AUSTIN, Texas--(BUSINESS WIRE)--Hyliion Holdings Corp. (NYSE: HYLN) (“Hyliion”), a leader in electrified powertrain solutions for Class 8 semi-trucks, today reported its fourth-quarter and full-year 2022 financial results.

Key Business Highlights

• Achieved new Hypertruck ERX™ commercialization milestone
• Obtained a 10-unit order for the Hypertruck ERX powertrain from DSV Logistics
• Announcing collaboration with Hyzon Motors to jointly develop a fuel cell powered truck
• Met 2022 revenue guidance
• Ended 2022 with $422 million of available capital on the balance sheet
• 2023 operating expense guidance of $130 - $140 million

Executive Commentary

“We remained on track by hitting all our commercialization milestones for the Hypertruck ERX powertrain in 2022. The year was marked by many impactful accomplishments for Hyliion. We achieved our revenue guidance for Hybrid, including full truck sales, we acquired the KARNO™ generator technology from GE, and we obtained 210 orders for production slots for the Hypertruck ERX powertrain,” said Hyliion’s Founder and CEO, Thomas Healy.

Hypertruck ERX System Development

In the fourth quarter, the Company continued the design-verification phase of its Hypertruck ERX system with additional controlled fleet trials, most recently with Ruan Transportation. The Company also launched winter testing.

Overall, Hyliion remains on schedule to start Hypertruck ERX system production in late 2023, as the Company continues to achieve the previously-announced commercialization milestones. This marks the fifth consecutive quarter that the Company has met the commercialization milestones initially laid out on the third-quarter 2021 earnings call.

Hypertruck ERX System Orders

During the fourth quarter the Company received 10 Hypertruck ERX system orders from DSV Logistics, with an option to buy 10 additional units. DSV is one of the largest third-party logistics companies in the world and is focused on expanding its business in the U.S. As the Company nears completion of its development and testing milestones for the Hypertruck ERX system later in 2023, it expects to see an uptick in additional customer orders for delivery in 2024.

Hyzon Motors Collaboration

The Company is announcing a new agreement with Hyzon Motors to develop a fuel cell powered vehicle. This development is the third step in the Company’s multi-stage product roadmap towards a hydrogen future. The vehicle will use Hyliion’s electric powertrain system and Hyzon’s fuel cell technology as the generator. The powertrain will be integrated into a Peterbilt chassis.

“Today, we are announcing an innovative collaboration with Hyzon Motors to jointly develop a fuel cell powered vehicle. Hyzon is an industry leader in developing and manufacturing fuel cells purpose-built for heavy-duty applications, and Hyliion is an industry leader in electric powertrain solutions. We are excited about having the opportunity for our teams to work together,” said Hyliion’s Founder and CEO, Thomas Healy.

Financial Highlights, Operating Expense and 2023 Guidance

In the fourth quarter, the Company recorded $1.1 million in revenue related to Hybrid sales. The Company’s fourth quarter operating expenses totaled $31.6 million for the quarter, $5 million higher than a year ago, mainly due to higher research and development spending. Hyliion ended the fourth quarter with $422 million of cash, short-term and long-term investments, which is expected to be sufficient to fund current commercialization activities for the Hypertruck ERX powertrain, as well as initial development activities for the KARNO product and the Hyzon Motors collaboration project.

For full-year 2022, Hyliion’s net loss totaled $153.4 million, or $124.6 million excluding $28.8 million of one-time research and development expenses related to the KARNO generator acquisition in the third quarter, up $28.5 million (excluding the KARNO acquisition) compared to a $96.0 million net loss in the prior year.

Looking forward, the Company expects full-year 2023 operating expenses to be in the $130 to $140 million range. This estimate reflects continued focus on delivering the Hypertruck ERX system in late 2023 and efforts to develop the KARNO generator technology, the Hyzon fuel cell collaboration project, and other development projects. The Company is also expecting SG&A spending growth to level off in 2023 as it invests further in in-house engineering and development resources.

Fourth Quarter 2022 Conference Call

Hyliion will host a conference call and accompanying webcast at 11:00 a.m. EST / 10:00 a.m. CST on Wednesday, March 1 to discuss its financial and business results, and outlook. The live webcast of the call, as well as an archived replay following, will be available online on the Investor Relations section of Hyliion’s website. Those wishing to participate can access the call using the links below:

Conference Call Online Registration:
https://conferencingportals.com/event/vjUOPPlo
Access the Webcast:
https://events.q4inc.com/attendee/357822431

Full-year 2022 financial results for Hyliion Holdings Corp. will also be filed with the SEC on Form 10-K.

About Hyliion

Hyliion’s mission is to reduce the carbon intensity and greenhouse gas (GHG) emissions of Class 8 semi-trucks by being a leading provider of electrified powertrain solutions. Hyliion offers fleets efficient and practical systems to decrease fuel and operating expenses while seamlessly integrating with their existing fleet operations. Headquartered in Austin, Texas, Hyliion designs, develops, and sells electrified powertrain solutions that can be installed on most major Class 8 semi-trucks, and leverages advanced software algorithms and data analytics to improve overall efficiencies. Hyliion’s goal is to transform the commercial transportation industry’s environmental impact at scale. For more information, visit www.hyliion.com.

Forward Looking Statements

The information in this press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of present or historical fact included in this press release, regarding Hyliion and its future financial and operational performance, as well as its strategy, future operations, estimated financial position, estimated revenues, and losses, projected costs, prospects, plans and objectives of management are forward looking statements. When used in this press release, including any oral statements made in connection therewith, the words “could,” “should,” “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. Except as otherwise required by applicable law, Hyliion expressly disclaims any duty to update any forward-looking statements, all of which are expressly qualified by the statements herein, to reflect events or circumstances after the date of this press release. Hyliion cautions you that these forward-looking statements are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of Hyliion. These risks include, but are not limited to, our status as an early stage the Company with a history of losses, and our expectation of incurring significant expenses and continuing losses for the foreseeable future; our ability to develop to develop key commercial relationships with suppliers and customers; our ability to retain the services of Thomas Healy, our Chief Executive Officer; our ability to disrupt the powertrain market; the effects of our dynamic and proprietary solutions on commercial truck customers; the ability to accelerate the commercialization of the Hypertruck ERX; our ability to meet 2023 and future product milestones; the impact of COVID-19 on long-term objectives; the ability of our solutions to reduce carbon intensity and greenhouse gas emissions, the expected performance and integration of the KARNO generator and system, and the other risks and uncertainties described under the heading “Risk Factors” in our other SEC filings including in our Annual Report (See item 1A. Risk Factors) on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2023 for the year ended December 31, 2022. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Should one or more of the risks or uncertainties described in this press release occur, or should underlying assumptions prove incorrect, actual results and plans could different materially from those expressed in any forward-looking statements. Additional information concerning these and other factors that may impact Hyliion’s operations and projections can be found in its filings with the SEC. Hyliion’s SEC Filings are available publicly on the SEC’s website at www.sec.gov, and readers are urged to carefully review and consider the various disclosures made in such filings.

Hyliion Holdings Corp.
Ryann Malone
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• Raises share buyback guidance to $10 to $20 billion per year
• Expects free cash flow annual growth greater than 10% at $60 Brent
• Updates progress toward targets for lower carbon intensity and new energies growth

NEW YORK--(BUSINESS WIRE)--At its annual investor meeting today, Chevron Corporation (NYSE: CVX) reported on its progress to leverage its strengths to safely deliver lower carbon energy to a growing world.

“Chevron intends to be a leader in both traditional and new energy businesses,” said Mike Wirth, chairman and CEO. “We’re growing energy supply, lowering carbon intensity, and returning more cash to shareholders.” Last month, Chevron increased its dividend per share by 6%, and its Board authorized a new $75 billion share repurchase program.

Higher Returns

Chevron expects to maintain capital and cost discipline to deliver higher returns while growing energy supplies. In line with these objectives, the company announced it is:

• Maintaining its guidance for annual organic capital expenditures of $13 billion to $15 billion through 2027.
• Affirming its oil and gas production guidance of more than 3% annual growth by 2027.
• Extending its 12% return on capital employed target to 2027 at $60 Brent.

High return production growth supports growing shareholder distributions. The company expects annual free cash flow growth greater than 10% at $60 Brent and is raising its share buyback guidance range to $10 to $20 billion per year. In addition, the company will raise its targeted annual share buyback rate to $17.5 billion starting in the second quarter.

“We have the capital discipline and balance sheet strength to offer a differentiated value proposition,” said Pierre Breber, Chevron’s CFO. “We’re winning back investors with consistent and growing cash returned to shareholders across the commodity price cycle.”

Late last year, the company announced a more than 30% increase in its 2023 organic capital expenditure budget relative to 2022 levels.

“Chevron is investing in advantaged assets in the Permian Basin, Gulf of Mexico, Kazakhstan, Australia and elsewhere that we believe drive superior performance,” said Nigel Hearne, executive vice president, Oil, Products, and Gas. “We’re focused on executing with excellence to grow value across our portfolio.”

Lower Carbon

Chevron updated investors on progress toward achieving its target to reduce the carbon intensity of its oil and gas production to 24 kg per barrel of oil equivalent by 2028, in part through execution of carbon abatement projects. Also, the company provided updates on its new energy business lines with the company halfway to its 2030 renewable fuels target and taking steps to build businesses in carbon capture, offsets, and hydrogen.

“We intend to be a leader delivering lower carbon solutions to our customers in hard-to-abate sectors,” said Jeff Gustavson, president of Chevron New Energies. “We believe we have unique capabilities, well-positioned assets and long-standing customer relationships to safely deliver higher returns and lower carbon.”

Webcast

Chevron will conduct a webcast on Tuesday, February 28, 2023, at 8:30 a.m. ET to discuss the company’s strategy at the annual investor meeting.

A webcast of the discussion will be available in listen-only mode to individual investors, media, and other interested parties on Chevron’s website at www.chevron.com under the “Investors” section. Presentations, prepared remarks and a full transcript of the meeting will also be available on the Investor Relations website.

Chevron is one of the world’s leading integrated energy companies. We believe affordable, reliable and ever-cleaner energy is essential to achieving a more prosperous and sustainable world. Chevron produces crude oil and natural gas; manufactures transportation fuels, lubricants, petrochemicals and additives; and develops technologies that enhance our business and the industry. We are focused on lowering the carbon intensity in our operations and growing lower carbon businesses along with our traditional business lines. More information about Chevron is available at www.chevron.com.

NOTICE

As used in this news release, the term “Chevron” and such terms as “the company,” “the corporation,” “our,” “we,” “us” and “its” may refer to Chevron Corporation, one or more of its consolidated subsidiaries, or to all of them taken as a whole. All of these terms are used for convenience only and are not intended as a precise description of any of the separate companies, each of which manages its own affairs.

