Good day, everyone, and thank you for participating in today's conference call. I would like to turn the call over to John Ciroli as he provides some important cautions regarding forward-looking statements and non-GAAP financial measures contained in the earnings material or made on this call. John, please go ahead.

Thank you, and good day, everyone. Welcome to Montauk Renewables earnings conference call to review the second quarter 2025 financial and operating results and developments. I'm John Ciroli, Chief Legal Officer and Secretary at Manta. Joining me today are Sean McClain, Montauk's President and Chief Executive Officer, to discuss business development; and Kevin Van Asdalan, Chief Financial Officer, to discuss our second quarter 2025 financial and operating results. At this time, I would like to direct your attention to our forward-looking disclosure statement. During this call, certain comments we make constitute forward-looking statements and as such, involve a number of assumptions, risks and uncertainties that could cause the company's actual results or performance to differ materially from those expressed in or implied by such forward-looking statements. These risk factors and uncertainties are detailed in Montauk Renewables' SEC filings. Our remarks today may also include non-GAAP financial measures. We present EBITDA and adjusted EBITDA metrics because we believe measures assist investors in analyzing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles. Additional details regarding these non-GAAP financial measures, including reconciliations to the most directly comparable GAAP financial measures can be found in our slide presentation and in our second quarter 2025 earnings press release and Form 10-Q issued and filed on August 6, 2025. These are available on our website at ir.montaukrenewables.com. [Operator Instructions] And with that, I will turn the call over to Sean.

Thank you, John. Good day, everyone, and thank you for joining our call. On June 13, 2025, the EPA released the partial waiver of the 2024 cellulosic biofuel volume requirement, the RFS standards for 2026 and 2027, the partial waiver of the 2025 cellulosic biofuel volume requirements and other changes in their proposed rule. The final 2024 cellulosic biofuel volume requirement was reduced from $1.090 billion to $1.010 billion D3 RINs. This reduction was based on actual volumes of D3 RINs generated in 2024. In addition, the EPA is making cellulosic waiver credits available for 2024 and as an additional compliance flexibility measure for obligated parties. This final rule has limited direct impact to Montauk as we have sold all of our 2024 RINs. For 2025, the EPA has proposed cellulosic biofuel volumes for 2025 to be reduced from $1.376 billion to $1.190 billion RINs and to make cellulosic waiver credits available for 2025. These proposals, coupled with the EPA's biogas regulatory reform rule of matching the production of RNG with the dispensing of RNG to transportation appear to have limited the pricing level at which the D3 RIN currently trades. The proposed cellulosic biofuel volume requirements for 2026 and 2027 are $1.300 billion and $1.360 billion D3 RINs, respectively. In justification of these lower- than-expected volumes and the suggestion that small refinery exemptions be potentially revisited, the EPA has expressed their view that cellulosic RIN generation from biogas, CNG, LNG during 2026 to 2030 will be constrained by the total usage capacity of CNG, LNG as transportation fuel. In the first quarter of 2025, we entered into an agreement with Pioneer Renewables Energy Marketing to form a joint venture, GreenWave Energy Partners. The primary goal of the joint venture is to help address this limited capacity of RNG utilization…

Thank you, Sean. I will be discussing our second quarter 2025 financial and operating results. Please refer to our earnings press release and the supplemental slides that have been posted to our website for additional information. Our profitability is highly dependent on the market price of environmental attributes, including the market price of RINs. As we self- market a significant portion of our RINs, a strategic decision not to commit to transfer available RINs during a period will impact our revenue and operating profit. The impact of the EPA rule making associated with the implementation of BRRR K2 separation and the extension of the 2024 RIN compliance period has temporarily impacted our commitment timing of our 2025 RNG production. At June 30, 2025, we had approximately 3 million RINs generated and unseparated. We expect this timing between RINs generated but unseparated and RINs available for sale to only impact 2025, which is the year BRRR became effective. We had approximately 108,000 RINs in inventory from 2025 RNG production as of June 30, 2025. These RINs were transferred in July under a commitment entered into in June 2025 at a price of $2.42. The average D3 RIN index price for the second quarter of 2025 was approximately $2.36. Total revenues in the second quarter of 2025 were $45.1 million, an increase of $1.8 million or 4.1% compared to $43.3 million in the second quarter of 2024. The increase is primarily related to timing of revenues recognized under a short-term fixed price contract in the 2025 second quarter when compared to the amount of RINs available but unsold at June 30, 2024. Partially offsetting this impact was a decrease in realized RIN pricing during the second quarter of 2025 to $2.42 compared to $3.12 in the second quarter of 2024 and a…

