AleAnna, Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (“SEC”) on March 31, 2025.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (“SEC”) on March 31, 2025.

Previous wording

AleAnna is a natural gas resource developer focused on delivering critical natural gas supplies to Europe through both onshore conventional natural gas exploration and renewable natural gas development in Italy. We have several conventional natural gas discoveries including the Longanesi field, located in the Po Valley in Northern Italy, which is one of Italy’s largest modern gas discoveries. We retain a 33.5% working interest in the Longanesi field with our working interest partner, and operator, Padana. We acquired our working interest in the Longanesi field through a 2016 transaction with Enel. We also retain wholly owned concessions, permits, and pending applications on other exploration and development prospects across Italy which are supported by proprietary modern 3D seismic imaging. In 2021, we launched a renewable natural gas development business focused on bringing to market carbon-negative renewable natural gas derived from animal and agricultural waste.

Current wording

AleAnna is a natural gas resource developer focused on delivering critical natural gas supplies to Europe through both onshore conventional natural gas exploration and renewable natural gas development in Italy. We have several conventional natural gas discoveries including the Longanesi field, located in the Po Valley in Northern Italy, which is one of Italy’s largest modern gas discoveries. We retain a 33.5% working interest in the Longanesi field with our working interest partner, and operator, Padana. We acquired our working interest in the Longanesi field through a 2016 transaction with Enel. We also retain wholly owned concessions, permits, and pending applications on other exploration and development prospects across Italy which are supported by proprietary modern 3D seismic imaging.

Previous wording

As of March 31, 2025, although we had generated revenue from electricity sales from two renewable natural gas assets, we had not yet recognized any revenue from our conventional natural gas business. Our recent activities involve the drilling and testing of three Longanesi development wells (during 2022 and 2023) as well as the re-completion of two original discovery wells. We had no drilling activity during the three months ended March 31, 2025 or the year ended December 31, 2024. We had no other exploratory or development drilling during the three months ended March 31, 2025 or the year ended December 31, 2024. Our Longanesi, Trava and Gradizza discoveries were classified by DeGolyer and MacNaughton as proved undeveloped reserves as such wells had not yet started production as of December 31, 2024 and require future investments to install production facilities prior to being fully completed and producible.

Current wording

Our recent drilling and exploration activities involve the drilling and testing of three Longanesi development wells (during 2022 and 2023) as well as the re-completion of two original discovery wells. We had no drilling activity during the three and six months ended June 30, 2025 or 2024. We had no other exploratory or development drilling during three and six months ended June 30, 2025 or 2024. Our Longanesi, Trava and Gradizza wells were classified by DeGolyer as proved undeveloped reserves as such wells had not yet started production as of December 31, 2024 and require future investments to install production facilities prior to being fully completed and producible. However, as noted in the “Recent Developments” section below, we achieved first production from the Longanesi field in 2025.

Previous wording

In connection with Longanesi start-up, AleAnna will be required to reserve $3.1 million related to the contingent consideration liability due to Enel via a bank guarantee. Any cash deposits required to secure this bank guarantee will be classified as restricted cash in future balance sheets and may be used to satisfy the contingent consideration liability as payments become due.

Current wording

In connection with the Longanesi start-up in May 2025, AleAnna issued a $3.1 million bank guarantee to secure its contingent consideration obligation to Enel. The guarantee required $1.2 million in cash collateral, which was classified as restricted cash as of June 30, 2025. The collateral may be used to satisfy the contingent consideration liability as payments become due.

Previous wording

On October 29, 2024, we entered into a gas sale agreement (“GSA”) with Shell Energy Europe Limited (“SEEL”), whereby SEEL became the exclusive buyer of our share of the natural gas produced from the Longanesi field net of (i) any consumption and/or losses incurred in the transport, treatment and compression of gas before delivery; (ii) any volume to be allocated for regulated royalties auctions, if applicable; and (iii) any other volume contractually allocated to other parties before August 31, 2022. Future sales under the GSA are contingent upon the commencement of gas production.