Please visit Chevron’s website and Investor Relations page at www.chevron.com and www.chevron.com/investors, LinkedIn: www.linkedin.com/company/chevron, Twitter: @Chevron, Facebook: www.facebook.com/chevron, and Instagram: www.instagram.com/chevron, where Chevron often discloses important information about the company, its business, and its results of operations.

CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This news release contains forward-looking statements relating to Chevron’s operations and energy transition plans that are based on management's current expectations, estimates and projections about the petroleum, chemicals and other energy-related industries. Words or phrases such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “advances,” “commits,” “drives,” “aims,” “forecasts,” “projects,” “believes,” “approaches,” “seeks,” “schedules,” “estimates,” “positions,” “pursues,” “may,” “can,” “could,” “should,” “will,” “budgets,” “outlook,” “trends,” “guidance,” “focus,” “on track,” “goals,” “objectives,” “strategies,” “opportunities,” “poised,” “potential,” “ambitions,” “aspires” and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, many of which are beyond the company’s control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this news release. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are: changing crude oil and natural gas prices and demand for the company’s products, and production curtailments due to market conditions; crude oil production quotas or other actions that might be imposed by the Organization of Petroleum Exporting Countries and other producing countries; technological advancements; changes to government policies in the countries in which the company operates; public health crises, such as pandemics (including coronavirus (COVID-19)) and epidemics, and any related government policies and actions; disruptions in the company’s global supply chain, including supply chain constraints and escalation of the cost of goods and services; changing economic, regulatory and political environments in the various countries in which the company operates; general domestic and international economic, market and political conditions, including the military conflict between Russia and Ukraine and the global response to such conflict; changing refining, marketing and chemicals margins; actions of competitors or regulators; timing of exploration expenses; timing of crude oil liftings; the competitiveness of alternate-energy sources or product substitutes; development of large carbon capture and offset markets; the results of operations and financial condition of the company’s suppliers, vendors, partners and equity affiliates, particularly during the COVID-19 pandemic; the inability or failure of the company’s joint-venture partners to fund their share of operations and development activities; the potential failure to achieve expected net production from existing and future crude oil and natural gas development projects; potential delays in the development, construction or start-up of planned projects; the potential disruption or interruption of the company’s operations due to war, accidents, political events, civil unrest, severe weather, cyber threats, terrorist acts, or other natural or human causes beyond the company’s control; the potential liability for remedial actions or assessments under existing or future environmental regulations and litigation; significant operational, investment or product changes undertaken or required by existing or future environmental statutes and regulations, including international agreements and national or regional legislation and regulatory measures to limit or reduce greenhouse gas emissions; the potential liability resulting from pending or future litigation; the company’s future acquisitions or dispositions of assets or shares or the delay or failure of such transactions to close based on required closing conditions; the potential for gains and losses from asset dispositions or impairments; government mandated sales, divestitures, recapitalizations, taxes and tax audits, tariffs, sanctions, changes in fiscal terms or restrictions on scope of company operations; foreign currency movements compared with the U.S. dollar; higher inflation and related impacts; material reductions in corporate liquidity and access to debt markets; the receipt of required Board authorizations to implement capital allocation strategies, including future stock repurchase programs and dividend payments; the effects of changed accounting rules under generally accepted accounting principles promulgated by rule-setting bodies; the company’s ability to identify and mitigate the risks and hazards inherent in operating in the global energy industry; and the factors set forth under the heading “Risk Factors” on pages 20 through 26 of the company’s 2022 Annual Report on Form 10-K and in subsequent filings with the U.S. Securities and Exchange Commission. Other unpredictable or unknown factors not discussed in this news release could also have material adverse effects on forward-looking statements.

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HOUSTON--(BUSINESS WIRE)--#DARPA--Geospace Technologies Corporation (NASDAQ: GEOS) today announced its subsidiary Quantum Technology Sciences, Inc. signed a $1.5 million contract with the Defense Advanced Projects Research Agency (DARPA).

The contract is a Phase II Small Business Innovative Research (SBIR) to explore a new SADAR® capability using littoral seabed deployed passive seismic-acoustic phased arrays for monitoring energy sources of interest on the nearby land, water and air environments.

“Our parent company Geospace has decades of deployment experience with both cabled and nodal seismic systems in a marine environment for energy exploration. Through this project, we will blend the strength of Geospace’s experience in high quality seismic data acquisition in a littoral environment with the unmatched sophistication of Quantum’s seismic data analytics,” said Mark Tinker, CEO of Quantum Technology Sciences.

Historically, the land-water transition zone, which includes shallow littoral waters, the surf zone, and onshore terrestrial environments, is a difficult geographic zone to surveil. Overhead surveillance may provide limited time frames and discrete views of activities and can often be countered by camouflage, concealment, and deception (CCD) techniques. In contrast, surveillance using passive acoustic and seismic technologies such as SADAR® provides persistent monitoring that cannot be countered by CCD techniques and cannot be easily detected. Through this contract effort, improving upon individual unattended ground sensors, phased array networks will collect non-line-of-site signals for vibrational sources allowing separate, simultaneous target identification, classification and tracking in near real-time.

About Quantum Technology Sciences

Quantum designs and sells tactical security and surveillance solutions to safeguard highly valued assets, critical infrastructure, borders and perimeters. Since its inception in 1991, Quantum has provided valuable geophysical sensing technologies to serve various U.S. government missions to include the Department of Defense, Department of Energy, Department of Homeland Security and other agencies. For more information, visit www.QTSI.com.

About Geospace Technologies

Geospace Technologies is a global technology and instrumentation manufacturer specializing in vibration sensing and highly ruggedized products which serve energy, industrial, government and commercial customers worldwide. The Company’s products blend engineering expertise with advanced analytic software to optimize energy exploration, enhance national and homeland security, empower water utility and property managers, and streamline electronic printing solutions. With more than four decades of excellence, the Company’s more than 600 employees across the world are dedicated to engineering and technical quality. Geospace is traded on the U.S. NASDAQ stock exchange as GEOS. For more information, visit www.geospace.com.

Media Contact:
Caroline Kempf
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•  The agreement intends to establish long-term supply chain management services leveraging Trafigura’s worldwide capabilities and access to key resources.
• The Supply Chain Solution is expected to become operational starting in January 2024
• The agreement will increase e.GO’s supply chain reliability and significantly enhance e.GO’s ability to pursue its decentralized growth strategy.

AACHEN, Germany--(BUSINESS WIRE)--Next.e.GO Mobile SE (“e.GO” or the “Company”), an innovative producer of urban electric vehicles, today announced that it has entered into a memorandum of understanding (MOU) with Trafigura Pte. Ltd., a leading international commodity company, to establish a long-term supply chain management service agreement focused on the supply of aluminium and battery metals such as lithium, cobalt, and copper.

e.GO, based in Aachen, Germany, designs and manufactures battery electric vehicles for the urban environment, with a focus on convenience, reliability and affordability. The Company’s proprietary technologies and low capex MicroFactory production facilities have ushered in innovative solutions for producing electric vehicles. The Company is focused on true lifecycle sustainability of urban electro mobility with a view toward material science, production technology, robotics and digitization.

Under the MOU, Trafigura will supply 100% of e.GO’s requirements for transition and battery metals. The MOU also details the approach that will be taken for measuring carbon intensity for each source of metals across the supply chain and providing carbon declaration and transparency through the Agora supply chain emissions platform.

The long-term supply chain management service agreement between the two companies is expected to commence in January 2024 and will run for a minimum of five years, ending in January 2029. In addition, the MOU includes provisions for a supply credit facility.

“This partnership marks an important step forward for us at e.GO, as we work together with one of the leading and most resourceful partners in the industry to meet the increasing demand for electric vehicles and deliver on our mission of steadfast transition to a zero-emission urban mobility,” said Ali Vezvaei, Chairman of the Board at Next.e.GO Mobile SE.

About e.GO

Headquartered in Aachen, Germany, e.GO designs and manufactures battery electric vehicles for the urban environment, with focus on convenience, reliability and affordability. e.GO has developed a disruptive solution for producing its electric vehicles using proprietary technologies and low cost MicroFactories, and has vehicles already on the road today. e.GO is helping cities and their inhabitants improve the way they get around and is making clean and convenient urban mobility a reality. Visit https://www.e-go-mobile.com/ to learn more.

As announced on July 28, 2022, e.GO has entered into a definitive agreement for a business combination with Athena Consumer Acquisition Corp. (NYSE: ACAQ, ACAQ.U, ACAQ WS), a publicly-traded special purpose acquisition company (“SPAC”) that would result in e.GO becoming a publicly listed company. Completion of the proposed transaction is subject to customary closing conditions and is expected to occur in early 2023.

About Trafigura

Trafigura is a leading commodities group based in Switzerland. At the heart of global supply, Trafigura connects vital resources to power and build the world. It deploys infrastructure, market expertise and worldwide logistics network to move oil and petroleum products, metals and minerals, gas and power from where they are produced to where they are needed, forming strong relationships that make supply chains more efficient, secure and sustainable. The Trafigura Group also comprises industrial assets and operating businesses including multi-metals producer Nyrstar, fuel storage and distribution company Puma Energy, and Impala Terminals joint venture. The Group employs over 12,000 people and is active in 156 countries.

Important Information about the Business Combination and Where to Find It

In connection with the proposed business combination (the “Business Combination”) between Athena Consumer Acquisition Corp. (“Athena”) and Next.e.GO Mobile SE (“e.GO”), Next.e.GO B.V., a wholly-owned subsidiary of e.GO (“TopCo”) intends to file with the U.S. Securities and Exchange Commission’s (“SEC”) a registration statement on Form F-4 (the “Registration Statement”), which will include a preliminary prospectus and preliminary proxy statement. This communication is not a substitute for the Registration Statement, the definitive proxy statement/prospectus or any other document that Athena will send to its stockholders in connection with the Business Combination. Investors and security holders of Athena are advised to read, when available, the proxy statement/prospectus in connection with Athena’s solicitation of proxies for its special meeting of stockholders to be held to approve the Business Combination (and related matters) because the proxy statement/prospectus will contain important information about the Business Combination and the parties to the Business Combination. Athena will mail the definitive proxy statement/final prospectus and other relevant documents to its stockholders as of a record date to be established for voting on the Business Combination. Stockholders will also be able to obtain copies of the proxy statement/prospectus, without charge, once available, at the SEC’s website at www.sec.gov or by directing a request to: 442 5th Avenue, New York, NY, 10018.

Participants in the Solicitation

Athena, e.GO, TopCo and their respective directors, executive officers, other members of management, and employees, under SEC rules, may be deemed to be participants in the solicitation of proxies of Athena’s stockholders in connection with the Business Combination. Investors and security holders may obtain more detailed information regarding the names and interests in the Business Combination of Athena’s directors and officers in Athena’s filings with the SEC, and such information and names of e.GO’s directors and executive officers will also be in the Registration Statement to be filed with the SEC by TopCo, which will include the proxy statement of Athena for the Business Combination.

