Montauk Renewables Inc

DEF 14A 1 d675192ddef14a.htm DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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A Message from our Board of Directors

April 22, 2024

DEAR FELLOW STOCKHOLDERS,

We are pleased to invite you to the Montauk Renewables, Inc. Annual Meeting of Stockholders at 9:00** a.m. **(Eastern Daylight Time) on June 5, 2024. This year’s annual meeting will once again be held virtually, via live webcast.

In 2023, we announced a series of development projects we expect will materially contribute to our multifaceted growth strategy. In December 2023, we finalized a contract for the delivery of biogenic carbon dioxide from four of our Texas facilities to a North American subsidiary of European Energy. We also announced our planned entrance into South Carolina through the development of a new landfillgas-to-RNG facility, an opportunity Montauk won through a competitive bidding process. We will also be developing a landfillgas-to-RNG project at the Frank R. Bowerman Landfill, which is expected to process the large and growing volumes of biogas in excess of existing capacity at our Renewable Energy Generation facility on the landfill.

With respect to our ongoing development projects, at our Pico dairy cluster project, our dairy host delivered two of three feedstock increases and informed us that they expect to deliver the final increase in 2025. The California Air Resource Board approved our provisional Carbon Intensity Score application with a CI score of-261.56. We released the remaining gas from storage and recognized both Renewable Identification Number (“RIN”) and Low Carbon Fuel Standard (“LCFS”) credit revenues. We successfully commissioned the first of two new digesters as well as our new reception pit, both of which became operational during the third quarter of 2023. At our North Carolina swine-waste to energy development, we completed the relocation of our existing reactor to our Turkey facility and executed a receipt interconnection agreement with Piedmont Natural Gas. We also signed a Renewable Energy Certificate (“REC”) agreement with Duke Energy, under which Duke Energy will purchase the swine waste RECs from the conversion of swine waste feedstock into renewable energy. We expect the first of our eight processing lines to be operational in the second quarter of 2024 and plan for a rolling commissioning schedule beginning in the second half of 2024 through the second half of 2025 with revenues beginning in 2025. During 2022, we announced our plans to construct a second renewable natural gas (“RNG”) processing facility at the Apex landfill and currently expect commercial operations during the fourth quarter of 2024. Finally, earlier this year, we reached an agreement with one of our landfill hosts to sell back our gas rights in advance of expiration impacting one of our smaller Renewable Electric Generation operating facilities. The strategic decision to exit this facility was influenced by amid-2024 expiration of an above-market Power Purchase Agreement, the elimination of decommissioning, asset removal or site restoration obligations, the sale proceeds of $1 million dollars being well in excess of the carrying value of the project and the offer to extend our gas rights at two of our existing RNG operating facilities, Atascocita and Costal Plains, for an additional five years.

With respect to our financial performance in 2023, while we had flat production volumes as compared to 2022, our sales of RINs from RNG increased approximately 2.5% to 44.9 million RINs sold in 2023. However, lower prices of both the average realized price of RINs sold and natural gas resulted in lower revenues in 2023. These 2023 price driven reductions to revenues of approximately $30.7 million were offset through our tiered royalty structure reducing royalty expense in 2023 by approximately $9.3 million, which led to our $20.9 million reduction in 2023 operating income. Net income in 2023 was $14.9 million, a decrease of $20.3 million compared to $35.2 million in 2022.

With over 30 years of industry experience and a committed employee base, we are well positioned to succeed in the dynamic environment and are excited to enter what we consider to be the next phase of strategic growth of Montauk in 2024. On behalf of the Board of Directors, thank you for your continued investment in Montauk Renewables and our unwavering mission to bring commercial-scale renewable energy to market.

Sincerely,

John A. Copelyn

Chairman of the Board

Sean F. McClain

President and Chief Executive Officer

5313 Campbells Run Road, Suite 200

Pittsburgh, Pennsylvania 15205

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

The Annual Meeting of Stockholders (the “Annual Meeting”) will be held to consider and act upon the following matters:

The Annual Meeting will be held virtually, via live webcast at www.virtualshareholdermeeting.com/MNTK2024 on Wednesday, June 5, 2024 at 9:00** **a.m., Eastern Daylight Time. We believe hosting a virtual meeting enables participation by more of our stockholders, while lowering the cost of conducting the meeting. We encourage you to attend virtually.

Stockholders also will be asked to consider such other business as may properly come before the Annual Meeting. The Board of Directors has fixed Friday, April 12, 2024, as the record date (the “Record Date”). Only stockholders of record at the close of business on the Record Date are entitled to notice of, and to vote at, the Annual Meeting.

How to Vote

We are utilizing the U.S. Securities and Exchange Commission (the “SEC”) rule that allows companies to furnish proxy materials over the Internet rather than in paper form. On or about April 22, 2024, we will release our proxy materials, including the Notice of Internet Availability of Proxy Materials for the Annual Meeting (the “Notice”), to our stockholders. We believe that this delivery process reduces our environmental impact, and over time, lowers the cost of printing and distribution of proxy materials. We believe that we can achieve these benefits with no impact on our stockholders’ timely access to this important information. If you have received a Notice, and you would prefer to receive proxy materials (including a proxy card) in printed form by mail or electronically by email, please follow the instructions contained in the Notice.

You are not required to attend the Annual Meeting to vote your shares.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on June 5, 2024, at 9:00 a.m., Eastern Daylight Time. The proxy statement, annual report and related materials are available free of charge at***www.ProxyVote.com for stockholders whose shares are included in the United States section of the Company’s register of stockholders andwww.materials.ProxyVote.com/61218C ***for stockholders whose shares are included in the South African section of the Company’s register.

By Order of the Board of Directors

John Ciroli

Chief Legal Officer and Secretary

Pittsburgh, PA

April 22, 2024