New Era Energy & Digital, Inc. Common Stock 2026 Q2 Earnings Call

Please go ahead. Thank you, operator, and good afternoon.

My name is Lincoln Tan, Investor Relations for New Era. Thank you for joining New Era's second quarter business update call. Joining me today are Charlie Nelson, Chairman and CEO, Ted Warner, President and CFO, José Rodriguez, COO, and Evan Pierce, Chief Development Officer. Before we begin, I would like to remind everyone that today's call is being recorded and will be available on the investor relations section of our website. Please note that during the course of this call, we may make forward-looking statements. These statements reflect our current views and expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. Please refer to slide 2 of the accompanying presentation and our SEC filing, including our Form 10-Q filed on Friday for more information.

With that, I will now turn the call over to Charlie Nelson.

Thanks, Lincoln. Thanks everyone for making the time. I want to start with the headline because I think it is a simple one this quarter. Our focus has been on the parts of this project where the outcome sits with us rather than with the counterparty. That means permitting, land, and site works. This quarter, we delivered on those. We now have our construction permits in hand, and we believe that that meaningfully reduces the development risk at the site. We expect to begin site grading in the coming weeks. Our phase 2 power partner has also filed a standard air permit supporting approximately 550 megawatts. This takes TCDC phases 1 and 2 together to roughly 757 megawatts of gross capacity. On the commercial side, end tenant negotiations in the joint venture with Stream continue to advance, along with phase 1 power arrangements.

The one I would highlight today is power. In early July, we were given the opportunity to step in and negotiate a PPA in our own name, and we are currently finalizing that PPA after a period of negotiation. On the balance sheet, we finished the quarter with $84.8 million of cash, and we have $270 million undrawn in the Macquarie facility. This more than covers our expected TCDC phase one equity contribution, and Ted can cover this more in detail later. There's the team, which I want to spend a minute on because I think it's the one thing that's changed the most about this company in the last quarter. When you look at this page, what I'd ask you to notice isn't the number of names, it's where they've come from.

First, we have José Rodriguez, our Chief Operating Officer, who has run data center engineering and critical environment operations at Microsoft, AWS, and TikTok. Earlier in his career, he led engineering teams across gas turbine and nuclear power at GE and Tennessee Valley Authority. He's built and operated the kind of facility that we're building. Then we have Evan Pierce, who joined as Chief Development Officer in June. 20 years in hyperscale data centers and energy infrastructure, most recently running site and energy development for the Americas at EdgeConneX. He also comes from AWS and TikTok as well. He's helped us plan and deliver more than 5 gigawatts of capacity. We've got Michael Johnson, who joined at the same time as Evan, and he joined as General Counsel and Chief Compliance Officer. He's got 30 years of legal and commercial work under his belt, and it's in this asset class.

Most recently, he was at CoreWeave, and before that Switch, covering leasing, powered land acquisition, and construction contracting. Ted Warner, you know. Ted took on the expanded role of President and Chief Financial Officer in June and recently joined our board. We've got Darin Rovell, who's our Chief Accounting Officer, and Andy Casazza is our Chief Corporate Officer. Finally, Will Gray, who founded this business, as you know, and took it from an idea to a listed company and is now the President of the Permian, where his relationships with landowners, operators, and the local community here are invaluable. Beyond our C-suite hires, we've also expanded capability across management, and that includes the additions of James Sheppard, our VP of site selection, and Morgan O'Connor, our VP of construction.

James joins us from HDR, a global engineering firm in the data center space, and Morgan joins us from AWS, where she was the Senior Manager of construction. A project like TCDC is won or lost on execution, and you need people who have done it before. Six months ago, we were a company with a very good site. Today, we're a company with a very good site and a team that's built this before. I'll say plainly, it's a privilege to lead them. Turning to the next page, I want to address the Texas backdrop entirely. Governor Abbott has recently issued a directive calling for stronger oversight of data center development in Texas. More transparency on power and water requirements, on infrastructure costs, on ownership, and on community impact.

The principle behind this is that large field development should bring additional energy to Texas rather than push costs and burden onto Texans. We put out a release this week supporting it. I'd like to make the point plainly. We're not supporting this because we've been asked to. TCDC and our entire business was designed this way from the start. On power, our strategy is built around dedicated generation, including behind-the-meter. We are not competing for constrained grid capacity. We're supplementing Texas power, not drawing it away from anyone. On water, the design prioritizes closed-loop liquid cooling and reclaimed water, and we're evaluating independent and wastewater solutions to keep produced water in productive use. In the Permian, that matters.

On community, we've got jobs, training, local programs, and community impact programs. Evan can cover this more in detail. On transparency, we're committed to engaging openly as the state's process move forwards. We think clearer and higher standards are good for the industry, and frankly good for us, because we're already building to them. Finally, one related point, phases one and two are islanded and behind-the-meter, so they are not dependent on ERCOT Batch Zero processes. The broader point here is that behind-the-meter designs answer the concerns behind Governor Abbott's directive structurally, rather than through mitigation. That was a design choice made long before this directive, and it is increasingly what large customers are looking at. With that, I'll hand it over to José to take you through the power positions across phases one and two.

Thanks, Charlie. Our flagship TCDC site is situated on 492 acres of owned land outside Odessa in Ector County. That puts us in the middle of the Permian Basin energy corridor. We sit adjacent to generation assets operated by Vistra and Calpine, with access to existing energy, water, and fiber infrastructure. We have a phased development plan that scales towards 1.4 gigawatts over time. The important word there is phased. We are not trying to build 1.4 gigawatts at once, and we're not funding it that way either. Power is the constraint of this industry right now. So let me be specific about how we structure ours across phases one and two. Phase one is 207 megawatts. Power comes from existing generation adjacent to the campus, islanded and behind-the-meter gas.

What that means practically: no ERCOT interconnection required and no air permit required for phase one, because there is no onsite generation. We are not standing in an interconnection queue for power. That is the single biggest reason we can move on the timeline we're talking about. What has changed this quarter is that we're working on finalizing the phase one PPA in New Era's own name. Structuring in our name provides a direct path to power land and further de-risks the project. Phase two adds approximately 550 megawatts, up from the 450 megawatts previously contemplated. The increase reflects different generation equipment and more effective emission controls, which lowers emissions per megawatt and allow more capacity within the same emission ceiling. That's behind-the-meter gas again, this time on the TCDC site, with physically diverse gas supplies across three pipelines.

We have partnered with Thunderhead Energy Solutions to deliver this power solution. A subsidiary of Thunderhead has filed for the standard air permit applications with the TCEQ. Turbines are on order through TURBINE-X. Taken together, that is approximately 757 megawatts of gross capacity across phases one and two, against the roughly 650 megawatts previously contemplated. The campus remains master-planned to scale towards 1.4 gigawatts over time. With that, I will hand over to Evan to take you through what actually moved on the ground this quarter.