Forward Looking Statements

This communication includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “will,” “expect,” “anticipate,” “believe,” “seek,” “target”, “may”, “intend”, “predict”, “should”, “would”, “predict”, “potential”, “seem”, “future”, “outlook” or other similar expressions (or negative versions of such words or expressions) that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding Athena, e.GO, and TopCo’s expectations with respect to future performance and anticipated financial impacts of the Business Combination, the satisfaction of the closing conditions to the Business Combination, the level of redemptions by Athena’s public stockholders, the timing of the completion of the Business Combination and the use of the cash proceeds therefrom. These statements are based on various assumptions, whether or not identified herein, and on the current expectations of Athena, e.GO, and TopCo’s management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and may differ from assumptions, and such differences may be material. Many actual events and circumstances are beyond the control of Athena, e.GO, and TopCo.

These forward-looking statements are subject to a number of risks and uncertainties, including: (i) changes in domestic and foreign business, market, financial, political and legal conditions; (ii) the inability of the parties to successfully or timely consummate the proposed Business Combination, including the risk that any required regulatory approvals are not obtained, are delayed or are subject to unanticipated conditions that could adversely affect the combined company or the expected benefits of the proposed Business Combination or that the approval of the stockholders of Athena or e.GO is not obtained; (iii) failure to realize the anticipated benefits of the proposed Business Combination; (iv) risks relating to the uncertainty of the projected financial information with respect to e.GO; (v) the outcome of any legal proceedings that may be instituted against Athena and/or e.GO following the announcement of the Business Combination; (vi) future global, regional or local economic and market conditions; (vii) the development, effects and enforcement of laws and regulations; (viii) e.GO’s ability to grow and achieve its business objectives; (ix) the effects of competition on e.GO’s future business; (x) the amount of redemption requests made by Athena’s public stockholders; (xi) the ability of Athena or the combined company to issue equity or equity-linked securities in the future; (xii) the ability of e.GO and Athena to raise interim financing in connection with the Business Combination, including to secure an e.GO IP-backed note; (xiii) the outcome of any potential litigation, government and regulatory proceedings, investigations and inquiries; (xiv) the risk that the proposed Business Combination disrupts current plans and operations as a result of the announcement and consummation, (xv) costs related to the Business Combination, (xvi) the impact of the global COVID-19 pandemic and (xvi) those factors discussed below under the heading “Risk Factors” and in the documents filed, or to be filed, by Athena and Topco with the SEC. Additional risks related to e.GO’s business include, but are not limited to: the market’s willingness to adopt electric vehicles; volatility in demand for vehicles; e.GO’s dependence on the proceeds from the contemplated Business Combination and other external financing to continue its operations; significant challenges as a relatively new entrant in the automotive industry; e.GO’s ability to control capital expenditures and costs; cost increases or disruptions in supply of raw materials, semiconductor chips or other components; breaches in data security; e.GO’s ability to establish, maintain and strengthen its brand; e.GO’s minimal experience in servicing and repairing vehicles; product recalls; failure of joint-venture partners to meet their contractual commitments; unfavorable changes to the regulatory environment; risks and uncertainties arising from the acquisition of e.GO’s predecessor business and assets following the opening of insolvency proceedings over the predecessor’s assets in July 2020; and e.GO’s ability to protect its intellectual property. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements.

There may be additional risks that neither e.GO nor Athena presently know or that e.GO and Athena currently believe are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect e.GO’s and Athena’s expectations, plans or forecasts of future events and views as of the date of this communication. e.GO and Athena anticipate that subsequent events and developments will cause e.GO’s and Athena’s assessments to change. However, while e.GO and Athena may elect to update these forward-looking statements at some point in the future, e.GO and Athena specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing e.GO’s and Athena’s assessments as of any date subsequent to the date of this communication. Accordingly, undue reliance should not be placed upon the forward-looking statements.

No Offer or Solicitation

This communication is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act, or an applicable exemption from the registration requirements thereof.

Next.e.GO Mobile SE
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Expects full year 2022 revenues of $74 to $76 million, a 63% to 68% increase over 2021

Expects full year 2023 revenues of $95-100 million, a 27% to 33% increase over 2022

Plans to report final results on March 30, 2023, with investor call scheduled at 8:30 am

WILLISTON, Vt.--(BUSINESS WIRE)--iSun, Inc. (NASDAQ: ISUN) (the "Company," or "iSun"), a leading solar energy and clean mobility infrastructure company with 50-years of experience accelerating the adoption of innovative electrical technologies, today announced that preliminary revenue for the full year 2022 was approximately $74-76 million, 63%-68% higher than the $45.3 million reported for full year 2021, and at the high end of the revenue range of $70-75 million forecasted in November 2022.

In addition, iSun expects total revenues for full year 2023 to be approximately $95-100 million, a 27%-33% increase over preliminary full year 2022 total revenues, reflecting the increased new business awards the company secured across its business in the second half of 2022 and its progress in working through its backlog.

HIGHLIGHTS:

• Preliminary total revenue for full year 2022 of approximately $74-76 million, 63-68% higher than $45.3 million reported in full year 2021, and at the high end of the range forecasted in November 2022.
• Anticipates approximately $95-100 million in revenue for full year 2023, a 27%-33% increase over preliminary total revenues for full year 2022
• Backlog remains strong at approximately $164 million
• Company plans to announce final results for the fourth quarter and full year 2022 on March 30, 2023.

“We are pleased by the solid progress we demonstrated in the last quarter of 2022, as our team accelerated the awards won, and we began to work through our backlog. With the higher revenue expectations we are sharing for 2023, we are confident that this trend will continue,” said Jeffrey Peck, Chairman and Chief Executive Officer of iSun. “While 2022 was a challenging year industry-wide due to supply chain issues, we believe our success in securing new business awards and our increased productivity and throughput position us well to continue to lead the transition to alternative forms of energy in the markets we serve. Moreover, as additional guidance on the Inflation Reduction Act of 2022 is released, we expect the positive momentum to continue in 2023 and the years ahead.”

Final Fourth Quarter 2022 Results

iSun plans to issue final fourth quarter and full year 2022 results before the market opens on Thursday, March 30, 2023.

A conference call to discuss the results will take place at 8:30 AM ET. To participate in the call, please dial 1-888-506-0062 (domestic) or 1-973-528-0011 (international), using conference ID 568326. The live webcast can be accessed through the Company’s Investor Relations website at investors.isunenergy.com.

A webcast replay of the call will be available at the same location beginning approximately one hour after the call’s completion. A telephonic replay will be available through April 13, 2023, and can be accessed by dialing 1-877-481-4010 (domestic) or 1-919-882-2331 (international), using conference code 47771.

About iSun Inc.

Since 1972, iSun has accelerated the adoption of proven, life-improving innovations in electrification technology. iSun has been the trusted service provider to Fortune 500 companies for decades and has installed clean rooms, fiber optic cables, flight simulators, and over 600 megawatts of solar systems. The Company currently provides a comprehensive suite of solar services across residential, commercial, industrial & municipal, and utility scale projects and provides solar electric vehicle charging solutions for both grid-tied and battery backed solar EV charging systems. iSun believes that the transition to clean, renewable solar energy is the most important investment to make today and is focused on profitable growth opportunities. Please visit www.isunenergy.com for additional information.

Forward Looking Statements

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Words or phrases such as "may," "should," "expects," "could," "intends," "plans," "anticipates," "estimates," "believes," "forecasts," "predicts" or other similar expressions are intended to identify forward-looking statements, which include, without limitation, earnings forecasts, effective tax rate, statements relating to our business strategy and statements of expectations, beliefs, future plans and strategies and anticipated developments concerning our industry, business, operations and financial performance and condition.

The forward-looking statements included in this press release are based on our current expectations, projections, estimates and assumptions. These statements are only predictions, not guarantees. Such forward-looking statements are subject to numerous risks and uncertainties that are difficult to predict. These risks and uncertainties may cause actual results to differ materially from what is forecast in such forward-looking statements, and include, without limitation, the risk factors described from time to time in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K.

All forward-looking statements included in this press release are based on information currently available to us, and we assume no obligation to update any forward-looking statement except as may be required by law.

iSun Investor Relations
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NEW YORK--(BUSINESS WIRE)--New Fortress Energy Inc. (Nasdaq: NFE) (“NFE” or the “Company”) today reported its financial results for the fourth quarter and for the year ended December 31, 2022.

Summary Highlights

• Pleased to report Q4 2022 Adjusted EBITDA⁽¹⁾ of $239 million and ~$1.1 billion for the year ended December 31, 2022
• NFE's net income for three months and year ended December 31, 2022 was $66 million and $185 million, respectively
• Adjusted EPS⁽¹⁾ for Q4 2022 and full year 2022 was $0.87 per share and $2.74 per share, respectively, on a fully diluted basis and $0.30 per share and $0.93 per share for Q4 and full year 2022 when including a non-cash impairment charges
  • Q4 non-cash impairment charges of $119 million resulting from an asset sale⁽²⁾ announced in Q1 2023
  • Excluding impairment charges, full year 2022 net income was more than 500% higher than in 2021
• We achieved our Illustrative Adjusted EBITDA Goal⁽³⁾ of ~$1.1 billion for full year 2022
  • Today we are announcing a 2023 Illustrative Adjusted EBITDA Goal⁽³⁾ of ~$2.0 billion
  • Our 2023 Illustrative Adjusted EBITDA Goal⁽³⁾, if achieved, would result in a near-doubling of Adjusted EBITDA⁽¹⁾ and Adjusted Net Income⁽¹⁾ in 2023 relative to 2022

Business Overview

• Our business remains simple and clear: we seek to match gas demand to gas supply, providing an end-to-end, fully integrated solution to our customers across the globe
• While we have historically purchased (and continue to purchase) LNG supply from third parties, we are progressing our Fast LNG ("FLNG") initiative to supply our terminals and other customers around the world
• We believe these developments will allow us to control our own LNG supply and complete the value chain enabling full vertical integration of our business

Recent Developments

• Genera PR: An independently-managed subsidiary of NFE was awarded a 10-year contract⁽⁴⁾ to manage PREPA's thermal power generation system of approximately 3,600 MW, which is expected to enhance grid reliability and reduce power costs for consumers and businesses
• Hilli & Stock Buyback: We agreed to sell our ownership stake⁽²⁾ in the Hilli in exchange for the return of 4.1 million NFE shares, $100 million in cash, and the extinguishment of $323 million in Hilli-related debt
• Barcarena Terminal: We Completed⁽⁵⁾ the Barcarena terminal and expect First Gas⁽⁶⁾ to Norsk Hydro later this year; separately, Construction⁽⁷⁾ of our 600 MW power plant is underway with Operations⁽⁵⁾ expected to commence in July 2025 pursuant to 25-year PPAs with Brazilian distribution companies
• Liquidity: We further enhanced our liquidity position with the upsizing of our revolving credit facility and letter of credit facility to approximately $750 million and approximately $350 million, respectively
• Dividends: Our Board of Directors approved an update to NFE’s dividend policy⁽⁸⁾ in December 2022 as part of our plan to return significant capital to shareholders while continuing to fund substantial growth; a $3.00/sh dividend was declared in December 2022 and paid in January 2023; an additional $0.10/sh dividend is being declared today with a record date of March 17, 2023 and a payment date of March 28, 2023

