Big Sky Industrial Inc. Common Stock Noble Capital Markets Virtual Equity Investor Conference

Thanks, Mark, and thank you to everybody at Noble for having me this morning. I appreciate everybody getting up early and listening to what we're doing at Big Sky. We have a lot going on. We're very excited about what we're building here at the company, and I'm looking forward to running through this with everybody this morning. I'll try to go pretty quick so I can leave the floor open for some questions. Forward-looking statements, if anybody wants to double-check these, I'd direct you to our website. An important slide, as really the key overview of what we're doing here, so I'll spend a little more time on this than I will some of the other ones. I think I would direct you to the middle of the page first because that gives you a good mental view of where our assets are in Montana.

If you look at that map, I know it's not a very detailed map, but it should be familiar. That's the state of Montana. The blue dot on the left is our legacy oil field, the Cut Bank oil field. They're about 15 miles to the east, and the green dot is what we refer to as the Big Sky Carbon Hub, which is where all of our attention and all of our capital have gone over the last couple of years, developing a very large-scale helium and carbon management project. Moving over to the left, what Big Sky is right now, historically, we've been a legacy oil and gas company. A couple of years, we really pivoted our business to focus on our asset base, in Montana, around healing production, around carbon management, around energy infrastructure.

Just for a reference, the board, the insiders, a couple of board members, and myself own a very large percentage of this company, about 27%. So we have a high alignment with our common shareholders, with no tricky structure in the capital stack, no options, no warrants, no pref, et cetera. A lot of underlying value in our business from our legacy oil field, our legacy oil assets. Oil's come up a little bit, so this number is a little bit bigger than what we have it at quarter end, which is how it's reported. But our legacy oil reserves are still worth about $25 million-$30 million on a present value basis. Going down to the industrial gas resource of what we're calling phase 1, which phase 1 is the development that we're doing and we're starting right now.

I'm not sure how familiar everybody is with gas volumes, but I think the takeaway from 1.3 billion cubic feet of helium, close to half a trillion cubic feet of CO2, and $115 million NPV value on phase 1, these are absolutely massive volumes. These aren't small exploratory projects. This is a large-scale geologic structure that holds some of the largest volumes of these industrial gases in the U.S. And when you take the deliverability and availability to the U.S. markets, one of the largest in the world. We have a very large carbon management business once we're up and running and commercial, where we're capturing and sequestering about 125,000 metric tons of CO2 per year. For reference, that's roughly about 25,000 cars off of the road annually.

Going down to the valuation for any, I think this is as compelling of a situation that currently exists in micro and small-cap markets. We trade at a very significant discount both to our NAV and on a public valuation basis based on both public comps and where industrial gas-heavy, infrastructure-heavy M&A takes place. Moving over to the right, I think just to summarize this page, we have a very large asset that's going to be producing for a very long time, or we say 50 years plus. That's really kind of the ceiling that people say when you do have a large-scale asset like this. That 50 is probably closer to 150. This asset's going to be producing much longer than any of us are going to be around going forward.

As part of our carbon management business, which is the capture and sequestration of the CO2, we create very large Section 45Q credit carbon capture tax credit pools. Our first phase alone is about $130 million. From a timeline basis, we're scheduled to be up and running late Q1 of 2027. We've begun construction. We've signed our offtake agreements. We've filed our permits. The timeline has been very substantially de-risked and sequenced, and everything is moving in the direction to where it's not a matter of years like most projects, it's a matter of months when we have this up and running. This is something I'll go through pretty quickly. It's very important, but it's kind of just a snapshot of everything I've already talked about our pivot.

We have monetized our oil and gas assets, and we've recycled that capital up in Montana to really develop this long-life helium carbon capture business that we've been developing. On the right, we talked about moats. This is something that is not repeatable. There's not an asset out there in the markets today with a company our size that controls 100% of something like this. It's one of the largest structures in North America. We control and we own all of the land, all of the processing, all of the infrastructure, et cetera. I'll get into a minute why that's highly advantageous, because each one of our revenue streams, it's independent, but it also benefits each revenue stream. It's a sum of the parts where one plus one plus one isn't really three. You put all those revenue streams together and it really equals something much more.

Excuse me. Very simple slide. In my opinion, the most important slide in the entire deck. I call it the flywheel in action, which I like that name very much, even though sometimes it sounds silly. This is really what our business looks like when we're commercial next year. Number 1, we produce low-cost industrial gases off of our industrial gas structure. We've drilled 4 wells during 2025. That really provides us a long life, steady, low decline production rates. The next step is we have a very simple, small gathering system that takes the gas from those producing wells to our processing facility. Number 2, where that processing facility does 2 things.

The first thing it does is it separates the helium out, it purifies it, and we sell that via long-term offtake agreement with one of the largest industrial gas companies in the world, where they come in, they pick up our helium from our plant site, pay us, transfer of title, transfer of cost, and they drive off. The first step in making money here is the helium. As part of that helium production and processing process, there's a very large amount of CO2 that's created at this helium plant. We capture 100% of that CO2, and we do 2 things with it. The vast majority of it, we put it into the last leg of our pipeline, very short piece, and we permanently sequester that CO2 underground, never to come out again.

We take the lesser part of it into a truck that we own, drive it 15 miles down a straight road and inject that into our oil field reservoir. Reservoir pressure builds, incremental barrels come out of the ground. We make money on that incremental oil. So we're making money on the helium. We're making money on the oil. Where it gets very interesting, in my opinion, is the U.S. government incentivizes industrial producers like us, that as part of their process, large amounts of CO2 are created to capture that CO2 and to either utilize it or sequester it. The acronym is CCUS, Carbon Capture Utilization and Sequestration, and they will pay us $85 per metric ton, escalating every year 3% for 12 years to handle and to sequester our CO2 that we're capturing off of this industrial plant. Ends up being fairly large numbers.

What we do with that tax credit stream is we monetize that tax credit stream, and then we reinvest that money into more processing phases, more development going forward. Stepping back a little bit onto the flywheel, every single number benefits, grows the business, and once you get to number 4, you reinvest that money, and then you just start it again, and you become a self-funding business with minimal equity dilution going forward. After phase 1, phase 2, phase 3 of reinvesting your proceeds and building more and more processing capabilities out, you end up with a very large and lucrative business. I'll go very quick through this phase. This slide, this is really our sources of capital and how we paid for and how we're paying for our phase 1. We're fully funded on phase 1.

We raised straight common equity this past March, as well as put in a project finance debt facility. We are forecast to come out of our phase 1 build at extremely low levels of leverage, especially considering most infrastructure type of projects, most infrastructure-heavy, midstream-heavy public companies run leverage ratios that are in the mid to high single digits. We are forecasted to be about 1 times net leverage coming out in the first quarter of next year. That graph on the right shows really where our cash balance is, the availability we have left and where we are in the process. I will say, as I mentioned before, we put a late first quarter and late first quarter is really like a March 31st date of having this project completed and online. We have followed that timeline successfully, and continue to follow it today.

Something I will gloss over very quickly because I have kind of already talked about it. This is just some more detail about how our platform really creates three revenue streams that not only are not redundant, but benefit each of the other revenue streams through helium, through carbon management, and through oil production. Very important slide here. I know helium is very topical in the markets right now. Like any topical business, you get a lot of promotion out there. I think that if you look at what we are doing and every aspect that we have accomplished so far, this is probably the biggest credibility jolt that we have had from a third party basis. In March, might be early April of this year, we signed a long-term offtake agreement for all of our helium that we are producing with the largest industrial gas company in the world.