Q4 2023 Excelerate Energy Inc Earnings Call
Participants
Craig Hicks; Vice President - Investor Relations & ESG; Excelerate Energy Inc
Steven Kobos; President, Chief Executive Officer; Excelerate Energy Inc
Dana Armstrong; Chief Financial Officer, Executive Vice President; Excelerate Energy Inc
Oliver Simpson; Executive Vice President and Chief Commercial Officer; Excelerate Energy Inc
Chris Robertson; Analyst; Deutsche Bank
Bobby Brooks; Analyst; Northland Capital Markets
Eli Justin; Analyst; JPMorgan
Zack Van Everen; Analyst; TPH&Co.
Presentation
Operator
Hello, everyone. My name is Andrew, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Excelerate Energy Fourth Quarter and Full Year 2023 earnings conference call. (Operator Instructions)
I will now turn the call over to Craig Hicks, Vice President, Investor Relations. You may begin your conference.
Craig Hicks
Good morning, everyone. Thank you for joining Excelerate Energy's Fourth Quarter and Full Year 2023 earnings call. Participating on the call today are Steven Kobos, President and Chief Executive Officer; and Dana Armstrong, Executive Vice President and Chief Financial Officer. Also joining the call today is Oliver Simpson, Executive Vice President and Chief Commercial Officer. Our fourth quarter and full year 2023 earnings results. Press release and presentation were released yesterday afternoon and can be found on our website at ir.excelerateenergy.com.
I would like to remind everyone that we will be making forward-looking statements on this call that involve a number of risks and uncertainties. Our actual results may differ materially from those expressed in these forward-looking statements, and we make no obligation to update or revise them.
In today's remarks, we'll also refer to certain non-GAAP financial measures. We've provided a reconciliation to the most directly comparable GAAP financial measures at the back of the presentation.
With that, it is my pleasure to pass the call over to Steven Kobos.
Steven Kobos
Thanks, Craig, and thank you all for joining us on this call this morning. I look forward to our time together in recent months, I've had conversations with many of you on this call or analysts or investors people around the world who believe it Excelerates unique potential as well as some folks who are just new to the Excelerate story. That's a there's a common thread and what we've heard from those discussions, that is there's some questions about our plans to deploy capital to promote growth, the steps we intend to take to drive near-term value creation and I'd say, most importantly, the alignment of our capital allocation plans with our business strategy.
I'd like to take our time this morning to address with all of you those question and provide additional insight into our near term strategy. Look, the most important thing you'll hear me say today is that in 24, Excelerate Energy is moving from strategy. Two action let's get started by talking about who we are as a company and how we plan to grow the business through our corporate strategy. We will emphasized three things. The strengths of our FSRU and terminals business, our expected near-term growth catalysts, and finally, our capital allocation strategy. Excelerate Energy is committed to providing cleaner, more affordable and more reliable energy by delivering LNG and natural gas to hundreds of millions of people around the world. It's not an exaggeration. It's used out there depending upon Excelerate Energy for energy security or simply helping them maintain their quality of life. How do we do that? We do it as a leading provider of flexible LNG infrastructure and integrated solutions. We are a trusted partner for Sovereign and governments and major LNG producers around the world. L&g comes up in discussions on two main subjects by providing energy security in the face of just order around the world. And as a critical tool and decarbonization more than two years since the start of the war in Ukraine. And it seems like we have faced and it was a series of geopolitical crises since then the need for energy security in a world of increasing or persistent disorder has never been more clear Excelerate 's infrastructure and the essential services we provide have likewise, I've never been more valuable. We expect this to continue for decades to come and for Excelerate to remain a critical provider of energy security and an ally for decarbonization. We're going to continue this legacy of strengthening energy security for customers across our global footprint.
As we turn to 24, our focus as an organization is on optimizing our business to provide superior returns to our shareholders. This includes taking several strategic actions to drive near-term value creation.