Fast LNG

• Construction of our FLNG units is progressing rapidly with the first FLNG unit expected to achieve Mechanical Completion⁽⁹⁾ in the Spring of 2023 and commence Operations⁽⁵⁾ by mid-2023
• As we add liquefaction capacity and corresponding LNG supply to our portfolio, we intend to sign long-term customer offtake agreements that generate strong operating margins and sustainable cash flows

2022 Highlights

• Significant Transactions: We simplified our capital structure and secured more than $2.0 billion of internally generated liquidity to fund⁽¹⁰⁾ our Fast LNG program
  • CELSE: We closed the sale⁽¹¹⁾ of CELSE, the owner of the Sergipe Power Plant and Facility in Brazil, for pre-tax net proceeds to NFE of approximately $550 million
  • Energos Infrastructure: We closed a $2 billion transaction to form a joint venture⁽¹²⁾ with Apollo related to a portfolio of FSRUs, FSUs, and LNG carriers for which NFE holds long-term charters
• Eemshaven: In response to the European energy crisis, the Eems Energy Terminal in The Netherlands commenced Operations⁽⁵⁾ in September 2022 utilizing our FSRU Energos Igloo
• Mexico: We expanded our strategic alliances with Comisión Federal de Electricidad (CFE)⁽¹³⁾ and Petróleos Mexicanos (Pemex)⁽¹⁴⁾ to advance projects in multiple locations in Mexico
  • Altamira: We agreed to create a new FLNG hub off the coast of Altamira, Tamaulipas, with CFE supplying requisite feedgas to NFE FLNG units using CFE’s existing, underutilized pipeline capacity
  • La Paz: Also with CFE, we agreed to sell our 135 MW La Paz power plant for approximately $180 million, and extended and expanded our gas supply agreement with CFE in Baja California Sur
  • Lakach: With Pemex, we agreed to develop and operate an integrated upstream and natural gas liquefaction project off the coast of Veracruz in Southeastern Mexico
• Hydrogen: We continue to progress Development⁽⁷⁾ activities in Zero, our pure-play clean hydrogen business, and have commenced construction on our first plant in Beaumont, an industrial hub in Texas

Financial Highlights

Additional Information

For additional information that management believes to be useful for investors, please refer to the presentation posted on the Investors section of New Fortress Energy’s website, www.newfortressenergy.com, and the Company’s most recent Annual Report on Form 10-K, which is available on the Company’s website. Nothing on our website is included or incorporated by reference herein.

Earnings Conference Call

Management will host a conference call on Tuesday, February 28, 2023 at 8:00 A.M. Eastern Time. The conference call may be accessed by dialing (888) 204-4368 (toll free from within the U.S.) or +1 (323) 994-2093 (from outside of the U.S.) fifteen minutes prior to the scheduled start of the call; please reference “NFE Fourth Quarter 2022 Earnings Call” or conference code 1713563.

A simultaneous webcast of the conference call will be available to the public on a listen-only basis at www.newfortressenergy.com under the Investors section within “Events & Presentations.” Please allow time prior to the call to visit the site and download any necessary software required to listen to the internet broadcast. A replay of the conference call will be available at the same website location shortly after the conclusion of the live call.

About New Fortress Energy Inc.

New Fortress Energy Inc. (NASDAQ: NFE) is a global energy infrastructure company founded to help address energy poverty and accelerate the world’s transition to reliable, affordable, and clean energy. The company owns and operates natural gas and liquefied natural gas (LNG) infrastructure and an integrated fleet of ships and logistics assets to rapidly deliver turnkey energy solutions to global markets. Collectively, the company’s assets and operations reinforce global energy security, enable economic growth, enhance environmental stewardship and transform local industries and communities around the world.

Cautionary Statement Concerning Forward-Looking Statements

This press release contains certain statements and information that may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release other than historical information are forward-looking statements that involve known and unknown risks and relate to future events, our future financial performance or our projected business results. You can identify these forward-looking statements by the use of forward-looking words such as “expects,” “may,” “will,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” or the negative version of those words or other comparable words. Forward looking statements include: illustrative financial metrics and other similar metrics, including goals and expected financial growth; expectations related to our business strategy, including our ability to match supply and demand of our customers, providing an fully integrated solution and completion of the value chain, and control of supply through our Fast LNG portfolio; successful management of PREPA's power generation system, enhancement of grid reliability and reduction of power costs; our ability to close our Hilli transaction and receive funds within the expected timeline and in the amounts anticipated; expectations regarding the construction, completion and commissioning (including First Gas) of our projects on time and within budget; ability to return significant capital to our shareholders; funding of our growth and projects; the successful development and deployment of our Fast LNG liquefaction technology on time and within the expected specifications and design; operation of Fast LNG facilities expectations, including volume production, capacity, sales and reserves of LNG; expectations related to future LNG and energy industries, as well as the development, construction and operation of new facilities; ability to sign long-term customer offtake agreements that generate strong operating margins and sustainable cash flows; the execution of definitive documents and their related terms and conditions, including without limitation the sales price of the La Paz power plant to CFE; successful positioning of our hydrogen business and expectations related to the hydrogen industry in the U.

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(516) 268-7403

$175 Million Credit Facility to Finance Development and Construction of Portfolio of Utility-Scale Solar Projects Across the U.S.

CHAPEL HILL, N.C. and NEW YORK--(BUSINESS WIRE)--Heelstone Renewable Energy, LLC (“Heelstone”) is pleased to announce that in the fourth quarter of 2022 it closed on a $175 million credit facility with BlackRock Alternatives (“BlackRock”), through a fund managed by its Infrastructure Debt business, to fund the initial construction and development of utility-scale solar and battery storage projects. This credit facility provides Heelstone with additional capital to develop and construct its diverse portfolio of solar and battery storage projects of over 11 GW across the U.S. Upon commercial operation of the funded projects, enough electricity will be produced to offset the energy usage of more than 700,000 residential homes.

“We are thrilled to have closed this credit facility with BlackRock, who has been a valuable financing partner and understands our vision and the value creation of investing in renewables. This corporate facility will allow us to continue to grow and provide us with the necessary capital to not only develop our existing pipeline, but to further expand our reach,” said Justin Gravatt, CEO of Heelstone.

“We are pleased to invest on behalf of our clients with Heelstone,” said Jeetu Balchandani, Global Head of Infrastructure Debt at BlackRock. “This renewables transaction is one of the hallmark deals in our flagship Global Infrastructure Debt Fund and demonstrates our ability to provide capital solutions with speed and at scale using a bespoke financing structure.”

Heelstone currently has 248 MWAC under construction in Georgia and Pennsylvania and plans to have another 255 MWAC in PJM under construction by end of 2024.

As one of the world’s largest dedicated infrastructure debt providers, BlackRock’s Infrastructure Debt business seeks to be positioned as a preferred lender for sponsors and borrowers seeking custom fit financing solutions on a direct basis. As of December 31, 2022, BlackRock’s Infrastructure Debt business manages over $20 billion in assets under management and has invested over $15 billion in over 140 projects across 19 countries in 4 continents.

About Heelstone

Heelstone is a leading utility-scale solar developer with expertise in development, construction, and operation. It has extensive knowledge of project finance and a proven track record in bringing utility-scale solar projects to fruition. In June 2019, Heelstone received a controlling investment from an account managed by affiliates of Ares Management as a part of the goal to accelerate the development of utility-scale solar projects across the United States. For more information, visit https://heelstoneenergy.com

About BlackRock Alternatives

BlackRock Alternatives serves investors seeking outperformance in infrastructure, private equity, credit, real estate, hedge funds and multi-alternatives. We strive to bring our investors the highest quality investments by drawing upon our global footprint, superior execution capabilities and position as a preferred partner. BlackRock manages $318 billion in alternative investments and commitments on behalf of clients worldwide as of December 31, 2022.

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HOUSTON--(BUSINESS WIRE)--Vertex Energy, Inc. (NASDAQ:VTNR) (“Vertex” or the “Company”), a leading specialty refiner and marketer of high-quality refined products, today announced its financial results for the fourth quarter and full-year ended December 31, 2022.

The company will host a conference call to discuss 4Q22 results today at 8:00 A.M. Eastern Time, details are included at the end of this release.

FOURTH QUARTER 2022 HIGHLIGHTS

• Reported net income of $44.4 million, or $0.56 per basic share
• Reported Adjusted EBITDA of $75.2 million
• Continued safe operation of Mobile refinery with fourth quarter 2022 operational results exceeding with prior guidance for throughput, and capture rate at 77,964 bpd and 61%, respectively
• Renewable diesel conversion project continues to track on schedule for mechanical completion in late March 2023 and start-up in April 2023
• Total liquidity including restricted cash of $146.2 million as of December 31, 2022

FULL YEAR 2022 HIGHLIGHTS

• Reported net income of $1.9 million (which includes a $2.5 million tax benefit) or $0.03 per basic share
• Reported Adjusted EBITDA of $161 million
• Successfully closed on strategic acquisition and associated financing of Mobile, AL refining facility for $75 million
• Exhibited significant operational reliability at Mobile facility with 9-month throughput volumes of 72,555 bpd (97% capacity utilization)
• Initiated construction of renewable diesel conversion project at Mobile refining facility
  • Tracking on schedule for mechanical completion in March 2023 and initial production of 8,000 bpd in April 2023
  • Installation of additional hydrogen supply to drive production ramp to 14,000 bpd by early 2024

Vertex reported fourth quarter 2022 net income of $44.4 million, or $0.56 per fully diluted share, versus a net loss of $8.3 million, or $0.15 per fully diluted share for the fourth quarter 2021. Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) was $75.2 million for the fourth quarter 2022 compared to Adjusted EBITDA of $9.5 million in the prior-year period and $1.6 million in the prior quarter. Financial results for the fourth quarter 2022 include a $9.6 million financing charge related to inventory backwardation and a $2.5 million released valuation allowance which is reflected as an income tax benefit as a result of the taxable gain generated by the Heartland divestiture subsequent to the quarter end. Schedules reconciling the Company’s GAAP and non-GAAP financial results, including Adjusted Net Income and Adjusted EBITDA are included later in this release (see also “Non-GAAP Financial Measures”, below).

