Verde Clean Fuels, Inc. · NASDAQ:VGAS
Verde Clean Fuels — CENAQ Energy — SPAC Merger (August 2022)
41 slides from Verde Clean Fuels's SPAC merger presentation, Aug 12, 2022
Slide 1: Investor Presentation August 2022
204 137 108 Investor Presentation August 2022 Copyright © 2022 Verde Clean Fuels DRAFT as of 3/16/22 CENAQ Energy Corp.
Slide 2: Disclaimer: Forward-Looking Statements
2 204 137 108 DISCLAIMER FORWARD - LOOKING STATEMENTS All statements other than statements of historical facts contained in this presentation (this “Presentation”) are forward - looking statements . Forward - looking statements may generally be identified by the use of words such as “believe,” “may,
Slide 3: Introducing Today's Speakers
3 204 137 108 Introducing Today’s Speakers Ernie Miller Chief Executive Officer J. Russell Porter Chief Executive Officer CENAQ Energy Corp. John Doyle Chief Technology Officer
Slide 4: Transaction summary: Verde and CENAQ combining
4 204 137 108 • Verde and CENAQ are combining to advance and accelerate the commercialization of Verde’s operations • Verde’s shareholders will commit $8MM to the PIPE and will roll - over 100% of their equity • Certain members of CENAQ’s sponsor and affiliates are committing $50MM to the PIPE ($70M
Slide 5: Today's Discussion
5 204 137 108 Today’s Discussion Why Renewable Gasoline? Why Verde? Why Invest in CENAQ ’s PIPE?
Slide 6: Why Renewable Gasoline?
6 204 137 108 Why Renewable Gasoline? Renewable Gasoline Reduces Lifecycle Emissions by over 67% Compared to Traditional Gasoline 3 Gasoline Demand Remains Strong Over Time Despite Electric Vehicle (“EV”) Adoption 2 Gasoline Accounts for More than 20% of U.S. Energy - related CO 2 Emissions 1 • Tran
Slide 7: Transportation is the Largest U.S. Energy-related Emitter of CO2
7 204 137 108 Transportation is the Largest U.S. Energy - related Emitter of CO 2 Transportation 37% Industrial 28% Residential 19% Commercial 16% 2019: Energy - related CO 2 Emissions (%) 1,086 468 261 109 0 400 800 1,200 Gasoline Diesel Jet Fuel All Other Fuels 2019 Transportation Emissions (MM To
Slide 8: Strong Demand for Gasoline Through 2035
8 204 137 108 99% 74% 1% 24% 3% 2021 2035E Strong Demand for Gasoline Through 2035 2 Even With Aggressive Penetration of EV, Gasoline Demand will Remain Near Current Levels 1 BloombergNEF: Other vehicles include fuel cell, natural gas and hybrid vehicles 2 EIA – “2022 Annual Energy Outlook”; 2035 ga
Slide 9: Renewable Gasoline is Environmentally Advantaged
9 204 137 108 Renewable Gasoline is Environmentally Advantaged Source: Verde Clean Fuels, Fuels Institute – “Life Cycle Analysis Comparison” (January 2022) 3 How Renewable Gasoline Achieves a Lower Carbon Intensity Score Materials / Manufacturing 1 Feedstock / Source 2 Vehicle Emissions 3 Recycling
Slide 10: Life Cycle Analysis Comparison
10 204 137 108 Fuels Institute – Life Cycle Analysis Comparison Renewable Gasoline is Environmentally Advantaged Materials & Manufacturing Emissions 2 Well - to - Wheels 3 Source: BloombergNEF, EIA – “2022 Annual Energy Outlook”, EPA – “National Overview: Facts and Figures on Materials, Wastes and R
Slide 11: Renewable Gasoline Provides Waste-to-Gasoline Opportunity
11 204 137 108 ~60% of MSW is cellulosic and useful as “renewable” feedstock 1 Over 292MM tons of MSW are created every year 1 x Drop - in fuel created with existing Municipal Solid Wastes creates numerous expansion opportunities x Flexibility of renewable feedstock provided by Verde’s proprietary p
Slide 12: Renewable Gasoline is Readily Adoptable
12 204 137 108 Renewable Gasoline is Readily Adoptable 1 Association for Convenience and Fuel Retailing (NACS) - www.convenience.org/Topics/Fuels/The - US - Petroleum - Industry - Statistics - Definitions EIA – “2022 Annual Energy Outlook” 4 Drop - In Fuel Renewable gasoline is a drop - in fuel that
Slide 13: Why Verde Clean Fuels?