Thank you, Kevin. In closing and though we don't provide guidance as to our internal expectations on the market price of environmental attributes, including the market price of D3 RINs, we are reaffirming our full year 2025 outlook provided in May 2025. For 2025, we continue to expect our RNG production volumes to range between 5.8 million and 6 million MMBtus with corresponding RNG revenues to range between $150 million and $170 million. We note that these ranges have not changed relative to our 2025 expectations as we continue to manage through regulatory uncertainty. We continue to expect our 2025 Renewable Electricity production volumes to range between 178,000 and 186,000 megawatt hours with corresponding Renewable Electricity volumes to range -- revenues to range between $17 million and $18 million, again, unchanged from our previous guidance. And with that, we will pause for any questions from our analysts.

[Operator Instructions] Our first question comes from the line of Matthew Blair from TPH.

And I have 2-parter here. The first is on the D3 RVO. And Sean, thanks for your comments to start thins off. But it looks like this year's D3 RIN generation is on pace not just to easily exceed the RVO for 2025, but also the proposed numbers for 2026 and 2027. Are you sharing anything that the EPA may reconsider these composed numbers and move them higher? Like is there any hope for a better RVO for the RNG space? And then the second question is you highlighted that RNG OpEx moved up in the second quarter. It sounds like that was mostly onetime preventative maintenance, media change-outs, things like that. It looks like the royalty share also moved up to about 21% in Q2 versus 19% in Q1. Would you expect that royalty share to stay around 21% for the third and fourth quarters? Or would that move down as well?

I will take the first part related to the RVO. As we're all aware, the RVO is still within a common period. And obviously, a data point that they are taking into consideration is that imbalance between the run rate of production and generation of D3 RINs and what the RVO proposed to be set. And so that continues to be evaluated by the EPA with that potential change pending. Kevin, perhaps you can comment on the OpEx.

Yes. And yes, we expect to not have the approximate $1.8 million within RNG and the $1.4 million within our REG segments to recur in the second half of the year. These were planned expected preventative maintenance items that, again, occur generally once a year. So that's why we wanted to highlight the fact that we had these preventative maintenance impacts incurring now primarily in the second half of this year, and we don't expect to incur those levels of expense in the second half of this year. Specifically in regards to that royalty calculation, that was a onetime -- we address our Pico earnout quarterly as we're reporting based upon our expectations of future results of our Pico location. However, the increase this quarter was related to a discrete impact of us receiving our final tranche increase of feedstock [ Manor ] associated with the expansion of feedstock that led to our building and commissioning the CFTR increasing our digestion capacity. With us receiving that final increase and making a final payment to the dairy for that [ Manor ] increase, we reduced our discount rate, i.e., we reduced the risk of us not receiving that. So it was a sort of a formulaic calculation associated with a discount rate in our expectations as opposed to anything necessarily changing with the results or operations at Pico. So that onetimer influenced our second quarter RNG royalty expense. And on a run rate standpoint, we would expect that production revenue, notwithstanding on our tiered royalties to normalize back at that approximate 20% level.

Our next question comes from the line of Tim Moore from Clear Street.

Just a couple of quick questions. Your operating and maintenance expense rose significantly since last October, [ it's in the ] revenues. You discussed -- which was nice to quantify the discrete $1.8 million, $1.4 million other expenses that won't really be incurred at that level in the second half. Are there any other expenses you can think of as you look at your projects, whether it's swine, anything else you're doing that might drag down some of the profitability in the second half of this year or early next year? Just kind of curious about that as we kind of look at the second half of this year and into next year.

Thanks for the question, Tim. Generally, we see -- we do some planned outages at our facilities early in the year. Specifically some outages at our McCarty location with a planned outage that drove an increase in power controls and equipment controls and things like that. But generally, for the second half of this year, we don't expect those large onetimers to continue in the second half. If you look back at our first half of this year compared to first half of last year, you'll see that generally -- for our existing locations, we generally incur higher expenses in the first half versus lower expenses in the second half. So presuming that our timing of outages continue, I would expect that, that run rate, if you will, in the future to continue. However, occasionally, our outages are impacted if we receive word from our outbound utilities that there's going to be some outages impacting us. We might change the timing of our planned outages or if we are looking at other preventative maintenance that indicates that we need to do something else with the equipment at either an RNG or a power site, we might move that around. But a long-winded way, Tim, of saying that as of right now, as we're entering into our detailed bottoms-up budgeting for 2026, I don't necessarily anticipate any change from our historical run rate of 2025 or our second half of 2025 expectations being lower than the first half of this year nor a robust change in our timing or overall level of expenses into 2026.