I would summarize our near-term strategy and divided into three pillars. The first pillar is investing in our core business portfolio of FSRUs and terminals. These generate recurring positive cash flows and they provide financial flexibility for Excelerate to execute our growth plans. We believe investing in our existing asset portfolio will help ensure that our core business continues to operate at high levels of reliability contributes to earnings. Second is comprised of executing on near-term growth catalysts. These near term growth catalysts include investments in downstream natural gas infrastructure, execution of long-term LNG sales and purchase agreements and evaluation of potential equity investments in the LNG import terminals.
Third pillar is maximizing value for shareholders through our capital allocation strategy. We are implementing a $50 million share repurchase program commencing this quarter, and we will continue to return capital to shareholders through our regular quarterly dividend. We are committed to all of you being transparent, and we'll continue to communicate our capital allocation strategy clearly and regularly in the future.
I'd like to take a few minutes to highlight some of the strengths of our core business. Cornerstone of our business model is our core for gasification, FSRU and terminal services business. This generates consistently positive cash flow and affords us financial flexibility as of January 1st of this year, our existing FSRU fleet is fully contracted and it's poised to deliver $315 million to $335 million of adjusted EBITDA in 24. Revenue from this business grew approximately 14% year over year in 23 as compared to 22. Our FSRU contract portfolio of over $4.2 billion of future contracted cash flows, a weighted average remaining term of seven years. We strengthened this portfolio in 23 by adding more than 15 years of contract wins. And over the last two years, 40% of our FSRU fleet has been recontracted at higher day rates, reflective of the increased market value of the asset class. We also plan to grow our fleet through an asset growth plan that includes selective acquisitions and construction of new vessels. Our state-of-the-art newbuild FSRU with Hyundai Heavy Industries is advancing according to schedule, and we look forward to welcoming the vessel to our fleet in June of 26.
I'd like to touch on the safety of our operations, which includes over 700 highly skilled seafarers operating our offshore assets. They are of utmost importance to us. In 23, we achieved a company safety milestone, which I've got to highlight. We had zero injuries that resulted in lost time away from work. We remain dedicated to fostering a robust safety culture, and we take pride in the steps we have taken to strengthen our core business in this area. In short, we've got a great base business with that sub. We believe that our current market valuation does not reflect the fundamental earnings power of the Company Excelerate shares are trading at a price that is substantially below the company's value. We absolutely believe that our shares should be valued at a much higher level given the fair market value of our assets were somewhere in the neighborhood of 47% below the fair market appraised value of our fleet. The high quality of our long-term fixed fee FSRU contracts are neared term capacity for growth. If right now, we're trading below our book value of 1671. This makes no sense. This is why we believe that implementing a share repurchase program at this time is the right thing to do. The $50 million share repurchase program will commence this quarter and has been approved for a two year tenor Now let's turn to our near-term growth catalysts. As we mentioned in our third quarter call, the sustained tightness of the FSRU market is going to create further opportunities for Excelerate Connect LNG downstream customers. And look, we are well positioned to take advantage of this market tightness to optimize our market position. We have defined a comprehensive organic and inorganic growth roadmap with three key priority areas along the value chain on which we're focusing. First area of focus involves evaluating and acquiring equity ownership in LNG regasification terminals that are either existing or under construction. We are now in discussions with several potential partners worldwide that meet Excelerates requirements with value creation as well as compliance. And we are driving to close deals that have the potential to add accretive returns as early as 25 for these transactions.
Our second catalyst for growth is the execution of long-term sale and purchase agreements or SPAs or establishing a diversified energy portfolio to support our long-term SPAs. These contracts provide us with take-or-pay economic uplift, which will enhance returns on our infrastructure. And our third area for growth is focused on strategic investments downstream of natural gas infrastructure. We expect these investments to allow us to secure value-accretive offtake contracts for terminal positions while enhancing the overall value of our LNG supply in infrastructure offerings beyond the committed growth CapEx that we've disclosed as part of our 24 guidance, we have an actionable path to deploy significant growth capital through 26 in support of our growth program we've shared with you before that securing long-term SPAs with our counterparties is an important part of our strategy to support this goal. We've established a diversified LNG supply portfolio, including long-term supply agreements to support our growth strategy.
