Release Date: February 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you provide insights into the return profile and development steps for the McNeil Ranch acquisition? A: Amanda Brock, President and CEO, explained that the McNeil Ranch was acquired at an attractive price and offers significant optionality due to its location and subsurface characteristics. The ranch is strategically positioned for future disposal needs and has already received permits for disposal capacity. Development is expected in the 2026-2027 timeframe, with CapEx underwritten by long-term contracts. The acquisition also reduces operating expenses by eliminating landowner royalties for disposed volumes.
Q: What is the strategy for future dividend growth, and do you have a specific target or yield in mind? A: Stephan Tompsett, CFO, stated that while there is no explicit target for dividend payouts, the company aims to grow shareholder returns sustainably. The recent 33% dividend increase reflects strong performance and confidence in the business outlook. Future increases are expected to be more consistent but at a lower growth rate than the recent hike.
Q: How do you plan to integrate the McNeil Ranch into existing operations, and what synergies do you expect? A: Amanda Brock highlighted that disposing of water on the ranch eliminates royalty payments, reducing operating expenses. The ranch's location is synergistic with existing infrastructure investments and contracts, providing operational advantages and positioning the company for future growth opportunities.
Q: Can you provide an update on the desalination and mineral extraction projects and any potential revenue streams in 2025? A: Amanda Brock noted that significant revenue from these projects is not expected until 2026. The company is progressing with iodine and magnesium projects and has filed for a permit for surface discharge of reclaimed water. Draft permits are anticipated by year-end, with operations expected to begin in 2026.
Q: What are the capital requirements and customer commitments for the Red Bluff Treatment Facility? A: Amanda Brock stated that there is considerable interest from customers in accessing the facility's capacity. The project will be a collaborative effort with partners, focusing on technology, design, and operation. The company plans to conduct a Front-End Engineering Design (FEED) study by the end of the year as the project progresses through regulatory processes.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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