Venture Global, Inc. 2026 Q2 Earnings Call

Good morning, everyone, and welcome to Venture Global Inc.'s second quarter 2026 earnings call. I am joined this morning by Mike Sabel, Venture Global's CEO, Executive Co-Chairman and Founder, Jonathan Thayer, our CFO, and other members of Venture Global's senior management team. Before I begin, I would like to remind all listeners that our remarks, including answers to your questions, may contain forward-looking statements, and actual results may differ materially from what is described in these statements. I encourage you to refer to the disclaimers in our earnings presentation, which is available on the investor section of our website. Additionally, we may include references to certain non-GAAP metrics such as consolidated adjusted EBITDA, which we may refer to simply as EBITDA during this call.

A reconciliation of these metrics to the most relevant GAAP metrics or measures can be found in the appendix of the earnings presentation posted on our website. Finally, the guidance in this presentation is only effective as of today. In general, we will not update guidance until the following quarter and will not update or affirm guidance other than through broadly disseminated public disclosure. I will now turn the call over to Mike Sabel.

Thank you, Ben. Good morning, everyone, and thank you for joining us today. We are pleased to share our second quarter 2026 results. I will begin the call with an overview of our key accomplishments in the quarter and an update on the business. I will then make some remarks on the LNG industry before turning over the call to Jack, who will provide a more detailed review of our financial results as well as updated guidance for 2026. Following all prepared remarks, we will open the call to Q&A. On page 5, you can see some of the highlights for the quarter, including our largest ever quarterly EBITDA of $2.5 billion and significant growth in volumes, revenue, income from operations, net income and EBITDA year-over-year.

We are increasing our 2026 EBITDA guidance to $8.7 billion-$9.1 billion from $8.2 billion-$8.5 billion, based on current market outlook for the remainder of the year. Given outsized LNG price volatility related to events in the Middle East, we have maintained a broader-than-usual guidance range than in the past. As we contract the remainder of our expected volumes for the year, we expect to tighten this range following the third quarter. Jack will discuss these numbers in greater detail in a moment. Turning to page 6. In the second quarter, we exported 127 cargoes while maintaining our incredible record of safety. Commercial momentum continued in the second quarter, where we executed over 2 MTPA of new or increased LNG offtake agreements with new and existing customers, including TotalEnergies, Vitol, EnBW and Atlantic-SEE.

The market has welcomed Venture Global's ability to offer customers optionality in uniquely contracting short, medium and long-term volumes. I am also proud to highlight that we exported our 1,000th cargo just four years after Venture Global's first cargo in the first week of March 2022. The team has worked tirelessly to make us the safest, most efficient and best performing LNG company in the industry, and we now have the track record to prove it. These efforts, along with the investments, innovations and process improvements we have made to our machines, position Venture Global well to export our next 1,000 cargoes in a fraction of the time. In just a few years, we should be exporting more than 1,000 cargoes every year. With our continued operational and commercial execution, we are confident in the resiliency of our cash flows.

On that basis, the board has recently approved an increase in our quarterly common dividends to $0.04 per share, a 122% increase. We are pleased to show this dividend growth and reward our shareholders. This quarter, we were very active in optimizing our capital structure and reducing our capital costs. We refinanced several tranches of term loans, bonds and even preferred equity, which totaled more than $5.3 billion of capital cumulatively and should reduce our annual interest and coupon obligations by more than $100 million. We added a new $1.5 billion term loan against our nine LNG carriers, which had previously been funded by cash. We appreciate our capital partners and the team who has worked tirelessly to bring all these transactions together. Venture Global has now raised or refinanced more than $103 billion of capital. Moving to page 7. Our contracted position for 2026 has increased markedly to over 91% of the portfolio from the 84% previously reported on our first quarter earnings call in May.

The 127 cargoes produced in the second quarter were at the high end of our expected production range, and we are tightening and raising the midpoint of the cargo range for the full year. While normal seasonality does impact production during warmer months, I do think it is worth noting that we have made operational and capital investments to reduce the adverse impact of summer temperatures, which you can see is demonstrated in our relatively stable production profile.

