Gevo(US:GEVO)2023-08-09 16:00Project Development - Gevo's initial Net-Zero Project (NZ1) is designed to produce approximately 65 million gallons per year (MGPY) of total hydrocarbon volumes, including 60 MGPY of sustainable aviation fuel (SAF) to fulfill part of its 400 MGPY supply agreements [128]. - The installed cost for NZ1 is forecasted to be approximately $850 million, excluding certain contingencies and financing costs [131]. - The U.S. Department of Energy (DOE) has been approached for a loan guarantee to finance NZ1, which is expected to offer the lowest cost of debt for the project [131]. - Gevo is exploring financing options for NZ1, including a DOE-guaranteed loan, which is anticipated to reduce the overall equity required and enhance project returns for investors [133]. - The company is evaluating several sites in the U.S. for its second Net-Zero Project (NZ2), focusing on existing ethanol plants for decarbonization opportunities [135]. - Gevo's NZ1 project is expected to produce approximately 1,390 million pounds per year of high-value protein products and over 34 million pounds per year of corn oil as co-products [128]. - The NZ1 project is forecasted to have an installed cost of approximately $850 million, with efforts to reduce projected spending by $100 million to $200 million [193]. - The company expects to finance the construction of NZ1 using third-party capital while retaining a carried equity interest in the project [196]. Sustainable Aviation Fuel (SAF) - Gevo's SAF production process utilizes carbohydrates as feedstock, which are renewable and derived from photosynthesis, aiming for a net-zero carbon intensity across the product lifecycle [125]. - The International Air Transport Association (IATA) predicts that SAF is crucial for achieving net-zero carbon emissions in the aviation sector by 2050, with a target of supplying at least 3 billion gallons of SAF per year by 2030 [124]. - Delta Air Lines has committed to investing $1 billion through 2030 to mitigate emissions, highlighting the growing corporate interest in sustainable aviation fuel [124]. Financial Performance - Total revenues for the second quarter of 2023 were $2,917,000, a decrease of $746,000 compared to the first quarter of 2023 [154]. - Total revenues for the six months ended June 30, 2023, were $6,580,000, a significant increase of 670% compared to $854,000 in the same period of 2022 [157]. - Total operating revenues for the three months ended June 30, 2023, reached $4,238,000, a 4,662% increase from $89,000 in the same period of 2022 [160]. - Gevo reported a net loss of $32,038,000 for the six months ended June 30, 2023, compared to a net loss of $28,834,000 in 2022, reflecting an 11% increase in losses [171]. - General and administrative expenses rose by 18% to $21,369,000 for the six months ended June 30, 2023, compared to $18,061,000 in 2022 [171]. - Project development costs increased by 75% to $5,846,000 for the six months ended June 30, 2023, compared to $3,332,000 in 2022 [171]. - Depreciation and amortization expenses surged by 220% to $9,329,000 for the six months ended June 30, 2023, compared to $2,916,000 in 2022 [171]. - Interest expense increased by $1.1 million for the six months ended June 30, 2023, compared to the same period in 2022, primarily due to interest on the 2021 Bonds [181]. - Interest and investment income rose by $8.5 million during the six months ended June 30, 2023, attributed to higher interest rates on cash equivalent investments [182]. - Net cash used in operating activities was $29.4 million for the six months ended June 30, 2023, compared to $17.2 million for the same period in 2022 [191]. - Cash provided by investing activities was $139.5 million for the six months ended June 30, 2023, with $168.6 million from sales and maturities of marketable securities [192]. - Other income decreased by $2.9 million for the six months ended June 30, 2023, primarily due to a one-time receipt from the USDA in 2022 [183]. Renewable Natural Gas (RNG) - Gevo expects to produce approximately 300,000 MMBtu of RNG in 2023, with plans to increase production from 355,000 MMBtu to 400,000 MMBtu by the end of 2023 [138]. - RNG production volumes increased by 22% from 64 MMBtu in Q1 2023 to 78 MMBtu in Q2 2023 [154]. - Natural gas environmental attributes from RINs generated $4,544,000 in revenue, up 2,023% from $214,000 in 2022 [157]. - RNG production volumes increased by 14% to 142 MMBtu for the six months ended June 30, 2023, compared to 125 MMBtu in 2022 [157]. - Gevo's RNG project in Iowa was financed with $68,155,000 of Solid Waste Facility Revenue Bonds issued in April 2021 [137]. - The company aims to leverage its competitive advantage in the RNG industry to identify and execute new project opportunities [140]. Technology and Innovation - Gevo entered into a joint development framework agreement with Southwest Iowa Renewable Energy in March 2023 to implement Verity technology for carbon inset credits [143]. - The company launched the Verity Tracking Grower System Platform in Q2 2023, allowing farmers to view carbon intensity scores at both farm and field levels [145].