Over the last year, I want to highlight that we executed three notable SPAs. In February of last year. We signed a 20-year SPA to purchase $0.7 million tonnes per annum of LNG for Venture Global beginning in 27. This is going to meet the demand of our customers that have an appetite for Henry Hub volumes. In November, we signed a 15-year SPH., deliver up to $1 million tonnes per annum of LNG to Petrobank lab beginning in early 26. These volumes are going to flow through our existing FSRUs in Bangladesh. And in January of this year, we signed a 15-year SPA to purchase up to $1 million tonnes of LNG per annum from cutter energy to be delivered on an X ship basis in Bangladesh beginning in early 26.
I want to emphasize that the execution of the Petrobank work and cutter energy SPA.s is value accretive to Excelerate. It highlights our ability to secure critical and affordable LNG volumes for customers, and we do this while enhancing returns on our existing infrastructure with the Petro Bangla and Qatar energy SPAs now in place, we've locked in $15 million to $18 million of guaranteed adjusted EBITDA uplift for 15 years, beginning in January of 26, we cannot express enough the significance of having Calgary energy as a strategic partner. It speaks volumes about how our peers and the industry view Excelerate and we look forward to unlocking further demand in the market where we operate.
But just quickly recap what we've talked about this morning. So Ralph is well positioned to deliver solid future earnings and cash flow growth. We have a healthy balance sheet and a capital allocation strategy focused on investing in growth while returning capital to shareholders through our recently approved share repurchase program and quarterly dividend payments.
With that, I'd like to turn the call over to Dana to walk through our full year and fourth quarter 23 results and our outlook for 24.
Dana Armstrong
Thanks, Stephen, and good morning. We are pleased with Excelerate stellar financial performance for 2023. For the full year 2023, our net income was $127 million, which is an increase of $47 million or up 59% as compared to the prior year. Adjusted EBITDA for 2023 was $347 million, in line with the high end of our guidance range and up $50 million versus last year, an increase of 17%. Our year-over-year results were primarily driven by new charters in Finland and Germany, higher rates on charters in Brazil, Argentina and the UAE, higher direct margin on gas sales and lower operating lease expense due to the acquisition of the FSRU Sequoia early last year, partially offset by dry-dock expenses for the FSRU excellence in the fourth quarter.
For the fourth quarter of 2023, we delivered $20 million of net income and $71 million of adjusted EBITDA. Net income and adjusted EBITDA decreased sequentially from last quarter, primarily due to drydocking expense related to the FSRU excellent spot LNG cargo sales during the third quarter that did not reoccur in the fourth quarter and planned vessel repair and maintenance activities in the fourth quarter as of year-end 2023, our total debt, including finance leases, was $768 million, and we had $556 million in cash and cash equivalents on hand $49 million of letters of credit issued and no outstanding borrowings under our revolver. As part of our capital allocation strategy, we intend to use our balance sheet when appropriate to pay down debt. During the fourth quarter, the Company paid down $68 million of debt, including a $55 million discretionary repayment of debt on its term loan. After this debt repayment. For year-end 2023, we had roughly $212 million of net debt. Also, as of year end, we had roughly $300 million of available borrowing capacity on our revolving credit facility. With our healthy balance sheet and the liquidity provided by our revolving credit facility, we're confident in our ability to fund our growth plans and strategic objectives in the near term.
Now let's turn to our financial guidance for this year. In 2024, we expect to see continued strong performance of our existing FSRU and terminal services contracts in Europe, the Middle East, South America and Asia Pacific. For the full year, we expect adjusted EBITDA to range between $315 million to $335 million dollars. As Steven mentioned, fixed fee revenues from our FSRUs and terminals create an exceptional foundation for sustainable growth as part of our financial plan this year, we expect to see an increase in business development expense as compared to last year as we advance on our commercial growth opportunities that Steven referenced earlier. These business development costs, which are estimated about $20 million are included in our guidance range and will be reported within our selling, general and administrative expenses in our income statement. So included in our full year adjusted EBITDA guidance is the impact of a planned first quarter dry-dock for the FSRU Summit LNG. This vessel is our second FSRU that is under a Build Own Operate transfer.