Management Commentary

“During the fourth quarter, we delivered as promised on our goals of truly demonstrating the significant earnings potential of our Mobile facility.” stated Benjamin P. Cowart, President and CEO of Vertex, who continued, “Our fourth quarter financial results reflect the continued safe, smooth operations at the facility, attractive product yields following the maintenance operations completed in the prior period and the continuation of near record refining margins during the quarter. We remain on track to begin the production of renewable diesel in the second quarter of this year while continuing to benefit from an extremely attractive macro environment facing the conventional fuels business for the foreseeable future. We believe the Company is well positioned to execute on both our strategic goals in the renewable fuels business, as well as our financial goals of streamlining our balance sheet and capital structure in 2023.”

Operating Details and Discussion

Mobile Refinery Operations

The Mobile refinery operations generated $147.1 million of fuels gross margin or $20.50 per barrel during the fourth quarter 2022, its third quarter of operations since being acquired by Vertex. The Mobile refinery financial results include the impact of an inventory backwardation charge in the amount of $9.6 million. Adjusting for the impact of $3.96 of RIN obligations per barrel, refining gross margin at Mobile was $118.7 million, or $16.54 per barrel.

Total throughput at the Mobile refinery was 77,964 barrels per day in the fourth quarter, resulting in 104% utilization for the stated operable capacity of approximately 75,000 barrels per day. Total production of finished high-value light products, such as gasoline, diesel and jet fuel, represented approximately 74% of the total production in the fourth quarter, vs 69% in 3Q22.

The benchmark 2-1-1 Gulf Coast crack spread was $33.84 in the fourth quarter 2022, an increase of 134% versus the fourth quarter 2021, supported by reduced inventories for refined fuels, a constrained global refining complex and continued strength in demand for conventional refined products. On a gross margin per barrel basis, excluding non-fuel costs, the Mobile refinery captured $20.50 per barrel or 61% of the Gulf Coast 2-1-1 crack spread, exceeding prior expectations on higher than expected diesel and jet fuel margins. Adjusting for the per barrel RIN obligation, RIN-adjusted gross profit per barrel was $16.54 or 49% of the Gulf Coast 2-1-1 crack spread.

The following table presents the summary financial and operating results from the Mobile Refinery:

Black Oil & Recovery Segment

The legacy Black Oil and Recovery segment generated gross profit of $9.6 million for the fourth quarter 2022. Operating income was $3.4 million in quarter. The prior year period is not comparable due to the reclassification of our segment operating and financial data, which has been consolidated into two primary reportable segments, Black Oil and Recovery and Refining and Marketing, for financial reporting purposes.

During the 2022 fourth quarter, the Company’s legacy Marrero (Louisiana) and Columbus (Ohio) refineries operated at 106% and 89% of total utilization, respectively.

Renewable Diesel Conversion Project Timeline & Construction Update

Renewable diesel conversion project continues on estimated timeline and budget. Vertex’s previously disclosed capital project designed to modify the Mobile, Alabama refinery’s hydrocracking unit to produce renewable diesel fuel on a standalone basis continues to progress along the Company’s planned construction timeline towards mechanical completion in late March 2023, with initial renewable diesel production volumes expected in April 2023. The company took down the hydrocracking unit as planned on January 6^th 2023, with approximately 55% of shut-down related work now completed. The company continues to expect the project to reach mechanical completion in late 1Q23. Expected total capital costs for the project are estimated to be approximately $110-$115 million, with approximately $33.2 million or 75% of the company’s total $42.2 million capital expenditure budget for the fourth quarter spent on the project. Recent construction progress milestones as of February 28, 2023 include:

• Over 290,000 work hours completed without reportable safety incident
• Hydrocracker outage related work execution is >55% complete
• ISBL equipment nearing completion – catalyst loading to begin in the next week
• Mechanical completion remains on track for late March 2023
• Detailed system handover and commissioning plan in place

Balance Sheet and Liquidity Update

As of December 31, 2022, Vertex had total long-term debt outstanding of $360.3 million, including long term debt $260.2 million and lease obligations of $100.1 million. The Company had total cash and equivalents of $146.2 million including $4.9 million of restricted cash on the balance sheet as of December 31, 2022, for a net debt position of $214.1 million. The ratio of net debt to trailing twelve month Adjusted EBITDA was 1.3x as of December 31, 2022.

Management Outlook

Based on current data and projected trends, Company management believes that several ongoing factors will continue to support a robust refined product margin environment for the US refining complex in the near to medium term. Primary market drivers include continued strength in global refined product demand, reduced capacity in global refining throughput and below average levels of domestic inventories of refined products including gasoline, and distillate. As a result, management’s expectations for a historically elevated margin environment continue through the first quarter of 2023 and into the second quarter of 2023.

All guidance presented below is current as of the time of this release and is subject to change. All prior financial guidance should no longer be relied upon.

First Quarter 2023 Financial and Operating Outlook:

Commodity Derivative Position and Price Risk Management Strategy

Vertex may, at times, utilize derivative instruments to manage exposure to fluctuations in various commodity prices, including refined fuel products sold, natural gas used in the refining process, as well as feedstocks and refined products held in inventory. Management sets and implements hedging policies in order to improve visibility on cost inputs, sales prices, and resulting cash flow generation for the purpose of planning and budgeting of the business.

The company currently has no substantial outstanding commodity derivative hedge positions as of February 28, 2022, and as such, continues to remain exposed to prevailing market prices and conditions for the purchase and sale of all feedstocks and refined products.

Conference Call and Webcast Details

A conference call will be held today at 8:00 A.M. Eastern Time to review the Company’s financial results, discuss recent events and conduct a question-and-answer session. An audio webcast of the conference call and accompanying presentation materials will also be available in the “Events and Presentation” section of Vertex’s website at www.vertexenergy.com. To listen to a live broadcast, visit the site at least 15 minutes prior to the scheduled start time in order to register, download, and install any necessary audio software.

To participate in the live teleconference:

Domestic: 1-877-300-8521
International: 1-412-317-6026

Conference ID: 10174530

To listen to a replay of the teleconference, which will be available through Tuesday, March 14, 2023 at 11:59 PM ET, either go to the Events and Presentation section of Vertex’s website at www.vertexenergy.com or call the number below:

Domestic Replay: 1-844-512-2921
Access Code: 10174530

ABOUT VERTEX ENERGY

Houston-based Vertex Energy, Inc. (NASDAQ: VTNR), is an energy transition company focused on the production and distribution of conventional and alternative fuels. Vertex owns a refinery in Mobile (AL) with an operable refining capacity of 75,000 barrels per day and more than 3.2 million barrels of product storage, positioning it as a leading supplier of fuels in the region. Vertex is also one of the largest processors of used motor oil and co-products in the U.S. Gulf Coast. Vertex also owns a facility, Myrtle Grove, located on a 41-acre industrial complex, with hydroprocessing and plant infrastructure along the Gulf Coast in Belle Chasse, LA, that presents high yield, low CAPEX opportunity for future Energy Transition projects.

FORWARD-LOOKING STATEMENTS

Certain of the matters discussed in this communication which are not statements of historical fact constitute forward-looking statements within the meaning of the securities laws, including the Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties. Words such as “strategy,” “expects,” “continues,” “plans,” “anticipates,” “believes,” “would,” “will,” “estimates,” “intends,” “projects,” “goals,” “targets” and other words of similar meaning are intended to identify forward-looking statements but are not the exclusive means of identifying these statements. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. The important factors that may cause actual results and outcomes to differ materially from those contained in such forward-looking statements include, without limitation, the Company’s projected Outlook for the first quarter of 2023, as discussed above; the Company’s ability to raise sufficient capital to complete future capital projects and the terms of such funding, to the extent necessary; the timing of planned capital projects at the Mobile Refinery and the outcome thereof; the future production of the Mobile Refinery; the estimated timeline of the renewable diesel capital project, estimated and actual production associated therewith, estimated revenues over the course of the agreement with Idemitsu, anticipated and unforeseen events which could reduce future production at the refinery or delay planned capital projects, changes in commodity and credits values, and certain early termination rights associated with the Idemitsu agreement and conditions precedent to such agreement; certain mandatory redemption provisions of the outstanding senior convertible notes, the conversion rights associated therewith, and dilution caused by such conversions; the Company’s ability to comply with required covenants under outstanding senior notes and a term loan and pay amounts due under such senior notes and term loan, including interest and other amounts due thereunder; the ability of the Company to retain and hire key personnel; risks associated with the ability of Vertex to complete current plans for expansion and growth, and planned capital projects; the level of competition in our industry and our ability to compete; our ability to respond to changes in our industry; the loss of key personnel or failure to attract, integrate and retain additional personnel; our ability to protect our intellectual property and not infringe on others’ intellectual property; our ability to scale our business; our ability to maintain supplier relationships and obtain adequate supplies of feedstocks; our ability to obtain and retain customers; our ability to produce our products at competitive rates; our ability to execute our business strategy in a very competitive environment; trends in, and the market for, the price of oil and gas and alternative energy sources; the impact of inflation on margins and costs; the volatile nature of the prices for oil and gas caused by supply and demand, including volatility caused by the ongoing Ukraine/Russia conflict; our ability to maintain our relationships with our partners; the impact of competitive services and products; the outcome of pending and potential future litigation, judgments and settlements; rules and regulations making our operations more costly or restrictive; changes in environmental and other laws and regulations and risks associated with such laws and regulations; economic downturns both in the United States and globally, increases in inflation and interest rates, increased costs of borrowing associated therewith and potential declines in the availability of such funding; risk of increased regulation of our operations and products; disruptions in the infrastructure that we and our partners rely on; interruptions at our facilities; unexpected and expected changes in our anticipated capital expenditures resulting from unforeseen or planned required maintenance, repairs, or upgrades; our ability to acquire and construct new facilities; our ability to effectively manage our growth; decreases in global demand for, and the price of, oil, due to COVID-19, state, federal and foreign responses thereto, inflation, recessions or other reasons, including declines in economic activity or global conflicts; our ability to acquire sufficient amounts of used oil feedstock through our collection routes, to produce finished products, and in the absence of such internally collected feedstocks, and our ability to acquire fourth-party feedstocks on commercially reasonable terms; unexpected downtime at our facilities; risks associated with COVID-19, the global efforts to stop the spread of COVID-19, potential downturns in the U.S. and global economies due to COVID-19 and the efforts to stop the spread of the virus, and COVID-19 in general; anti-dilutive rights associated with our outstanding securities; our level of indebtedness, which could affect our ability to fulfill our obligations, impede the implementation of our strategy, and expose us to interest rate risk; dependence on fourth party transportation services and pipelines; risks related to obtaining required crude oil supplies, and the costs of such supplies; counterparty credit and performance risk; unanticipated problems at, or downtime effecting, our facilities and those operated by fourth parties; risks relating to our hedging activities; and risks relating to planned divestitures and acquisitions. Other important factors that may cause actual results and outcomes to differ materially from those contained in the forward-looking statements included in this communication are described in the Company’s publicly filed reports, including, but not limited to, the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, and the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 and future Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. These reports are available at www.sec.gov. The Company cautions that the foregoing list of important factors is not complete. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on behalf of the Company are expressly qualified in their entirety by the cautionary statements referenced above. Other unknown or unpredictable factors also could have material adverse effects on Vertex’s future results. The forward-looking statements included in this press release are made only as of the date hereof. Vertex cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, Vertex undertakes no obligation to update these statements after the date of this release, except as required by law, and takes no obligation to update or correct information prepared by fourth parties that are not paid for by Vertex. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