Rather than artificially increasing LNG production by deferring maintenance to capitalize on stronger market demand, our solid production performance during the summer months reflects our ongoing focus on innovation and operational improvement. In fact, instead of postponing maintenance, we completed significant planned work during the quarter, including hot gas path inspections on the gas turbines at Calcasieu Pass, activities that would typically require substantial production downtime at most LNG facilities. Given our modular configuration and built-in redundancies, the impact of maintenance on our LNG production was inconsequential. Importantly, we are still early in our optimization journey and expect to debottleneck and deliver further enhancements to our output and operational performance over the coming years. Turning to page 8, our in-house engineering procurement and construction team is working hard to safely keep CP2 on time and on budget.

Now, just over a year from FID, which was July of last year, July 28th, the project has roofs raised on all four LNG storage tanks, 16 fabricated liquefaction modules on site, and five of the gas and steam turbines that made up the power plant on foundations. For those power plants, we are assembling our heat recovery steam generators, the HRSG, off-site at our Morgan City facility in Louisiana. We have now built and transported five HRSGs to CP2. You can see one of them arriving and on the barge at CP2 in the picture here, which is no small task as they are nine stories tall and each weigh more than 1,500 tons. This is the first time we have built our own HRSGs, which are some of the largest modular HRSGs ever built.

By taking this scope in-house and managed by our internal EPC team, we have removed one of the major bottlenecks in our construction schedule, which should streamline our timeline to first LNG. On page 9, we have our bolt-on expansions at CP2 and Plaquemines. In May, we filed an application with FERC for the expansion of CP2, which would be entirely within the existing CP2 footprint. We were pleased to receive a pre-filing waiver from FERC and have already ordered long lead equipment, such as power modules and liquefaction trains, from our longstanding partners at Baker Hughes. We expect to make a final investment decision on the 10 MTPA expansion in early 2027, with first LNG production at the CP2 expansion in late 2028. For the Plaquemines expansion, you can see the first phase of our bolt-on expansion plans depicted on the slide.

As previously disclosed, we expect the first phase to include eight liquefaction trains producing 6.4 MTPA of LNG. We filed to permit the full 31 MTPA expansion of Plaquemines to be constructed in multiple phases late last year and are targeting FID in the first half of next year, with production from phase one in 2029. To facilitate the expansion of Plaquemines, we expect to build a new pipeline to North Louisiana called Cloud Connector, and once producing from phase one, our runway production across all three projects is expected to be approximately 85 MTPA. As you can see on page 10, we currently have around 53 of this 85 MTPA committed under long and medium-term contracts. Notably, 100% of our nameplate capacity across our first three projects is contracted.

The additional 32 MTPA available for marketing is comprised of excess capacity in the addition of the CP2 and Plaquemines phase one bolt-on expansions. We continue to maintain a portfolio approach and anticipate contracting the majority of this capacity through both a mix of long-term agreements to support new financing and medium-term contracts designed to enhance returns and retain flexibility. To help understand the portfolio approach I just described and the option value it creates for Venture Global, on page 12, we show the frequency distribution of implied liquefaction fees between the emergence of shale gas into the U.S. market from 2010 to today. As you can see, after adjusting for the cost of gas, as well as conservative shipping and logistics costs, the average liquefaction fee would be over $6 per MMBTU.

While that does include several periods of significantly elevated prices, it also includes the COVID-related downturn of 2020, and even adjusting for those, the median fee would still be nearly twice that of a 20-year contract price. Those periods of elevated pricing take place a few times a decade. This substantial spread with asymmetric extrinsic option value highlights the premium available for short- and intermediate-term contracts in the LNG market. We believe our contracting approach and balanced portfolio provide downside production with the ability to monetize our available LNG capacity at long-term rates, establishing a pricing floor. At the same time, our blended portfolio approach provides flexibility to capture materially better returns on medium-term contracts and remain in a position to harvest outsized returns on shorter-dated contracting during periods of cyclical strength.