Current wording

On October 29, 2024, we entered into a gas sale agreement (“GSA”) with Shell Energy Europe Limited (“SEEL”), under which SEEL became the exclusive buyer of our share of the natural gas produced from the Longanesi field net of (i) any consumption and/or losses incurred in the transport, treatment and compression of gas before delivery; (ii) any volume to be allocated for regulated royalties auctions, if applicable; and (iii) any other volume contractually allocated to other parties before August 31, 2022.

Previous wording

We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including competition from other carbon-based and non-carbon-based fuel producers, regulatory hurdles posed by the Italian government, and other factors discussed under the section titled “Risk Factors”in our Annual Report on Form 10-K for the year ended December 31, 2024. We believe the factors described below are key to our success.

Current wording

We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including competition from other carbon-based and non-carbon-based fuel producers, regulatory hurdles posed by the Italian government, and other factors. We believe the factors described below are key to our success.

Previous wording

As previously discussed, we and Padana achieved first production of the five wells in the Longanesi field in March 2025 through use of a temporary processing facility. The permanent processing facility is expected to be constructed over the remainder of 2025 and early 2026 and commissioned mid-2026.

Current wording

As previously discussed, we and Padana achieved first production of the five wells in the Longanesi field in March 2025 through use of a temporary processing facility. The permanent processing facility is expected to be constructed over the remainder of 2025 and 2026.

Previous wording

We believe our achieving first production of the Longanesi field is a key milestone that will fuel our potential growth. We also have potentially viable discoveries in our Gradizza and Trava fields that are expected to achieve first production in the future.

Current wording

We believe our achieving first production of the Longanesi field was a key milestone that will fuel our potential growth. We also have potentially viable discoveries in our Gradizza and Trava fields that are expected to achieve first production in the future.

Previous wording

Commencing and Expanding Renewable Natural Gas Operations

Current wording

Expanding Renewable Natural Gas Operations

Previous wording

In 2021, we launched a renewable natural gas development business focused on bringing to market carbon negative renewable natural gas derived from animal and agricultural waste. The first three renewable natural gas assets were purchased between March 2024 and July 2024, with additional renewable natural gas projects expected to be purchased in the future.

Current wording

In 2021, we launched a renewable natural gas development business focused on bringing to market carbon negative renewable natural gas derived from animal and agricultural waste. As previously discussed, the first three renewable natural gas assets were purchased between March 2024 and July 2024, with additional renewable natural gas projects expected to be purchased in the future.

Previous wording

During the three months ended March 31, 2025, we generated approximately $0.6 million of revenue from electricity sales at two renewable natural gas assets acquired in July 2024 (the “Casalino” and “Campopiano” plants). The plant assets are fully permitted for production of electricity through conversion of crop and animal waste bio feedstocks. The plant assets are currently biomethane to electricity conversion assets. It is our intention to begin upgrading the sites to refine biomethane into renewable natural gas through upgrading units. Following the upgrade process to transition the assets to biomethane to renewable natural gas conversion, we expect to sell renewable natural gas to customer(s) by trucking or piping the renewable natural gas to the interstate pipeline system (SNAM). Until the plant assets are upgraded, we will actively source bio feedstocks for the assets to produce biomethane which will be processed through reciprocating generators in order to generate electricity. The electricity is then sold onto the grid through a metered interconnection. Casalino and Campopiano derive revenues from the sale of such electricity to the local state-owned electrical utility (Gestore dei Servizi Energetici SpA or “GSE”). Energy generation revenue is recognized as the electricity generated by the Casalino and Campopiano assets is delivered to GSE. Revenues are based on actual output and “on-the-spot” predetermined prices for small renewable energy producers.