Our book structure and provide services in Bangladesh because of FSRUs and our boot structure, the related expenses will not be classified as maintenance CapEx, but instead the financial impact of the drydock will be recognized through our income statement in the first quarter of 2024. This is consistent with the impact of the drydock for the FSRU excellence, which underwent drydock services in the fourth quarter of 2023. These are the only two vessels in our fleet that are under a bridge structure. Thus, all our other vessel drydock costs are capitalized as maintenance CapEx. Maintaining a solid presence for our FSRU fleet will require that our teams continue to place a high priority on operational excellence and safety. This year, we will increase our maintenance CapEx spend to enhance the performance of our fleet.
For the full year, we expect maintenance CapEx to range between $50 million and $60 million. The maintenance CapEx spend anticipated for 2024 will ensure our ability to operate our fleet with the consistently high levels of reliability that our customers expect as part of our efforts to increase the transparency and disclosure around our business, we are providing additional guidance on committed growth CapEx, which is defined as capital allocated and committed to specific investments currently in execution for previously approved capital projects for the full year committed growth CapEx is expected to range between $70 million to $80 million. Most of this committed growth CapEx is related to milestone payments on a newbuild FSRU which will be delivered in June 2026. We will continue to provide updates to our committed growth capital estimates as contracts are executed with counterparties that drive incremental capital needs for 2024.
Now let me provide an overview of our share repurchase program. The Board of Directors has authorized a share repurchase program under which the Company may repurchase up to $15 million of outstanding Class A. common stock through February 2026. The share repurchase program underscores the strength of our business and our ability to enhance shareholder returns while preserving financial flexibility on our balance sheet to support our strategic growth initiatives.
In closing in 2024 and beyond, our highly contracted business model will continue to be underpinned by long-term take-or-pay cash flows from our core FSRU and terminal services business. We remain well positioned financially to optimize our core regasification business and to execute on our focused growth strategy we look forward to advancing our plans to create meaningful value for our shareholders.
With that, we'll open up the call for Q&A.
Question and Answer Session
Operator
Chris Robertson, Deutsche Bank.
Chris Robertson
Hi, good morning. Thanks for taking our questions. This has been more on for Chris Robertson here at Deutsche Bank on capital returns, can you please discuss why the Company decided to institute your share repurchase program as opposed to just having more cash available as dry powder to pursue growth opportunities. Will this hurt the free float?
Steven Kobos
Thanks for joining us. Appreciate the time. Touch on a couple of good points. It first thing quite quite sure repo. Now I think I touched on it in the remarks. It's really driven by the share price. It's a great investment. We think it's a great opportunity. And no, we think we're sitting in such a good position in terms of do we have sufficient dry powder to go after the targets in front of us? We absolutely do. If we if we thought we were indicating that in any way, we would not have done this, but we think we can do both and and we think this is the most prudent way to return capital to shareholders right now because of the share price moving forward. Obviously, we continue to look and evaluate our dividend, but first and foremost, in our mind is the ability to pursue growth. And I does that answer your question or I think.
Chris Robertson
Yes, it does. Maybe as a follow-up, and looking at the current LNG and downstream power landscape, where do you think the global market is in terms of short term versus longer term infrastructure investment opportunity contracts?
Steven Kobos
Okay. I mean, obviously, we're quite bullish long stream long term into downstream opportunities.
In terms of power, we are interested in our assets. I mean, it's early days for us there. I think I pointed out some of the areas that we're focused on in the near term, no, the nearer term targets, it's a mix of LNG import terminals, either existing or under developments and downstream natural gas infrastructure and also vessels of course. So I think probably within your question is also where we think folks are going in terms of purchasing LNG. And so we think on that, that there's continued and increasing demand for long-term folks moving for the affordability and predictability of long-term LNG, which matches nicely with their need for the downstream infrastructure. So we think the purchasing pattern in the global south and elsewhere, it shows the continued viability of this downstream asset class.