So just a summary of things that could happen, not things that we have any anticipation of. One other comment that's probably not material, but at least worth mentioning is if you're looking at operating expenses on a percentage basis of production or revenue, there is a baseline of noncapitalizable costs associated with our build-out at Turkey. And so where you will see those costs continue, they're not currently paired with production or revenue and have a disproportionate impact as your onboarding staff and personnel and you're doing certain things to run the facility equipment that we've already commissioned down their utility charges and whatnot. Those things will continue to ramp up, but what will be significant is when we get into the early part of '26, it will be matched with your revenue and your production coming from that new facility.

Our next question comes from the line of Betty Zhang from Scotiabank.

I wanted to ask about the JV that you announced. Could you please elaborate on perhaps what's the nature of that JV and a big contribution by the partners? And maybe should we understand it as distribution of RNG? How should we think about that?

I think the best way to explain or give a little more detail behind that JV is the comments that we made regarding the positioning that the EPA has been taking. As they've been adjusting the RVO for the -- proposed RVO volumes for this year in the outward years, they've been explaining. They've been very verbal about that they have this concern that the growth and the usage of RNG into transportation is not growing at the pace of the potential production of RNG, knowing that, that's your critical path, no pun intended, for the generation of the 3 RINs, they have slowed the growth percentages that they've applied to those RVOs. And so rather than fixing volumes at lower pricing, or looking for alternative usage of the feedstock biomethane for something other than the production of RNG and the underlying RIN, we have focused on trying to form pathway opportunities that are new, unique proprietary that qualify for these transportation usages. The ability to do that, that has been acknowledged by the EPA is an opportunity to offset those perceived growth slowing of the usage of the RNG into transportation and allow for that to be more commensurate to the growth of the production of RNG should go well to offset the approach that the EPA is currently taking to try and keep those growth volumes slower, but at a minimum, opens up the opportunity short term for a large amount of volumes that the industry is claiming that do not have a home for usage in the RNG transportation space.

And then also, Betty, to address your contribution question, we've contributed approximately $2.3 million and subject to various triggers and requirements within the underlying agreement, we can contribute potentially up to an additional $2.1 million. So our contribution in the form of capital could approximately up to $4.5 million as well as the technical understanding and know-how associated with transacting RINs. The other partners are bringing in what we would consider the IP, the relationships and these new and unique pathways to dispense third-party volumes and separate K3 from K2 RINs.

Our next question comes from the line of Tim Moore from Clear Street.

So Sean, for the North Carolina Ag swine project, when might you get a better understanding maybe of the expansion potential there? It seems like it would just be highly incremental margin as you build that out more and the demand there ramps up. And just curious, investors are always asking me, beside that project, what else you're the most excited and enthusiastic about as you look out the next 12 to 18 months for the company?

That's a great question, Tim. Obviously, before we seek to do rapid expansion of that opportunity in North Carolina, it's critical to the company that we commissioned the first phase of this, and it's done so with predictable long-term fixed price offtake arrangements. The opportunity to do that and to take advantage of the enhanced legislation has really caused a very refined focus and optimization as to what it is that we intend to do in North Carolina, predominantly address the growing need for the farming community to remove this waste from their core business and to do so in a way that removes the most amount of noncaloric liquid and to have a very optimized dry pelletized product that is specifically now for the generation of just electricity and take full advantage of that legislation change that was passed at the end of the year. The expandability, you are correct. There is an economy of scale there that can be reached quite enthusiastically with the optimization of the farm side collection, the optimization of the pelletization and the continued suite of combustible fuel supply that comes out of our patented reactor process that allows for you to continue electric generation to segue into gas generation and the continuation of a valuable biochar product that is used as fertilizer and soil amendments. There's a lot of directional flexibility that happens on a project that has -- the way that we are building this. The opportunity for both the electric and the gas interconnections, the opportunity for pelletized waste, the opportunity that we have on this campus for rail transportation that could allow for us to reach beyond not only from a feedstock inlet, but also a production outlet in the form of the pelletized waste that we're creating. There's a…

And Tim, we could also point you to the press release yesterday between Montauk Renewables and Emvolon for the joint development -- joint venture between our companies that was mentioned in today's call for the 50,000 gallons per year of green methanol looking to be produced.

Thank you, everyone. This concludes the question-and-answer session. I would now like to turn it back to Sean for closing remarks.

Thank you, and thank you for taking the time to join us on the conference call today. We look forward to speaking with you when we present our third quarter 2025 results.

Thank you for your participation in today's conference call. This does conclude the program. You may now disconnect.