Current wording

During the three and six months ended June 30, 2025, we generated approximately $0.7 million and $1.4 million, respectively, of revenue from electricity sales at two renewable natural gas assets acquired in July 2024 (the “Casalino” and “Campopiano” plants). The plant assets are fully permitted for production of electricity through conversion of crop and animal waste bio feedstocks. The plant assets are currently biomethane to electricity conversion assets. It is our intention to begin upgrading the sites to refine biomethane into renewable natural gas through upgrading units. Following the upgrade process to transition the assets to biomethane to renewable natural gas conversion, we expect to sell renewable natural gas to customer(s) by trucking or piping the renewable natural gas to the interstate pipeline system (SNAM). Until the plant assets are upgraded, we will actively source bio feedstocks for the assets in order to produce biomethane which will be processed through reciprocating generators in order to generate electricity which is then sold onto the grid through a metered interconnection. Casalino and Campopiano derive revenues from the sale of such electricity to the local state-owned electrical utility (Gestore dei Servizi Energetici SpA or “GSE”). Energy generation revenue is recognized as the electricity generated by the Casalino and Campopiano assets is delivered to GSE. Revenues are based on actual output and “on-the-spot” predetermined prices for small renewable energy producers.

Previous wording

AleAnna’s income tax consequences have been reflected in its consolidated financial statements in accordance with ASC 740,Income Taxes. Given AleAnna’s history of losses, and because future production remains uncertain, a full valuation allowance was applied against deferred tax assets and no income tax liabilities or expenses were recognized as of or for the three months ended March 31, 2025 and 2024.

Current wording

AleAnna’s income tax consequences have been reflected in its consolidated financial statements in accordance with ASC 740,Income Taxes. Despite the start of Longanesi production, given AleAnna’s history of losses, and because future production remains uncertain, a full valuation allowance was applied against deferred tax assets as of June 30, 2025 and 2024.

Previous wording

We are also subject to a Valued-Added Tax (“VAT”) which is a broadly-based consumption tax that is assessed to the value that is added to goods and services. The VAT applies to nearly all goods and services that are bought and sold within the EU. Italian law allows for certain VAT payments to be recovered through ongoing applications for refunds. We have incurred higher VAT input paid (i.e., VAT paid on purchases) than the VAT output collected (i.e., VAT collected on sales), resulting in a net VAT refund receivable. As of March 31, 2025 and December 31, 2024, we had VAT receivables of $6.6 million, and $6.8 million, respectively.

Current wording

We are also subject to a Valued-Added Tax (“VAT”), a broadly-based consumption tax assessed on the value added to goods and services. VAT generally applies to most goods and services bought and sold within the EU. In certain cases, including cross-border sales to business customers and sales of biogas within Italy, we are not required to collect VAT on revenues. To date, we have incurred higher VAT on purchases (input VAT) than we have collected on sales (output VAT), resulting in a net VAT refund receivable. As of June 30, 2025 and December 31, 2024, we had VAT receivables of $8.4 million, and $6.8 million, respectively. Under Italian tax law, VAT receivables may be used to offset other tax liabilities, including payroll taxes, income taxes, and other taxes payable to the Italian government.

Previous wording

Our net losses were $3.3 million and $114.3 million for the three months ended March 31, 2025 and 2024 respectively. As of March 31, 2025 and December 31, 2024, we had an accumulated deficit of $193.1 million and $191.0 million, respectively. The majority of these losses stem from costs associated with the Longanesi field drilling and development, including asset impairments from previous years, as well as seismic imaging, exploratory costs for other conventional natural gas prospects, and general and administrative expenses. The net loss for the three months ended March 31, 2024 and the accumulated deficits also include historical deemed dividends to the redemption value of AleAnna Energy’s previous Class 1 Preferred Units (exchanged for Class A and Class C common stock in connection with the Business Combination) based on the redemption features of those units and the related accounting requirements.See“Note 10 — Equity” to the condensed consolidated financial statements for further details. We expect to continue to incur substantial expenses related to our operations, exploration, and development activities, including pre-commercialization efforts as we continue our development of, and seek regulatory approval for, our discoveries and exploration prospects. Since inception, we have incurred net losses annually and do not expect to achieve sustained profitability until the second half of 2025.