PROJECTIONS

The financial projections (the “Projections”) included herein were prepared by Vertex in good faith using assumptions believed to be reasonable. A significant number of assumptions about the operations of the business of Vertex were based, in part, on economic, competitive, and general business conditions prevailing at the time the Projections were developed. Any future changes in these conditions, may materially impact the ability of Vertex to achieve the financial results set forth in the Projections. The Projections are based on numerous assumptions, including realization of the operating strategy of Vertex; industry performance; no material adverse changes in applicable legislation or regulations, or the administration thereof, or generally accepted accounting principles; general business and economic conditions; competition; retention of key management and other key employees; absence of material contingent or unliquidated litigation, indemnity, or other claims; minimal changes in current pricing; static material and equipment pricing; no significant increases in interest rates or inflation; and other matters, many of which will be beyond the control of Vertex, and some or all of which may not materialize. The Projections also assume the continued uptime of the Company’s facilities at historical levels and the successful funding of, timely completion of, and successful outcome of, planned capital projects. Additionally, to the extent that the assumptions inherent in the Projections are based upon future business decisions and objectives, they are subject to change. Although the Projections are presented with numerical specificity and are based on reasonable expectations developed by Vertex’s management, the assumptions and estimates underlying the Projections are subject to significant business, economic, and competitive uncertainties and contingencies, many of which will be beyond the control of Vertex. Accordingly, the Projections are only estimates and are necessarily speculative in nature. It is expected that some or all of the assumptions in the Projections will not be realized and that actual results will vary from the Projections. Such variations may be material and may increase over time. In light of the foregoing, readers are cautioned not to place undue reliance on the Projections. The projected financial information contained herein should not be regarded as a representation or warranty by Vertex, its management, advisors, or any other person that the Projections can or will be achieved. Vertex cautions that the Projections are speculative in nature and based upon subjective decisions and assumptions. As a result, the Projections should not be relied on as necessarily predictive of actual future events.

NON-GAAP FINANCIAL MEASURES

In addition to our results calculated under generally accepted accounting principles in the United States ("GAAP"), in this earnings release we also present Refining Gross Margin, EBITDA and Adjusted EBITDA. Refining Gross Margin, EBITDA and Adjusted EBITDA are “non-GAAP financial measures” presented as supplemental measures of the Company’s performance. They are not presented in accordance with GAAP. Refining gross margin is defined as revenues less the cost of fuel intakes and other fuel costs. It excludes operating expense and depreciation attributable to cost of revenues and other non-operating items in cost of revenues. EBITDA represents net income before interest, taxes, depreciation and amortization, for continued and discontinued operations. Adjusted EBITDA is defined as EBITDA before other income, impairment loss on assets, unrealized (gain)/loss on hedging activities, (gain)/loss on hedge roll (backwardation), environmental clean-up reserve, loss (gain) on change in value of derivative warrant liability, unrealized (gain) loss on derivative instruments, gain (loss) on intermediation agreement, Shell transaction related and acquisition expenses and stock-based compensation expense (for continued and discontinued operations) and other unusual or non-recurring items.

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HOUSTON--(BUSINESS WIRE)--PACIFIC COAST OIL TRUST (OTC–ROYTL) (the “Trust”), a royalty trust formed by Pacific Coast Energy Company LP (“PCEC”), announced today that there will be no cash distribution to the holders of its units of beneficial interest of record on February 28, 2023 based on the Trust’s calculation of net profits generated during December 2022 (the “Current Month”) as provided in the conveyance of net profits interests and overriding royalty interest (the “Conveyance”). Given the Trust’s receipt of insufficient monthly income from its net profits interests and overriding royalty interest during 2020 and 2021, the Trust had been expected to terminate by its terms at the end of 2021; however, as described further below, a court had issued a temporary restraining order enjoining the dissolution of the Trust until an arbitration tribunal could rule on the plaintiff’s request for injunctive relief. As described further below, based on information from PCEC, the likelihood of distributions to the unitholders in the foreseeable future is extremely remote. All financial and operational information in this press release has been provided to the Trustee by PCEC.

The Current Month’s distribution calculation for the Developed Properties resulted in operating income of approximately $1.8 million. Revenues from the Developed Properties were approximately $7.7 million, lease operating expenses including property taxes were approximately $5.7 million, and development costs were approximately $222,000. The higher lease operating expenses reflected in the Current Month were mainly due to the additional expenses from the East Coyote and Sawtelle fields included in the Current Month’s calculations (see “Update on East Coyote and Sawtelle Fields” below), as well as additional compliance costs related to greenhouse gas emissions requirements. The average realized price for the Developed Properties was $81.93 per Boe for the Current Month, as compared to $86.73 per Boe in November 2022. Oil prices in recent months generally have remained elevated well above their 2020 and 2021 levels and were higher in the Current Month as compared to December 2021. The cumulative net profits deficit amount for the Developed Properties decreased approximately $1.4 million, to approximately $4.2 million in the Current Month versus approximately $5.6 million in the prior month.

As revenues from the Remaining Properties during the month of August 2022 were sufficient to repay the remaining cumulative net profits deficit for the Remaining Properties, the Trust received income from the 25% net profits interest instead of income from the 7.5% overriding royalty interest, as provided under the Conveyance. Revenues from the Remaining Properties were $1.4 million and lease operating expenses including property taxes were approximately $887,000. Average realized prices for the Remaining Properties were $73.09 per Boe in December, as compared to $84.30 per Boe in November. Income from the net profits interest for the Remaining Properties for the month of December was approximately $116,000.

The monthly operating and services fee of approximately $100,000 payable to PCEC, together with Trust general and administrative expenses of approximately $125,000 and the payment of approximately $15,000 of accrued interest under the promissory note between the Trust and PCEC, together exceeded the payment of approximately $116,000 received from PCEC from the 25% net profits interest on the Remaining Properties, creating a shortfall of approximately $125,000.

PCEC has provided the Trust with a $1 million letter of credit to be used by the Trust if its cash on hand (including available cash reserves) is not sufficient to pay ordinary course administrative expenses as they become due. As of March 31, 2021, the letter of credit has been fully drawn down. Further, the trust agreement provides that if the Trust requires more than the $1 million under the letter of credit to pay administrative expenses, PCEC will, upon written request of the Trustee, loan funds to the Trust in such amount as necessary to pay such expenses. Under the trust agreement, the Trust may only use funds provided under the letter of credit or loaned by PCEC or another source to pay the Trust’s current accounts or other obligations to trade creditors in connection with obtaining goods or services or for the payment of other accrued current liabilities arising in the ordinary course of the Trust’s business. As the Trust has fully drawn down the letter of credit, PCEC will be loaning funds to the Trust to pay the expected shortfall of approximately $125,000, which would bring the total amount of outstanding borrowings (including the amount drawn from the letter of credit, which also must be repaid as provided in the trust agreement) from PCEC to approximately $3.9 million plus interest thereon, related to shortfalls from prior months. Consequently, no further distributions may be made to Trust unitholders until the Trust’s indebtedness created by such amounts drawn or borrowed, including interest thereon, has been paid in full.

Sales Volumes and Prices

The following table displays PCEC’s underlying sales volumes and average prices for the Current Month:

Update on East Coyote and Sawtelle Fields

As previously disclosed, WG Holdings SPV, LLC (“WG Holdings”), the operator of the East Coyote and Sawtelle fields, had not made any payments to PCEC for production from such fields since April 30, 2021, despite repeated requests. Because PCEC accrues for estimated future net income to be received from WG Holdings, PCEC previously passed through the Trust’s share of approximately $1 million in net income from these fields, which was approximately $830,000 net to the Trust, in the relevant monthly net profits interest calculations. Due to WG Holdings’ withholding of these past-due payments, PCEC reversed the cash flows attributable to these properties for the net profits interest calculation month of February 2022, pending the resolution of the payment issue with WG Holdings. PCEC has informed the Trustee that it has received payment from WG Holdings. As a result, the net profits interest calculation for the Current Month reflects an upward adjustment of approximately $1.1 million, net of operating expenses. Of the $1.1 million received, approximately $1.0 million was attributable to the Developed Properties and approximately $58,000 was attributable to the Remaining Properties.

Update on Estimated Asset Retirement Obligations

As previously disclosed, in November 2019, PCEC informed the Trustee that, as permitted by the Conveyance, PCEC intended to begin deducting its estimated asset retirement obligations (“ARO”) associated with the West Pico, Orcutt Hill, Orcutt Hill Diatomite, East Coyote and Sawtelle fields, thereby reducing the amounts payable to the Trust under its Net Profits Interests. ARO is the recognition related to net present value of future plugging and abandonment costs that all oil and gas operators face. PCEC engaged an accounting firm, Moss Adams LLP (“Moss Adams”), acting as third-party consultants, to assist PCEC in determining its estimated ARO, and on February 27, 2020, PCEC informed the Trustee that based on the analysis performed by Moss Adams, PCEC’s estimated ARO, as of December 31, 2019, was $45,695,643, which is approximately $10.0 million less than the undiscounted amount that was originally estimated before Moss Adams completed its analysis, as previously disclosed in the Trust’s Current Report on Form 8‑K filed on November 13, 2019. According to PCEC and its third-party consultants, its estimated ARO, which reflected PCEC’s assessment of current market conditions as of December 31, 2019 and changes in California law, was determined to be approximately $33.2 million for the Developed Properties and approximately $12.5 million for the Remaining Properties, or approximately $26.5 million and approximately $3.1 million net to the Trust, respectively, and PCEC has reflected these amounts beginning with the calculation of the net profits generated during January 2020. The accrual has resulted in a current cumulative net profits deficit of approximately $6.7 million, which must be recouped from proceeds otherwise payable to the Trust from the Trust’s Net Profits Interests. Therefore, until the net profits deficit for the Remaining Properties was eliminated in August 2022, the only cash proceeds the Trust had received since March 2020 were pursuant to the 7.5% overriding royalty interest. With the repayment of the remaining cumulative net profits deficit for the Remaining Properties in August 2022, the current cumulative net profits deficit relates only to the Developed Properties and will be repaid from proceeds otherwise payable to the Trust from the Trust’s 80% net profits interest.