Chris Robertson
Okay, great. Thanks for all the help out and I'll maybe come back for additional questions if there's room.
Operator
Bobby Brooks, Northland Capital Markets.
Bobby Brooks
Hey, good morning, guys. Thank you for taking my question. So the cutter energy and petro Bangla deals were a great example of how you guys can uplifts uplift your EBITDA through existing assets. But I also understand the dynamics and you're going to procure LNG in the manner that customers want. And that's not always necessarily through long term contracts.
So my question is of your current customer base, how many of them do you feel would be interested in similar deals today, Cutter energy or I should say more so say, the petrol Bangla deal that you guys did? And then maybe if you could size how much demand in terms of maybe in terms of and PTA those customers would be looking to secure, like I know like I would assume the amount, say Bangladesh wants would vary from what Finland might one, I think just based upon those relative populations.
Steven Kobos
You're absolutely right, Bobby, I'll probably hand this over to my colleague, Oliver Simpson. I will say, first and foremost, the thing that's a great proof point about Bangladesh is that's just an infrastructure contract we have. And even though we only have an infrastructure in Bangladesh, it didn't stop us from being engaged with the customer figuring out what their need was. Their need was to rapidly increase the amount of long-term have priced favorably part priced LNG that they need it. We made an upgrade, enhance the send-out capacity of our existing infrastructure and as a consequence, we were able to secure that. So I think I would say just looking at all the markets, I'll start first with our existing markets, we're always going to be engaged and seeing what the customer needs. And in past, we've talked about how some markets are far more variable in their needs. Some are seasonal, but we're always going to be attuned to what what they need. But Oliver, you want to speak to how we see the markets just focused on a particular market outside of that rest of the world?
Oliver Simpson
Yes, sure thing. Thanks, Stephen. Thanks for weeks. Yes, I think first, just on the ATM on the Qatar energy, Petro Bangla. I mean, we're extremely proud of that relationship. As Steve mentioned, I think today it could. So maybe 10% of its annual production is regasified through Excelerates FSRUs globally. So I think this new relationship with them showcases our ability to deliver these incremental returns on our infrastructure, but also our ability to work with these top producers. I mean, I think if you look at those volumes and the $1 million tonnes is about 20% of the re-gas capacity of an FSRU in Bangladesh. So we're talking 10%, to 15% of bank debt as demand. So I think that shows when we take that to other markets, that a million tonnes is a very it's very modest amounts in any of the markets that we work. So I think we will keep looking for opportunities of those size and some of the new markets that, as Steve mentioned, different markets will have different needs. And we're focused on delivering to the customers what they want in terms of LNG supply to meet their needs and ensure they have the right products.
Bobby Brooks
Got it. Thank you. And then also I understand that on the inorganic M&A opportunities, you it's you guys can't you can't really frame that until the deal is signed, but I think it might be beneficial to talk about some key lessons learned in 2023 in pursuit of that inorganic M&A? And maybe more specifically, could you give any examples of M&A opportunities you ultimately passed on and what what drove that decision to step away from it?
Steven Kobos
And to thank you, Bobby, for inviting us to open up a post mortem seminar here. Now we've got everything is dependent upon the market. We're looking at what we think about the fundamental demand. We often talk about the fact that invest in projects we like to invest in markets. We care about the fundamental demand and need for energy in a particular market, whether it's the demand for energy security for the demand for energy, we want to know that there is a solid business case of driving that demand. And then we'll look at what we expect. We've said before, we're looking for in a mid 10s unlevered after-tax returns on a lot of those sorts of projects. So we're looking at we're looking at our hurdle rates and in different markets. These are big opportunities. Obviously, you're talking about CapEx, it can vary. I would say they average $200 million to 400 million in terms of opportunity size. But if you're going to if you're going to pass on anything and I'm not going to speak to that. I think we have a track record of doing great due diligence out there in the world, evaluating the need for energy and a particular market that drives a successful project over many years and then making sure that that is going to meet our hurdle rates that we're comfortable with our governance. So it's a host of things. But I do think we've got a good track record. And for SRI, we have rigor in this process.
