NET Power Inc. (NPWR) Earnings

Management highlights

### Market & Strategic Vision - Growing global power demand, driven especially by AI data center development, prioritizes speed, scale, and reliability over power cost and heat efficiency. The vast majority of new generation demand will be met by natural gas-fired power. - NetPower's core strategy is to deliver low-cost clean firm power via a circular ecosystem: natural gas power generation with >90% CO2 capture, with captured CO2 used for enhanced oil recovery (EOR) in the Permian Basin, permanently sequestering CO2 while supporting incremental domestic oil production. - Third-party validated life cycle emissions for NetPower's solution are ~210 grams of CO2 equivalent per kWh, far lower than unabated combined cycle gas (440 g/kWh) and coal (over 900 g/kWh). ### Project Permian Phase 1 Updates - The first commercial 80 MW net output project is sited on Oxy-leased acreage near Midland, Texas, with optionality to scale to 800 MW total at the same site. Final Investment Decision (FID) is targeted for H2 2026, with commercial operation targeted for early 2029. - The project pairs a natural gas combined cycle configuration with Entropy's proven post-combustion carbon capture (PCC) technology, capturing 380,000 tons of CO2 per year. All captured CO2 will be offtaken by Oxy for EOR under indicative terms that are moving toward a definitive agreement. - A strategic advisor is leading a formal commercial offtake process, which is the gating condition for project financing and proof of durable market demand. Gas supply MOU with a major supplier is targeted for Q2 2026. - Long-lead equipment procurement is moving methodically in parallel with commercial and financing work streams: the $77 million Siemens gas turbine package is already contracted; switchyard and generator packages are targeted for June 2026; HRSGs and steam turbine packages for July; PCC equipment for August-September 2026. All engineering work is structured to reduce non-recurring costs for future repeat deployments. ### Technology Partnership - NetPower and Entropy are finalizing an exclusive joint development agreement (JDA) for Entropy's amine-based PCC solvent technology for U.S. power generation through 2032, targeted to close in Q2 2026. Entropy will contribute up to 49% equity for future deployments starting with Project Permian Phase 1. - Entropy's Glacier Phase 1 project has operated commercially for over 3 years; Glacier Phase 2, which will demonstrate integrated CCS on a gas turbine capturing 160,000 tons of CO2 annually, is expected to come online in Q2 2026, a major de-risking milestone for Project Permian. ### Financial Position - New CFO Lee Schumann joined the company, bringing 25 years of power project finance experience across thermal, renewable, and distributed energy assets. - Total project TIC (total installed cost) for Project Permian Phase 1 remains targeted between $475 million and $575 million. NetPower's targeted equity contribution is $125 million to $175 million, with the balance from debt and Entropy equity participation. NetPower's $319 million cash balance fully covers its maximum equity commitment and leaves dry powder for future development. The targeted offtake price of $100/MWh or lower supports project bankability and attractive returns, far below competing clean firm power options.

Guidance

- Project Permian Phase 1 FID is maintained at a target of H2 2026, with commercial operation in early 2029. - Project Permian air permitting is on track to be completed in H2 2026, with low expected risk for remaining required permits. - Finalization of the Entropy JDA is maintained at Q2 2026, and a gas supply MOU with a major supplier is targeted for Q2 2026. - Quarterly G&A burn rate is maintained at $8 million to $9 million before capital expenditure ramps up, giving the company sufficient runway to reach FID. Project spend is expected to ramp up in the coming months as long-lead equipment is released for procurement, contingent on commercial offtake progress.

Segment performance

NetPower is a single-segment clean natural gas power generation company with no disclosed separate operating segment performance in this earnings call. The company reported total cash and cash equivalents of $319 million as of quarter-end March 31, 2026, with no outstanding debt. Quarterly G&A operating expenses run between $8 million and $9 million.

Risks & headwinds

- The largest near-term risk is uncertain market acceptance of NetPower's EOR-based clean power model. Some potential customers are unwilling to associate with oil production, which could prevent offtake agreements from being secured. - The company will not commit significant additional capital to equipment procurement until committed customer demand is confirmed, so delayed or failed offtake agreements will slow project development and increase timelines. - Equipment lead times are volatile due to broader market activity, requiring active monthly adjustments to procurement schedules to maintain the 2029 commercial operation target. - This is the first deployment of the full integrated technology through Texas regulatory permitting, creating uncertainty around permit timing and final terms, though current interactions with regulators are aligned and on schedule.

Analyst Q&A

• Q: What milestones must be hit before the company will procure additional long-lead equipment, and how will the burn rate evolve as development progresses? /

  A: The primary required milestone is evidence of committed commercial interest from offtakers to confirm a market exists for NetPower's clean power product, including demand for future expansion beyond the initial 80 MW phase. The company will only release additional pre-FID purchase orders after this confirmation, adjusting procurement timelines monthly to account for volatile vendor lead times and keep the 2029 commercial operation target on track.

• Q: What is the status of regulatory permitting for the 80 MW initial project? /

  A: The required air permit is on track to be received in H2 2026, with all permitting processes proceeding well. All other required permits for commercial operation are planned, and management sees very little risk to permitting timelines or outcomes to date; interactions with the Texas permitting agency are aligned, and expected emissions levels fall within acceptable regulatory limits.

• Q: What factors determine where NetPower's equity contribution will fall within the 125 million to 175 million range, and have commercial terms been negotiated? /

  A: The final equity size depends on the structure of the full capital stack, including Entropy's equity participation (which can go up to 49% of total project equity) and the type of debt financing obtained. Commercial terms are still being finalized in parallel with the offtake process: the form of debt (equipment financing vs standard project finance) will depend on the outcome of offtake negotiations. Even at the maximum 175 million equity commitment, NetPower's 319 million cash balance leaves sufficient dry powder for future expansion.