13 204 137 108 Why Verde Clean Fuels? Deep and Robust Set of Investment Opportunities 5 Demonstration Facility With Over 10,500 Hours has Proven Verde’s Patented Process 3 Greater than $110MM Invested With 8 U.S. Patents Providing a Significant Head - start 2 Proven Leadership Te am With Over 100 Ye
Slide 14: Proven Leadership Team
14 204 137 108 Proven Leadership Team Ernie Miller, Chief Executive Officer • Developed and financed over 4,500 MW of industrial cogeneration facilities at 6 locations for Calpine representing more than $4Bn in capital investment • Had 44 natural gas fired power plants under construction with more t
Slide 15: Leader in the Development of Renewable Gasoline
15 204 137 108 Strategic Relationships Leader in the Development of Renewable Gasoline Foundation Built: 2007 – 2013 • Founded in 2007 as Primus Green Energy • Initial research and development phase • Process Trademarked as STG+® Demonstration Facility and Technology: 2013 – 2015 • Core patents appr
Slide 16: Demonstration Facility has Proven Verde's Patented Process
16 204 137 108 Demonstration Facility has Proven Verde’s Patented Process • Over 10,500 operational hours • Multiple operational campaigns of on - spec RBOB gasoline • Reactor designs, gas velocity, process configurations, and control system representative of full - scale plant • Operable commercial
Slide 17: Verde's Patent Portfolio
17 204 137 108 Verde’s Patent Portfolio • 8 US Patents • Supports and protects ability to produce commodity - grade gasoline from syngas • single - loop • sequential set of reactors with recycle • Protect the specific fuel composition produced by the Verde system • Protect several potential future e
Slide 18: Renewable Gasoline is Economically Advantaged
18 204 137 108 Attractive Margins Renewable gasoline generates margins greater than $5.00 / Gal compared to RD margins of $0.77/gal 3 and RNG margins of $3.50/GGE 3 Low to No Cost Feedstocks Low to no cost feedstocks help drive strong margins Renewable Gasoline is Economically Advantaged Growing Eco
Slide 19: Strong Economic Profile Buffered from Feedstock Inflationary Costs
19 204 137 108 Strong Economic Profile Buffered from Feedstock Inflationary Costs Project 1 IRR Sensitivity Levered IRR: 37% Base Case Metrics $3.00 / Gal 1 $131MM $2.50 / Gal $1.69 / Gal $10.00 / Ton Source: Company Model 1 Assumes RIN pricing multiplier of 1.5x RINs (Decrease) / Increase Capex Inc
Slide 20: First Facility Expected to Be Operational in 2024
20 204 137 108 First Facility Expected to Be Operational in 2024 Source: Company Model 1 Includes MSW, Green Waste and C&D wood waste; Estimate provided for Verde by Ecostrat Inc.; Biomass Supply Chain Assessment J an uary 2022 2 Represents 2025E production, first full year of production 3 Illustrat
Slide 21: Backlog of Near-term Expansion Opportunities
21 204 137 108 2021 2022 2023 2024 2025 2026 AZ Phase 1 Bakersfield, CA AZ Phase 2 Odessa, TX Development FEED Fabrication & Civil Erection & Commissioning AZ Phase 1 $36MM 1 21,500 Gal / day Bakersfield, CA Not Disclosed $50MM 1 43,000 Gal / day AZ Phase 2 $116MM 1 86,000 Gal / day Odessa, TX Not D
Slide 22: Modular Scale Provides Long-term Expansion Opportunities
22 204 137 108 Modular Scale to Fit Design Provides Long - term Expansion Opportunities Expansion Opportunities at More Than 690 Landfills Across the U.S. With More Than 100,000 Tons / Year of MSW Source: EPA National Overview: Facts and Figures on Materials, Wastes and Recycling, EPA – “Landfill Me
Slide 23: Why Invest in CENAQ's PIPE?