Current wording

Our net income or loss attributable to common stockholders was $0.4 million (income) and $1.6 million (loss) for the three and six months ended June 30, 2025, respectively, and $43.1 million and $157.5 million for the same periods in 2024. As of June 30, 2025 and December 31, 2024, we had an accumulated deficit of $192.7 million and $191.0 million, respectively. The majority of these accumulated losses stem from costs associated with the Longanesi field drilling and development, including asset impairments from previous years, as well as seismic imaging, exploratory costs for other conventional natural gas prospects, and general and administrative expenses. The accumulated deficits also include historical deemed dividends to the redemption value of AleAnna Energy's previous Class 1 Preferred Units (exchanged for Class A and Class C common stock in connection with the Business Combination) based on the redemption features of those units and the related accounting requirements.See“Note 10 — Equity" to the audited condensed consolidated financial statements for further details. We expect to continue to incur substantial expenses related to our operations, exploration, and development activities, including pre-commercialization efforts as we continue our development of, and seek regulatory approval for, our discoveries and exploration prospects. Since inception, we have incurred net losses annually. We achieved quarterly net income for the first time during the three months ended June 30, 2025. We expect to achieve sustained profitability during the second half of 2025.

Previous wording

Comparison of the three months ended March 31, 2025 and 2024:

Current wording

Comparison of the three and six months ended June 30, 2025 and 2024

Previous wording

During the three months ended March 31, 2025, all of our revenue was earned through electricity generation and sales at the Casalino and Campopiano renewable natural gas plants that were purchased in July 2024. Cost of revenues consists of feedstock costs, direct labor and overhead necessary to produce RNG and generate electricity. All cost of revenues was related to the RNG assets that were purchased in 2024.

Current wording

During the three and six months ended, our revenue was earned through sales of our share of natural gas production from the Longanesi field and from electricity generation and sales at the Casalino and Campopiano renewable natural gas plants. Cost of revenues from sales of electricity consists of feedstock costs, direct labor and overhead necessary to produce RNG and generate electricity. All cost of revenues was related to the RNG assets that were purchased in 2024.

Previous wording

As of March 31, 2025 and December 31, 2024, the contingent consideration liability was recorded at $26.0 million and $25.0 million, respectively. The estimate of the contingent consideration liability was determined based on inputs including the following as of March 31, 2025 and December 31, 2024: the intercontinental exchange futures prices for European natural gas, Euro to USD exchange rates of 1.08 and 1.04, respectively, and management’s future expected annual Longanesi production. We are required to make formulaic deferred consideration payments effectively equating to 20% to 50% of revenue above certain European natural gas threshold prices. The calculation and timing of such payments are primarily driven by future expected Longanesi production, as modeled by DeGolyer and MacNaughton, as well as forward European natural gas prices. While the timing and quantities of expected Longanesi production were unchanged from December 31, 2024 to March 31, 2025, and we had fully accrued the total capped Euro amount of the liability, average annual European natural gas forward prices declined.

Current wording

As of June 30, 2025 and December 31, 2024, the contingent consideration liability was recorded at $28.1 million and $25.0 million, respectively. The estimate of the contingent consideration liability was determined based on inputs including the following as of June 30, 2025 and December 31, 2024: the intercontinental exchange futures prices for European natural gas, Euro to USD exchange rates of 1.17 and 1.04, respectively, and management’s future expected annual Longanesi production. We are required to make formulaic deferred consideration payments effectively equating to 20% to 50% of revenue above certain European natural gas threshold prices. The calculation and timing of such payments are primarily driven by future expected Longanesi production, as modeled by DeGolyer, as well as forward European natural gas prices. While the timing and quantities of expected Longanesi production were unchanged from December 31, 2024 to June 30, 2025, and we had fully accrued the total capped Euro amount of the liability, average annual European natural gas forward prices declined slightly.

