priority, but that there is possibly sort of a transition point ahead, you know, looking out to that horizon.

I was wondering if that's something that had come up in your discussions.

Yeah. You're talking about the transition from behind the meter or fully islanded to eventually being grid connected, right?

Yeah. The option emerging of, you know, they've been in the queue for half a decade, and finally it's within sight that the interconnect may be possible. They're just thinking about how to, you know, how and to what degree to sort of integrate into the grid then.

No, I think it's fairly widely known that, you know, the sort of reliability that a lot of these large compute campuses need, like the reliabilities need to be extremely high. You're talking about whether it's three-nines or five-nines reliability. That's something you can typically get from the grid, which is why the grid becomes an ideal place to want to get your power from. I think a lot of these behind the meter solutions, if you're designing it right, you can achieve the same sort of three-nines or five-nines reliability. You certainly cannot do it with like a single large frame gas turbine or two large frame gas turbines. You won't be able to get there. You really need to fill in all the holes.

You know, this is something that's really in Marc's swim lane. Maybe I'll let Marc talk a little bit about sort of what that behind the meter sort of configuration looks like. I would just say what we're designing is really compatible with both sort of applications. Like we could put this power onto the grid and sell it through a virtual PPA or in front of the meter PPA.

We can also do the behind-the-meter solution, which is sort of the fastest go-to-market for a lot of the potential customers today who want to skip the interconnect altogether. Marc, do you want to add some color to that one?

Yeah. Thanks, Danny. I think it goes back to our overall product design and design philosophy. You know, we selected gas turbines that are known and reliable. They're able to load follow. Couple that with the PCC technology that Danny spoke to before that is proven. It allows us to meet the initial needs of speed to power, but also clean power in the timeframe that folks are looking for. You know, what's key with that is the product selection puts us in a call it 80 MW-90 MW block, which is a really nice block that most of our customers are looking for when they build data center applications and look at growing their data center demand.

You're able to phase that sort of growth with the data center construction as well. Which allows it to also, if a grid connection becomes available, this solution is excellent from the standpoint of being able to provide either that firming power or the load following that's needed when you have the intermittent renewables that are on the grid. I think we've got the right product mix that threads the needle, if you will, from the needs of the current demands, but then also supplies the power and the firming that's needed for the grid, based on where the project is located.

Great. Thanks a lot.

Our next question is coming from Betty Jiang of Barclays. Please go ahead.

Hi. Good morning. I wanna first ask about the offtake conversations, just given it's so important. Marc, you characterize that as conversations look is very different now than even a year ago. Can you just give some more color on what specifically the hyperscalers are looking for or what's perhaps holding them back? Is it the confidence in the technology? Is it scalability, timing, or what is it that you guys need to address in the subsequent months to get them comfortable?

Yeah. Hi, Betty. This is Marc, and then, certainly, Danny can jump in and add some color. You know, I think it's a lot of the things that you just hit on. I think it's from the. I'll add a couple of to it. I think from the standpoint of the actuality of folks bringing the projects to bear, for either the behind the meter solutions that they're looking for or the grid connections. The realities of bringing all the different aspects of the projects together are quite difficult. I think that Net Power, we sit in a unique position with the relationships that we have with the land and the work that we've done relative to our site, that we're able to bring those solutions together.

With what I just spoke to before, the technology being existing technology that we're able to meet their speed to power demands, they certainly see this as a solution that truly makes sense, and something that is viable, that provides firm, clean power. I think also from the standpoint of being in West Texas, the abundance of gas and the ability to price the gas so competitively allows our solution to really fit in to provide that power and then also the clean power.

I think as we continue to work with those hyperscalers and again, the product size, the ability to match their data center, their growth demand, from the initial, call it the initial phases, but then able to supply the half a gig or gig or solution that meets their overall demand, whether it be a behind the meter or a physical PPA, it has and will continue to change the conversation. I think as we progress the conversations, the overall acceptance or discussions around the use of EOR.

As Danny alluded to, you know, our solution along with our partners, which really fits in with the, call it the narrative of shoring up the U.S. grid capacity and the power to enabling gas supplied power generation is really providing a unique solution that there's only a few that are able to provide.

Okay. Thank you for that. Just on slide seven, the different phases, is that just the first? Is that for that single project? Is it an extension of Project Permian?