23 204 137 108 Why Invest in CENAQ’s PIPE? Win - Win Valuation that is Compelling for both SPAC Shareholders and PIPE Investors 3 Strong Growth and Economic Profile 2 Pure - play Renewable Gasoline Public Investment Opportunity 1 • Opportunity to invest in a proprietary technology, targeting renewab
Slide 24: Pure-play Renewable Gasoline Public Investment Opportunity
24 204 137 108 Pure - play Renewable Gasoline Public Investment Opportunity Comparable Universe Key Criteria Defining Best Comps Renewable Natural Gas Peers Renewable Diesel Peers Biofuel Peers • Adjacent industries within the broader renewables landscape with emphasis on Energy Transition • Large a
Slide 25: Initial Four Projects Expected to Add Significant Revenue and EBITDA Scale
25 204 137 108 EBITDA Margin 50% 50% 51% $25 $308 $524 2024E 2025E 2026E $13 $153 $269 2024E 2025E 2026E Verde’s Initial Four Projects Expected to Add Significant Revenue and EBITDA Scale EBITDA ($MM) Revenue ($MM) Source: Company Model 2 2026E Annual Revenue from VCF’s First Four Projects Strong EB
Slide 26: Operational Benchmarking: Growth and Margins Relative to Peers
26 204 137 108 364% 147% 96% 55% 23% 21% 7% 106% 503% 13% BCF OPL CLNE LFG MNTK NESTE DAR GEVO AMTX REGI 50% 46% 43% 54% 64% 15% 35% NM 23% 10% 50% 47% 59% 55% 66% 16% NA 27% 26% 12% BCF OPL CLNE LFG MNTK NESTE DAR GEVO AMTX REGI Operational Benchmarking: Strong Growth and Margins Relative to Peers
Slide 27: Illustrative Sources & Uses, Valuation and Ownership
1 75% (3.2MM) of the 4.3MM potential Sponsor and Anchor Investor Shares are subject to vesting price targets at $15 and $18 / s ha re. 2 Illustrative pro forma ownership excludes the impact of Public Warrants, Sponsor Warrants, and VCF Existing Equityholders Equ it y Earnout. 3 Certain members of CE
Slide 28: Verde's Significant Upside Potential
28 204 137 108 1.9x 9.9x 7.1x 3.7x 3.2x 25.9x 9.8x 8.3x 3.3x BCF MNTK LFG CLNE OPL GEVO NESTE REGI AMTX 0.9x 6.5x 3.9x 2.2x 1.5x 7.1x 1.6x 1.0x 0.9x BCF MNTK LFG CLNE OPL GEVO NESTE REGI AMTX Verde’s Significant Upside Potential Implied 77% Discount to Peer Median at IBC Implied Valuation Upside 1 •
Slide 29: Key Investment Highlights
29 204 137 108 Key Investment Highlights Why Renewable Gasoline? Why Verde? Why Invest in CENAQ’s PIPE? • Gasoline Accounts for More than 20% of U.S. Energy - related CO 2 Emissions • Gasoline Demand Remains Strong Over Time Despite EV Adoption • Reduces Lifecycle Emissions by over 67% Compared to T
Slide 30: Appendix
30 204 137 108 Appendix
Slide 31: Verde's Patented Process
31 204 137 108 Verde’s Patented Process Verde’s Solution Presents an Attractive Opportunity for Investors Ability to Invest in a Differentiated, High Growth Energy Transition Company at an Attractive Valuation Verde Clean Fuels Renewable Gasoline is Addressing a Significant Challenge in Decarbonizin
Slide 32: Capturing Value in the Federal RIN Market
32 204 137 108 0.1 0.2 0.3 0.3 0.4 0.6 0.6 0.8 1.7 2.9 4.0 5.2 6.7 8.1 9.9 12.9 15.2 0.1 0.3 0.5 1.0 1.8 3.0 4.3 5.5 7.0 8.5 10.5 13.5 16.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022E Finalized Cellulosic Biofuel Cellulosic Biofuel Obligation $0.00 $1.00 $2.00 $3.00 $4.00 Jan-1
