Excelerate Energy, Inc. (EE) is a global leader in the liquefied natural gas (LNG) industry, providing innovative and flexible solutions to meet the world's growing energy demands. With a focus on downstream infrastructure, Excelerate has established itself as a trusted partner in delivering cleaner and more reliable energy to markets across the globe.
Company History and Background
Founded in 2003, Excelerate has a rich history of pioneering LNG technology and services. The company's story began with a focus on providing flexible LNG solutions, including integrated services along the LNG value chain. Excelerate offers a full range of flexible regasification services, from floating storage and regasification units (FSRUs) to infrastructure development, to LNG and natural gas supply. Since its inception, the company has completed more than 2,900 ship-to-ship transfers of LNG with over 50 LNG operators, showcasing its operational expertise and industry leadership.
Excelerate Energy, Inc. was formed as a holding company to own a controlling equity interest in Excelerate Energy Limited Partnership (EELP), a Delaware limited partnership. As of September 30, 2024, George B. Kaiser and his affiliates owned approximately 76.9% of the ownership interests in EELP, with the remaining 23.1% held by Excelerate. This ownership structure has provided the company with a strong foundation for growth and strategic decision-making.
Strategic Partnerships and Investments
In 2018, Excelerate made a significant move by acquiring a 45% ownership interest in a joint venture with Nakilat Excelerate LLC. This joint venture provided $220 million of financing for the Exquisite, one of Excelerate's FSRU vessels, through a sale leaseback agreement. The company recognized this transaction as a failed sale leaseback, treating it as a financing due to the company's lease of the vessel. This strategic decision has contributed to Excelerate's financial flexibility and asset optimization.
Industry Challenges and Adaptability
Throughout its history, Excelerate has faced various challenges typical of the LNG industry, including time delays, unforeseen expenses, cost inflation, and materials or labor shortages. These challenges have at times resulted in delayed receipt of payment or existing or anticipated project cancellations. The company has also had to navigate the competitive market for LNG regasification services and changes in the supply, demand, and price of LNG and natural gas and LNG regasification capacity. Additionally, Excelerate's operations outside of the United States have been subject to varying degrees of political, legal, and economic risk. Despite these challenges, the company has consistently demonstrated its ability to adapt and thrive in the dynamic LNG market.
Operational Excellence
Today, Excelerate operates a fleet of 10 purpose-built FSRUs, which have safely delivered more than 7.1 trillion cubic feet of natural gas through 16 LNG regasification terminals worldwide. The company's impressive track record includes over 3,000 successful ship-to-ship LNG cargo transfers, a testament to its operational excellence and commitment to safety.
Financials
Excelerate's financial performance has been impressive. For the full-year 2024, the company reported record adjusted EBITDA of $348 million, surpassing the high end of its guidance range. Net income for the year came in at $153 million, marking a 21% increase over the prior year. This strong financial showing underscores the resilience and profitability of Excelerate's business model, which is underpinned by long-term, take-or-pay contracts that provide consistent revenue and cash flow.
For the most recent fiscal year, Excelerate reported revenue of $851.4 million and net income of $32.9 million. In the most recent quarter, the company generated revenue of $274.57 million and net income of $10.9 million. The company's operating cash flow for the quarter was $49.62 million, while free cash flow was negative $13.93 million.
Excelerate operates in two main business segments: FSRU and terminal services, and gas sales. The FSRU and terminal services segment, which generates the majority of the company's revenues, saw growth in the third quarter of 2024. For the three months ended September 30, 2024, FSRU and terminal services revenues were $150.14 million, representing approximately 78% of Excelerate's total revenues. This segment experienced a $16.96 million increase in revenues compared to the same period in 2023, primarily due to new time charter party agreements in Brazil and Germany.
The gas sales segment, on the other hand, experienced a significant decline. For the three months ended September 30, 2024, gas sales revenues were $43.28 million, representing approximately 22% of total revenues. This segment saw a $99.01 million decrease in revenues compared to the same period in 2023, primarily due to the completion of Excelerate's natural gas sales agreement in Brazil in December 2023 and fewer LNG sales opportunities in the Asia Pacific region.
Liquidity
The company's balance sheet remains robust, with $538 million in cash and cash equivalents as of the end of 2024. This healthy liquidity position, combined with $327 million of available capacity on its revolving credit facility, gives Excelerate significant financial flexibility to pursue strategic growth initiatives. The company's debt-to-equity ratio stands at 0.13, indicating a conservative capital structure. Excelerate's current ratio and quick ratio are both 3.49, suggesting strong short-term liquidity.
Future Growth and Expansion
One key initiative is the company's newbuild FSRU, currently under construction in South Korea. Slated for delivery in 2026, this state-of-the-art vessel will be capable of delivering 1 billion cubic feet per day of natural gas, further solidifying Excelerate's position as a premier provider of flexible LNG solutions. The company is actively engaged in discussions with potential customers regarding the vessel's deployment, underscoring the strong demand for its high-performance assets.
Excelerate's growth strategy extends beyond its FSRU fleet, as the company continues to explore strategic investments in LNG import terminals and complementary downstream infrastructure. These efforts aim to broaden the company's market presence and unlock incremental opportunities for LNG and gas sales, driving additional earnings growth in the near to mid-term.
For 2025, Excelerate expects adjusted EBITDA to range between $340 million to $360 million. Maintenance capital expenditures for 2025 are projected to be between $60 million to $70 million, while committed growth capital is expected to range from $65 million to $75 million, including the next two milestone payments for the new FSRU build (Hull 3407). The final payment for this new FSRU, estimated at around $200 million, is expected in mid-2026.
Industry Outlook and Company Positioning
The LNG industry has faced its share of challenges in recent years, from geopolitical tensions to supply chain disruptions. Yet, Excelerate has consistently demonstrated its ability to navigate these headwinds, leveraging its operational expertise and financial strength to deliver exceptional results for its shareholders.
Looking ahead, the company remains well-positioned to capitalize on the growing global demand for cleaner energy sources. The United States, now the world's largest LNG exporter, shipped 88.3 million tons in 2024, up 4.5% from the previous year. The US Energy Information Administration expects the country's LNG export capacity to more than double between 2024 and 2028, presenting significant opportunities for companies like Excelerate.
Conclusion
In conclusion, Excelerate Energy, Inc. (EE) is a standout performer in the LNG industry, with a proven track record of operational excellence, financial discipline, and strategic vision. As the world continues to grapple with the challenges of energy security and sustainability, Excelerate's innovative solutions and unwavering commitment to its customers make it a compelling investment opportunity for those seeking exposure to the dynamic LNG market. With its strong financial position, robust growth pipeline, and strategic focus on flexible LNG solutions, Excelerate is well-positioned to capitalize on the evolving global energy landscape and deliver long-term value to its shareholders.