PCEC has informed the Trustee that in accordance with generally accepted accounting principles, PCEC will evaluate the ARO on a quarterly basis. As a result of that re-evaluation, the actual ARO incurred in the future may be greater or less than the estimated amounts provided by PCEC. As previously disclosed, PCEC has informed the Trustee that at year-end 2020, and following the end of each of the first, second and third quarters of 2021, in light of the accounting guidance under Accounting Standards Codification 410-20-35-3, which requires the recognition of changes in the asset retirement obligation due to the passage of time and revision of the timing or amount of the originally estimated undiscounted cash flows, PCEC re-evaluated the estimated ARO, which resulted in an aggregate increase to the ARO accrual for the Developed Properties by approximately $5.1 million, net to the Trust’s interest, and an aggregate increase to the ARO accrual for the Remaining Properties by approximately $288,000, net to the Trust’s interest. PCEC has informed the Trustee that the audit of PCEC’s financial statements for the year ended December 31, 2021 has not yet been completed, and that when the audit is completed, PCEC expects to recognize further revisions to the ARO accrual for the Developed Properties, but at this time cannot estimate the amount or direction of any such revisions.

Based on PCEC’s estimate of its ARO attributable to the Net Profits Interest, deductions relating to estimated ARO are likely to eliminate the likelihood of any distributions to Trust unitholders for the foreseeable future, as previously disclosed in the Trust’s Current Report on Form 8-K filed on November 13, 2019.

As previously disclosed, the Trust engaged Martindale Consultants, Inc. (“Martindale”), a provider of analysis and compliance review services to the oil and gas industry, to perform an independent review of the estimated ARO in the Moss Adams report that PCEC provided to the Trustee. The Trustee also has engaged an accounting expert to advise the Trustee regarding the accruals that PCEC has booked relating to its estimated ARO. As disclosed in the Trust’s Current Report on Form 8-K filed on December 29, 2020, Martindale has completed its review of the estimated ARO and on December 21, 2020 provided its analysis and recommendations to the Trustee. Based on Martindale’s recommendations provided in its report to the Trust, as disclosed in the Trust’s Current Report on Form 8-K filed on December 29, 2020, the Trustee requested that PCEC promptly make several adjustments to its calculations and methods of deducting ARO from the proceeds to which the Trust is otherwise entitled pursuant to its Net Profits Interests. PCEC has responded to the Trustee, indicating PCEC’s view that the adjustments would violate applicable contracts and accounting standards, and has therefore declined to make any adjustments to the estimated ARO calculation based on those requests and the recommendations of the Martindale report. The Trustee has concluded that it has taken all action reasonably available to it under the Trust’s governing documents in connection with PCEC’s ARO calculation and therefore has determined not to take further action at this time.

As described in more detail in the Trust’s filings with the SEC, the trust agreement provides that the Trust will terminate if the annual cash proceeds received by the Trust from the Net Profits Interests and 7.5% overriding royalty interest total less than $2.0 million for each of any two consecutive calendar years. Because of the cumulative net profits deficit—which PCEC contends is the result of the substantial reduction in commodity prices during 2020 due to the COVID-19 pandemic and PCEC’s deduction of estimated ARO beginning in the first quarter of 2020—the only cash proceeds the Trust had received from March 2020 until the elimination of the net profits deficit for the Remaining Properties as discussed above had been attributable to the 7.5% overriding royalty interest. As a result, the total proceeds received by the Trust in each of 2020 and 2021 were less than $2.0 million. Therefore, the Trust had been expected to terminate by its terms at the end of 2021.

Status of the Dissolution of the Trust

As previously disclosed in the Trust’s Current Report on Form 8-K filed on December 23, 2021, on December 8, 2021, Evergreen Capital Management LLC (“Evergreen”) filed an Amended Class Action and Shareholder Derivative Complaint alleging a derivative action on behalf of the Trust and against PCEC in the Superior Court of the State of California for the County of Los Angeles (the “Court”).

On December 10, 2021, Evergreen filed a motion for temporary restraining order and for preliminary injunction, seeking to (1) enjoin the Trustee from dissolving the Trust, (2) enjoin PCEC from dissolving the Trust, (3) direct PCEC to account for all monies withheld from the Trust on the basis of ARO costs since September 2019, and (4) direct PCEC to place such monies in escrow. On December 16, 2021, the Court granted Evergreen’s application for a temporary restraining order only to the extent of enjoining the dissolution of the Trust. Accordingly, the Trust did not dissolve at the end of 2021 and commence the process of selling its assets and winding up its affairs.

On January 11, 2022, PCEC and Evergreen filed an agreed stipulation to stay the prosecution of Evergreen’s derivative claims pending an arbitration of such claims. On January 13, 2022, the Court signed an Order dissolving the December 16, 2021, temporary restraining order and entering a new temporary restraining order to preserve the status quo until a tribunal of three arbitrators appointed pursuant to the trust agreement could rule on any request by Evergreen for injunctive relief. On April 11, 2022, PCEC notified the Court, at the arbitrators’ request, that the arbitration panel had issued an order on April 7, 2022, denying Evergreen’s request for injunctive relief. On April 13, 2022, Evergreen notified the Court that Evergreen had filed a motion for reconsideration with the arbitration panel that same day, which was denied on May 26, 2022. On August 30, 2022, the arbitration Panel issued a Partial Final Award dismissing with prejudice Evergreen’s derivative claims against PCEC, including Evergreen’s application for an injunction. On December 5, 2023, the California Superior Court confirmed that Partial Final Award.

On June 20, 2022, Evergreen filed an amended pleading in the arbitration, adding the Trustee as a party to that proceeding. In early September 2022, Evergreen informed the Trustee that it was going to seek a preliminary injunction while its claims against the Trustee were pending. At the request of the arbitration panel, the Trustee agreed to take no steps toward the sale of the Trust corpus until the Panel decided Evergreen’s application for a preliminary injunction. On September 12, 2022, the Trustee filed a motion to dismiss Evergreen’s claims against the Trustee. On September 22, 2022, Evergreen filed an opposition to the Trustee’s motion to dismiss. On September 15, 2022, Evergreen filed a motion to enjoin the Trustee from selling the Trust assets or dissolving the Trust during the pendency of the arbitration. The Trustee and PCEC filed oppositions to Evergreen’s motion on September 22, 2022. Both motions were heard by the Panel on October 24, 2022. On October 31, 2022, the Panel granted the Trustee’s motion and dismissed Evergreen’s claims against the Trustee with prejudice, which mooted Evergreen’s request for injunctive relief.

As a result, the Trustee plans to move forward with the winding up of the Trust in accordance with the provisions of the Trust Agreement, which will include selling all of the Trust’s assets and distributing the net proceeds of the sale to the Trust unitholders after payment, or reasonable provision for payment, of all Trust liabilities, including the establishment of cash reserves in such amounts as the Trustee in its discretion deems appropriate for the purpose of making reasonable provision for all claims and obligations of the Trust, including any contingent, conditional or unmatured claims and obligations, in accordance with the Delaware Statutory Trust Act. The Trustee is also working with PCEC and the independent auditor of the Trust to become current in the Trust’s periodic reporting obligations under the Securities Exchange Act of 1934.

Production Update

PCEC has informed the Trustee that PCEC continues to strategically deploy capital to enhance and maintain production. Costs associated with returning wells to service must be recovered before cash flow to the Trust can be created. Although oil prices have improved significantly from their lowest levels in 2020, any monthly payments, as a result of enhanced production, that PCEC may make to the Trust may not be sufficient to cover the Trust’s administrative expenses and outstanding debt to PCEC, and therefore the likelihood of distributions to the unitholders in the foreseeable future is extremely remote.

Cancellation of Connection Agreement with Phillips 66

PCEC has informed the Trustee that on September 22, 2022, PCEC received notice from Phillips 66 of the cancellation of the Connection Agreement between PCEC and Phillips 66 with respect to the three leases located south of Orcutt in Santa Barbara, California, effective upon completion of PCEC’s deliveries in December 2022. As a result of the cancellation, PCEC will no longer have a pipeline interconnection between the Orcutt properties and the Santa Maria Refinery, which Phillips 66 is expected to shut down in early 2023. Currently this pipeline is the sole means by which PCEC transports its crude oil from the Orcutt properties, which relates to approximately 86% and 91% of the production attributable to the Trust’s interests in 2021 and to date in 2022, respectively.

The shutdown of the refinery and the pipeline will adversely affect PCEC’s financial performance, and the revenues that may be payable to the Trust, if PCEC is unable to secure alternative means of transporting oil from the Orcutt properties to market. PCEC has informed the Trustee that it has been able to secure a short-term contract to transport oil from the Orcutt properties commencing on January 4, 2023, albeit at reduced volumes and with a higher differential compared to the terms previously achievable through the Phillips 66 Connection Agreement. PCEC has indicated to the Trustee that it continues to explore options to secure long-term transportation of oil from the Orcutt properties by other means.

Overview of Trust Structure

Pacific Coast Oil Trust is a Delaware statutory trust formed by PCEC to own interests in certain oil and gas properties in the Santa Maria Basin and the Los Angeles Basin in California (the “Underlying Properties”). The Underlying Properties and the Trust’s net profits, and royalty interests are described in the Trust’s filings with the SEC. As described in the Trust’s filings with the SEC, the amount of any periodic distributions is expected to fluctuate, depending on the proceeds received by the Trust as a result of actual production volumes, oil and gas prices, development expenses, and the amount and timing of the Trust’s administrative expenses, among other factors. For additional information on the Trust, please visit https://royt.q4web.com/home/default.aspx.

Cautionary Statement Regarding Forward-Looking Information

This press release contains statements that are "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this press release, other than statements of historical facts, are "forward-looking statements" for purposes of these provisions. These forward-looking statements include estimates of future asset retirement obligations, expectations regarding the impact of deductions for such obligations on future distributions to unitholders, estimates of future total distributions to unitholders, expectations regarding the outcome of the legal proceedings relating to the Trust and any future dissolution of the Trust, statements regarding the impact of returning shut-in wells to production, expectations regarding the cancellation of the Connection Agreement between Phillips 66 and PCEC and the shutdown of the Santa Maria refinery, and the impact of such cancellation and shutdown on PCEC’s financial condition and future payments to the Trust, expectations regarding PCEC’s ability to loan funds to the Trust, statements regarding the expected winding down of the Trust, and the amount and date of any anticipated distribution to unitholders. In any case, PCEC’s deductions of its estimated asset retirement obligations will have a material adverse effect on distributions to the unitholders and on the trading price of the Trust units and may result in the termination of the Trust. Any anticipated distribution is based, in part, on the amount of cash received or expected to be received by the Trust from PCEC with respect to the relevant period. Any differences in actual cash receipts by the Trust could affect this distributable amount. The amount of such cash received or expected to be received by the Trust (and its ability to pay distributions) has been and will be significantly and negatively affected by low commodity prices, which declined significantly during 2020, could decline again and could remain low for an extended period of time as a result of a variety of factors that are beyond the control of the Trust and PCEC. Other important factors that could cause actual results to differ materially include expenses related to the operation of the Underlying Properties, including lease operating expenses, expenses of the Trust, and reserves for anticipated future expenses. Statements made in this press release are qualified by the cautionary statements made in this press release. Neither PCEC nor the Trustee intends, and neither assumes any obligation, to update any of the statements included in this press release.