Slide 33: Feedstock Availability Study: Maricopa, AZ
33 204 137 108 Project 1 – Phase 1 | Maricopa, AZ | Feedstock Availability Study Total Available RFS2 Eligible Feedstock by Type 1 615,991 tpy 28% 528,712 tpy 24% 507,569 tpy 23% 251,134 12% 174,559 8% 111,197 5% Food Waste Paper Green Waste C&D Wood Textiles Animal Byproducts Commentary Source: Bio
Slide 34: Unique Feedstock Dynamics
34 204 137 108 Unique Feedstock Dynamics Many Competing Processes Use Feedstocks that Have Value in Other Applications Verde Clean Fuels Utilizes Feedstocks that are Abundant, Low Cost, and Inflation Resistant Competing Technologies VCF Biomass Mixed Plastics Municipal Solid Waste • Feedstocks such
Slide 35: Unit Economics and Sensitivity Analysis
35 204 137 108 Unit Economics and Sensitivity Analysis AZ Phase 1 and 2 Unit Economics Project - level Capital Spending and Returns $2.50 $2.50 $4.50 $4.50 $0.65 $0.65 $7.65 $1.69 $5.96 $1.36 $4.60 Base Gasoline RFS D3 RIN LCFS Carbon Credit Total Revenue Production Costs Phase 1 Net Economics Phase
Slide 36: Managing Scale Up and Project Execution
36 204 137 108 x Building a Commercial Demonstration Plant is costly and difficult to fund. Most companies try to skip this step, jumping from Pi lot Scale to Commercial Project x Verde Clean Fuels has funded, built, and operated a first - class Commercial Demonstration Facility to further develop i
Slide 37: ICE and Battery Vehicle GHG Emissions Breakdown
37 204 137 108 ICE and Battery Vehicle GHG Emissions Breakdown Tons GHG Emissions @ 200,000 mi Traditional ICE Well - to - Wheels Breakdown Traditional ICE Vehicle GHG Emissions Source: Fuels Institute – “Life Cycle Analysis Comparison” (January 2022) Battery Electric Vehicle GHG Emissions Battery W
Slide 38: Renewable Gasoline GHG Emissions Breakdown
38 204 137 108 23 23 23 1 4 28 Well-to-Wheels Manufacturing Emissions Materials Emissions Total GHG Emissions (217) 181 70 34 Existing Biomass Emissions (gCO2 / MJ) Biomass-to-Tank Tank-to-Wheels Biomass Emissions (gCO2 / MJ) Renewable Gasoline GHG Emissions Breakdown Tons GHG Emissions @ 200,000 mi
Slide 39: Pro Forma Financial Projections
39 204 137 108 Pro Forma Financial Projections Source: Company Model Note: Assumes Product Revenue of $7.65 / Gal consisting of gasoline price of $2.50 / Gal; RIN price of $3.00 / Gal; and LCFS val ue of $0.65 / Gal ($ in thousands, except where noted) 2022E 2023E 2024E 2025E 2026E Gallons of Gasoli
Slide 40: Verde's U.S. Patents
40 204 137 108 Verde’s U.S. Patents Title Description Patent Number Date Issued Single - Loop Octane Enrichment Covers a system for making high octane fuel; the system includes a single loop system, e.g., the system of US Patent No. 9,169,166 or US Patent No. 9,670,416, for making medium octane fuel
Slide 41: Risks Relating to Bluescape Intermediate
41 204 137 108 Risks Relating to Bluescape Intermediate • Our commercial success depends on our ability to develop and operate production facilities for the commercial production of renewable gasoline . • Our limited history makes it difficult to evaluate our business and prospects and may increase