Bobby Brooks
Yes, I would definitely agree with that. In terms of the solid track record that you guys have built on? And then I guess just last question would be, I think Dana mentioned you'll use the balance sheet to pay down debt when appropriate. You guys made that extra $50 million payment towards debt in the fourth quarter. So I was just wondering maybe what triggers made it appropriate to pay down more debt in the fourth quarter last year?
Dana Armstrong
Bobby? Yes, thanks for the question. So as we went into the fourth quarter of last year, we did quite a bit of analysis on our cash flow and our ongoing projections and our CapEx needs and so on. And as we looked at where we finished the year and as you can see from our balance sheet. We finished the year with very healthy amount of cash. We felt comfortable that we had enough excess cash to continue to move forward with this. These growth programs as well as the share repurchase program and pay down some debt. We made a decision to pay back roughly $55 million, that's about 7%. So that will save us roughly $4 million a year. And we felt like that was a good use of cash based on where we are right now with our balance sheet. So we'll continue to evaluate it as we look at our growth needs going forward and make those decisions on a case-by-case basis.
Bobby Brooks
I really appreciate the color and I'll return to the queue. Thank you, guys.
Operator
Eli Justin, JPMorgan.
Eli Justin
Hey, good morning, everyone. On the show going to circle back on the share repurchase program. So I know you highlighted a 1Q 24 commencement. Are you able to confirm, has there been any repurchases yet to date and then kind of just how do you see the cadence of those playing out through the year? Thanks.
Dana Armstrong
Well, so Thanks, Eli. And we actually haven't opened that. We're still in a quiet period. So obviously, as we release earnings today and will exit our quiet period, we intend to start those very early next week. So we have not actually started yet as far as the cadence, we fully intend to even though we announced that over a two year program, we expect that to be and likely will be complete and be ahead of that two-year program. And that's because, you know, just based on where our stock is today and the fact that we're so undervalued based on the parameters that we've set with the banks, we feel very comfortable that we'll be able to get that done within a year.
Eli Justin
Got it. That's That's great color. Appreciate it. And then maybe just and if we could pivot back to some of the portfolio additions you guys have referenced in the forward-looking CapEx guide. So beyond the new build coming on in 2026, what are the puts and takes for the kind of build versus buy strategy in your view and on, can you just remind us how you kind of compare economics between those two strategies?
Steven Kobos
Sure. If I mean, the bulk of the committed CapEx, as Dana mentioned, is for a tranche on the R&D and new building with Hyundai Heavy Industries. As we mentioned on the call, we're going to continue to evaluate opportunities to expand the fleet as part of the strategy. We feel very strongly that there is a market tightness in this asset class. We continue to see that we think it's one of the limiting factors and projects and the ability to move forward with us. We will continue to be evaluating an acquisition or new building of outside the fleet.
In terms of it's the question, giving us to organic or inorganic development of some of the opportunities we've discussed. It's just a both. And obviously, we want to look to the inorganic opportunities, like because we're interested in accelerating earnings and 25 and 26, no doubt about it. So that is one of the key drivers on that plus not every market is the same. Some are better suited for organic development. Some are better suited for buying something that's further along. So it's horses for courses. We're going to keep evaluating those. But we have very definite our return expectations and hurdle rates we have to meet. And whether we get there through an organic or inorganic basis, we have our expectations, which we fully intend to meet and anything we're going to execute on is going to be accretive for the Company and for our shareholders.
Bobby Brooks
Got it. I appreciate all that color. Thanks again.
Operator
Zack Van Everen, TPH.
Zack Van Everen
Hey, guys. Thanks for taking my question. Just to start on the EBITDA guidance, could you touch on what would get you to the low end versus high end with how contracted you are? Is there still some marketing opportunities baked in or gas sales in there as well.
Steven Kobos
Dana and I can speak to that. I mean in terms of well, first of all, good morning, Zach, sorry, good morning. Yes, good morning. In terms of what could push it down, I mean, I think that would probably be more likely than anything, an increase in and development expense spends as we get further traction than we might expect on some opportunities, that would be one driver. But what would you add to that?