Yeah. That's exactly right. Right now we're calling that top row Project phase I. that's the, you know, call it first of kind, first of type proof of concept. As we look at deployments two and three, they could really be in whatever size range fits, you know, ultimately whatever offtaker that we would sign. Whether they need, you know, the 300 MW in deployment two or deployment three, then we would size that accordingly based. Typically, it's based on the data center construction schedule. The fact that our solution is gas turbine agnostic allows us to be really flexible from the standpoint of selecting gas turbines that are available in order to meet that timeframe.

Great. Sorry, one more follow-up, if I may. Danny, just on the equity financing comment you made earlier. So assuming 55% of the project being financed, that's a bit higher than the earlier comment on a best scenario of closer to 25%, 30%. Maybe just what's the risk in that you took there and, you know, what do you think could happen for that equity component to be even lower?

Yeah. Yeah. Betty, maybe I misspoke, but we're targeting on project financing, we're targeting 65% debt, so 35% equity. I think before I was talking about the equity portion would be 25%-35%. Yeah, we're targeting 65% debt, so 35% equity, which, you know, on a $550 million headline CapEx number, you know, you're talking about $100 million of equity net to Net Power. That's sort of what we're targeting.

It could certainly be higher, you know, if you get a solid PPA where you can support a higher debt service coverage ratio, which is sort of just like the primary metric to utilize to sort of right-size the debt capacity. You could certainly see the equity portion be a little bit lower than that. We feel like that 65% debt coverage is sort of like the middle of the fairway sort of target that we're going after.

Got it. No, thank you for the clarification.

Yep.

Thank you. Our next question is coming from Nate Pendleton of Texas Capital Bank. Please go ahead.

Good morning. Thanks for taking my questions. Perhaps for Marc, going back to slide seven on the larger deployments. When your team is designing these modular plants, can you talk about the potential for cost reductions in these potential larger deployments? Would it just be on the front end with the site, or could there be material cost reductions with any integration possible between the modules?

Yeah, thanks, Nate. It's actually both. Certainly from the standpoint of designing and developing a product allows us to, you know, have minimal engineering and when you're at the same site, you really have reduced engineering 'cause you're redeploying that same product over and over again as the phases are needed. That was a part of the key selection of the megawatt block that we were targeting to make sure that we hit that, call it the construction phase or the power on phase that hyperscalers want for their data center growth. Then as you kinda hit the nail on the head, as you deploy more and more of the same product, your leverage with supply chain just continues to increase, as well as you're gaining productivity in the field.

Your EPC, your general contractor that's doing the installation just continually gets better at the installation. Then that also continues on through the startup and commissioning process. As a part of the looking at this as a product solution, it allows us to capture lessons learned from the very first implementation of Project Permian phase I, and then we will, you know, ruthlessly apply those lessons learned prior to deploying the next phase, so that we can continue to drive costs down as we advance.

Got it. Thanks for that detail. I wanted to touch just for a moment on oxy-combustion. Given the prior partnership with Baker Hughes and their pursuit of the industrial scale oxy-combustion plant designs, can you provide some detail around if that use case is still being pursued and maybe what the suspension of the JDA means in the context of future development of the oxy-combustion plants?

Yeah. Thanks. I think the best way to sum it up is that both partners have suspended as we continue and will continue to evaluate the viability of the industrial product. We continue to work that and support that as much as we can. You know, once we have that determination, we'll certainly communicate it as necessary.

Understood. Thanks for taking my questions.

Yes, sir. Thank you.

Thanks, Nate.

Thank you. At this time, I'd like to turn the floor back over to Danny Rice for closing comments.

All right. Thanks, everybody. We just wanna say thank you for the questions, for the support, for the trust you guys place in this team. You know, what we are doing, which is commercializing natural gas power with full carbon capture at scale, it's never been done before, and we're doing it in a market that's growing faster than anyone anticipated. I think everybody appreciates there are challenges, there will be challenges ahead, but we want you to know that this team comes to work every day with a deep sense of purpose. Because if we get this right, we'll have helped solve one of the most important problems facing our country and the world, which is how do we keep the lights on affordably and reliably while leaving a cleaner planet for the next generation? That is important to us.

That's worth every ounce of our efforts, and we are grateful to have partners and shareholders who believe in that mission alongside us. We will talk soon. Thanks again.

Gentlemen, this concludes today's event. You may disconnect your lines or log off the webcast at this time, and enjoy the rest of your day.