Pacific Coast Oil Trust
The Bank of New York Mellon Trust Company, N.A., as Trustee
Sarah Newell
1(512) 236-6555

Highlights:

• Fourth quarter revenues of $162.2 million, net loss of $13.0 million and operating cash flow of $29.4 million;
• Fourth quarter Adjusted EBITDA of $15.1 million and free cash flow of $25.8 million;
• Full year revenues of $697.1 million, net income of $2.2 million and operating cash flow of $91.8 million;
• Full year 2022 Adjusted EBITDA of $112.8 million and free cash flow of $82.6 million;
• Repurchased 40% of its outstanding Class A Series 1 preferred shares in the fourth quarter of 2022, which was the equivalent of approximately 6% of the Company’s fully diluted common shares outstanding at the time of the transaction;
• Following the aforementioned preferred share repurchase and prior to year-end 2022, the remaining balance of preferred shares was converted into common shares, which are now the only class of shares outstanding; and
• Recently announced two five-year contract awards in Australia with expected revenues of approximately A$937 million.

HOUSTON & CALGARY, Alberta--(BUSINESS WIRE)--Civeo Corporation (NYSE:CVEO) today reported financial and operating results for the fourth quarter and year ended December 31, 2022.

“Despite inflationary headwinds in 2022, Civeo reported strong results. We operated safely while achieving higher revenues and Adjusted EBITDA compared to 2021. We also generated significant free cash flow and substantially reduced our total debt balance as well as our net leverage ratio,” said Bradley J. Dodson, Civeo's President and Chief Executive Officer.

Mr. Dodson continued, “We continued to prioritize returning capital to shareholders by repurchasing the equivalent of approximately 1.5 million common shares during 2022. We allocated approximately $45 million of capital, or over 50% of the Company's 2022 free cash flow, to these repurchases. We will continue to evaluate opportunities to return capital to shareholders in 2023 as well as opportunities to deploy capital for both organic and inorganic growth.”

Mr. Dodson added, “Looking forward, we are encouraged by the recent contract awards in Australia with their significant terms and expected occupancy. In both cases, these contract renewals retained Civeo's previous work with the customer and granted us additional locations or additional room commitments, while taking share from competitors.”

Fourth Quarter 2022 Results

In the fourth quarter of 2022, Civeo generated revenues of $162.2 million and reported a net loss of $13.0 million, or $1.31 per diluted share. The loss results in part from $5.7 million in costs associated with impairments on assets in Australia and the U.S. During the fourth quarter of 2022, Civeo produced operating cash flow of $29.4 million, Adjusted EBITDA of $15.1 million and free cash flow of $25.8 million.

By comparison, in the fourth quarter of 2021, Civeo generated revenues of $159.8 million and reported net income of $9.8 million, or $0.58 per diluted share. During the fourth quarter of 2021, Civeo produced operating cash flow of $25.3 million, Adjusted EBITDA of $34.5 million and free cash flow of $26.1 million.

Overall, the decrease in Adjusted EBITDA in the fourth quarter of 2022 compared to 2021 was primarily due to (1) $8.5 million of non-operating items such as the impact of a stronger U.S. dollar relative to the Canadian and Australian dollars, increased stock-based compensation expense due to a higher stock price and larger gains on sales of assets in the fourth quarter of 2021; (2) $3.3 million of customer and insurance settlements which positively impacted the fourth quarter of 2021; (3) a $2.9 million increase in SG&A largely related to higher information technology expenses and professional fees; and (4) approximately $4.7 million of increased operating costs largely driven by inflationary pressures, partially mitigated by increased Australia village occupancy.

Full Year 2022 Results

For the full year 2022, the Company reported revenues of $697.1 million and net income of $2.2 million, or $0.21 loss per share. Adjusted EBITDA for the full year 2022 was $112.8 million. This compared to revenues of $594.5 million and a net loss of $0.6 million, or $0.04 per share, for the full year 2021. Adjusted EBITDA was $109.1 million in 2021. Results for the full year of 2022 reflect the impact of weakened Australian and Canadian dollars relative to the U.S. dollar, which decreased revenues and Adjusted EBITDA by $38.2 million and $8.1 million, respectively.

The increase in Adjusted EBITDA in 2022 as compared to 2021 was largely driven by Canadian contract camp activity in the first half of 2022, partially offset by the weakened Australian and Canadian dollar.

Business Segment Results

(Unless otherwise noted, the following discussion compares the quarterly results for the fourth quarter of 2022 to the results for the fourth quarter of 2021.)

Canada

During the fourth quarter of 2022, the Canada segment generated revenues of $88.0 million, operating loss of $6.1 million and Adjusted EBITDA of $11.8 million, compared to revenues of $92.2 million, operating income of $6.9 million and Adjusted EBITDA of $23.1 million in the fourth quarter of 2021. Results from the fourth quarter of 2022 reflect the impact of a weakened Canadian dollar relative to the U.S. dollar, which decreased revenues and Adjusted EBITDA by $6.9 million and $1.0 million, respectively.

On a constant currency basis, the Canadian segment experienced a 3% period-over-period increase in revenues driven by a 6% year-over-year increase in billed rooms. Despite the increase in billed rooms, Adjusted EBITDA for the Canadian segment decreased year-over-year primarily due to inflationary pressures and certain non-operating items that benefited the fourth quarter of 2021. Operating loss for the fourth quarter of 2022 includes asset impairment charges of $3.8 million.

Australia

During the fourth quarter of 2022, the Australia segment generated revenues of $73.1 million, operating loss of $2.7 million and Adjusted EBITDA of $13.1 million, compared to revenues of $62.3 million, operating income of $2.2 million and Adjusted EBITDA of $13.6 million in the fourth quarter of 2021. Results from the fourth quarter of 2022 reflect the impact of a weakened Australian dollar relative to the U.S. dollar, which decreased revenues and Adjusted EBITDA by $8.0 million and $1.5 million, respectively.

On a constant currency basis, the Australian segment experienced a 30% period-over-period increase in revenues driven by increased integrated services activity and a 12% year-over- year increase in billed rooms. Adjusted EBITDA from the Australian segment increased year-over-year due to increased village occupancy and integrated services activity, partially offset by inflationary pressures throughout the business.

U.S.

The U.S. segment generated revenues of $1.1 million, operating loss of $3.7 million and negative Adjusted EBITDA of $0.4 million in the fourth quarter of 2022, compared to revenues of $5.3 million, operating loss of $3.0 million and Adjusted EBITDA of $3.3 million in the fourth quarter of 2021. The revenue and Adjusted EBITDA decrease was primarily due to a $3.8 million gain on sale of assets from the fourth quarter 2021 sale of our West Permian Lodge and the sale of the segment's offshore and wellsite businesses in the second half of 2022. Operating loss for the fourth quarter of 2022 includes asset impairment charges of $1.9 million.

Financial Condition

As of December 31, 2022, Civeo had total liquidity of approximately $104.1 million, consisting of $96.1 million available under its revolving credit facilities and $8.0 million of cash on hand.

Civeo’s total debt outstanding on December 31, 2022 was $132.0 million, a $5.8 million increase from September 30, 2022 and a $43.1 million decrease from December 31, 2021.

Civeo reported a net leverage ratio of 1.1x as of December 31, 2022.

During 2022, Civeo invested $25.4 million in capital expenditures, up from $15.6 million during 2021. This increase is primarily due to increased maintenance spending on the Company's lodges and villages.

Full Year 2023 Guidance

For the full year of 2023, Civeo expects revenues of $630.0 million to $650.0 million, EBITDA of $85.0 million to $95.0 million and capital expenditures of $25.0 million to $30.0 million.

Conference Call

Civeo will host a conference call to discuss its fourth quarter 2022 financial results today at 11:00 a.m. Eastern time. This call is being webcast and can be accessed at Civeo's website at www.civeo.com. Participants may also join the conference call by dialing (877) 423-9813 in the United States or (201) 689-8573 internationally and asking for the Civeo call or using the conference ID 13736531#. A replay will be available after the call by dialing (844) 512-2921 in the United States or (412) 317-6671 internationally and using the conference ID 13736531#.

About Civeo

Civeo Corporation is a leading provider of hospitality services with prominent market positions in the Canadian oil sands and the Australian natural resource regions. Civeo offers comprehensive solutions for lodging hundreds or thousands of workers with its long-term and temporary accommodations and provides food services, housekeeping, facility management, laundry, water and wastewater treatment, power generation, communications systems, security and logistics services. Civeo currently operates a total of 26 lodges and villages in Canada, Australia and the U.S., with an aggregate of approximately 28,000 rooms. Civeo is publicly traded under the symbol CVEO on the New York Stock Exchange. For more information, please visit Civeo's website at www.civeo.com.

Forward Looking Statements

This news release contains forward-looking statements within the meaning of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are those that do not state historical facts and are, therefore, inherently subject to risks and uncertainties. The forward-looking statements herein include the statements regarding Civeo’s future plans and outlook, including guidance, current trends and liquidity needs, and ability to pay down debt are based on then current expectations and entail various risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. Such risks and uncertainties include, among other things, risks associated with the general nature of the accommodations industry, risks associated with the level of supply and demand for oil, coal, iron ore and other minerals, including the level of activity, spending and developments in the Canadian oil sands, the level of demand for coal and other natural resources from, and investments and opportunities in, Australia, and fluctuations or sharp declines in the current and future prices of oil, natural gas, coal, iron ore and other minerals, risks associated with failure by our customers to reach positive final investment decisions on, or otherwise not complete, projects with respect to which we have been awarded contracts, which may cause those customers to terminate or postpone contracts, risks associated with currency exchange rates, risks associated with the company’s ability to integrate acquisitions, risks associated with labor shortages, risks associated with the development of new projects, including whether such projects will continue in the future, risks associated with the trading price of the company’s common shares, availability and cost of capital, risks associated with general global economic conditions, inflation, global weather conditions, natural disasters, global health concerns, such as the COVID-19 pandemic, and security threats and changes to government and environmental regulations, including climate change, and other factors discussed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of Civeo’s most recent annual report on Form 10-K and other reports the company may file from time to time with the U.S. Securities and Exchange Commission. Each forward-looking statement contained herein speaks only as of the date of this release. Except as required by law, Civeo expressly disclaims any intention or obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Information

EBITDA, Adjusted EBITDA, free cash flow, net debt, bank-adjusted EBITDA and net leverage ratio are non-GAAP financial measures. See “Non-GAAP Reconciliation” below for definitions and additional information concerning non-GAAP financial measures, including a reconciliation of the non-GAAP financial information presented in this press release to the most directly comparable financial information presented in accordance with GAAP. Non-GAAP financial information supplements and should be read together with, and is not an alternative or substitute for, the Company’s financial results reported in accordance with GAAP. Because non-GAAP financial information is not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures.

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