Dana Armstrong
What I will say is that we feel very confident about that range. And, you know, there's not a lot of upside. There's not a lot of downside and the upside obviously would be equity like August, but as you know, all of that, our merchant vessels on contract, so we don't expect to blow out this range. We expect to come in within this guidance if we are successful in doing it several cargoes like we did last year, then that could obviously drive it up. So there's definitely that possibility. As David said, there's a possibility that we invest more in business development that could potentially drive it down, but we don't expect it to go beyond that three of 15. So we we do feel very good about the 30 15 to 30 35 range. But to add to your point with all of our vessels on long-term contracts, that does give us really good visibility into 2020 financial results like we're going to be within this range this year.
Zack Van Everen
Got you. And then maybe just one more on the international market and the obviously the news with the DOE. here in the U.S. When you guys look at future SPAs, you have signed some in the U.S. and obviously international as well. Are you leaning more towards SPAs internationally as the U.S. kind of works through it regulatory environment? Or is there really a preference there?
Steven Kobos
So I think, Zach, we are first I'd say we're pleased with the suppliers that we have agreements with currently that's Venture Global, that's cutter energy and very happy with both the steels. And there's definitely interest from some parties for Henry Hub indexed long-term deals. We like the US same time you just saw just in the past few days, a cutter energy announce an additional $16 million tonnes coming up. That's going to take their total up to one 44. This just means there is a continuing demand for increasing demand for LNG around the world. Other producers will step up. If the U.S. doesn't. We're somewhat agnostic, we hope there will be further U.S. production. And we think it's in the best interest of the US and a harmonious global system that people can afford to add this product and access it widely, you've seen some nations increased significantly their targets for natural gas in recent weeks as part of their mix. That's usually to the disadvantage of coal. So we're in favor of that and think it's great for the U.S. or any other market to increase its LNG production.
Zack Van Everen
That's all I had. Appreciate the time.
Operator
(Operator Instructions) Chris Robertson, Deutsche Bank.
Chris Robertson
Hi. Yes, thanks for taking our follow-up. This has been more again for Chris Robertson I'm looking at the BSPA. for cutter energy and a sales agreement with Petro Bangla for the volumes you discussed. Can you talk a bit about how these contracts are structured, have you locked in a particular margin based on your purchase price of LNG volumes plus the cost of trend or and we get perfect. Thanks for that, Ben, I'm going to throw that one back over to Oliver Simpson, who will answer it without going into too much detail.
Oliver Simpson
Thanks. I think on that one, I mean, I think we have we entered into a long-term agreement with Petrobank that to sell energy in Bangladesh and and backfilled it with ADM long term. The supply agreement from from Qatar So so on that in terms of volume and delivery location, it is pretty much the city contracts are aligned and we have a fixed margin in between the two. So I think the fairly fairly de-risked contracts and assets.
Steven Kobos
And that's in line with what we've said philosophically about commodities for some time and the fact we're looking for coal InfraStruXure uplift.
Chris Robertson
Wonderful That's my one. Thank you so much.
Operator
Yes, that concludes the Q&A portion of today's call. I will now turn the session back over to Craig Hicks for final comments.
Steven Kobos
This is Steven Kobos. Thank you again to everyone who joined on today's call. As you heard this morning, we delivered strong full year results in 23, and we are optimistic about our plans to maximize shareholder value. We take pride in being one of the world's premier providers of flexible LNG infrastructure and a preferred partner for countries seeking to stabilize their energy systems.
Before closing this earnings call, I would like to reinforce our commitment to our investors to be extremely transparent regarding our action oriented growth strategy based on our highly ratable take-or-pay FSRU base business and the growth catalysts we've talked about and our capital allocation strategy. I look forward to providing you with additional progress updates in the coming months. Thank you all for your time this morning.
Operator
That concludes today's Excelerate Energy Fourth Quarter and Full Year 2023 earnings conference call. You may now disconnect your line.