Previous wording

Since the total capped Euro-denominated liability was recorded as of March 31, 2025 and December 31, 2024, and March 31, 2024 and December 31, 2023, any changes in the USD-equivalent amount were entirely due to foreign exchange rate fluctuations. As such, these changes were included in currency translation adjustment for the three months ended March 31, 2025 and 2024.

Current wording

Since the total capped Euro-denominated liability was recorded as of June 30, 2025 and December 31, 2024, and June 30, 2024 and December 31, 2023, any changes in the USD-equivalent amount were entirely due to foreign exchange rate fluctuations. As such, these changes were included in currency translation adjustment for the three and six months ended June 30, 2025 and 2024.

Previous wording

Interest and other income primarily includes interest earned on cash and cash equivalents. Interest and other income decreased by $0.1 million during the three months ended March 31, 2025, compared to the same period in 2024, primarily due to slightly higher interest earned on larger average cash balances during the 2024 period compared to the 2025 period presented.

Current wording

Interest and other income (expenses) primarily includes interest earned on cash and cash equivalents. Interest and other income decreased by $0.5 million and $0.5 million during the three and six months ended June 30, 2025 compared to the same periods in 2024, primarily due to higher interest (higher rates) earned on larger average cash balances during the 2024 periods compared to the 2025 periods presented.

Previous wording

The change in the fair value of derivative liability related to the Class 1 Preferred Units was nil during the three months ended March 31, 2025, compared to $0.2 million during the same period in 2024. The fair value gain recorded during the three months ended March 31, 2024 (representing a decrease in the liability) was primarily due to a higher liquidation threshold which was driven by capital contributions made during the first quarter of 2024 through the Class 1 Preferred Units. The derivative liability was reduced from $0.2 million as of December 31, 2023 to zero as of March 31, 2024 and was ultimately derecognized in conjunction with the Business Combination.

Current wording

The change in the fair value of derivative liability related to the Class 1 Preferred Units was nil during the three and six months ended June 30, 2025, compared to nil during the three months ended June 30, 2024 and $0.2 million during the six months ended June 30, 2024. The fair value gain recorded during the six months ended June 30, 2024 (representing a decrease in the liability) was primarily due to a higher liquidation threshold which was driven by capital contributions made during the first quarter of 2024 through the Class 1 Preferred Units. The derivative liability was reduced from $0.2 million as of December 31, 2023 to zero during the first quarter of 2024 and was ultimately derecognized in conjunction with the Business Combination.

Previous wording

For the purposes of presenting consolidated financial statements, the assets and liabilities of our Euro operations are translated to USD at the exchange rate on the reporting date. The income and expenses are translated using average exchange rates. Foreign currency differences that arise on translation for consolidated purposes are recognized as a currency translation adjustment in other comprehensive loss on the consolidated statements of operations and comprehensive loss.

Current wording

For the purpose of presenting consolidated financial statements, the assets and liabilities of our Euro operations are translated to USD at the exchange rate on the reporting date. The income and expenses are translated using average exchange rates. Foreign currency differences that arise on translation for consolidated purposes are recognized as a currency translation adjustment in other comprehensive loss on the consolidated statements of operations and comprehensive loss.

Previous wording

The currency translation adjustment increased by $1.0 million or 901% for the three months ended March 31, 2025 compared to the same period in 2024. This increase was due to the fluctuation of the exchange rates between the Euro and the U.S. Dollar as well as the level of our activities.

Current wording

The currency translation adjustment increased by $3.9 million and $4.9 million for the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024. This increase was primarily driven by fluctuation of the exchange rates between the Euro and the U.S. Dollar as well as the level of our activities. This increase was primarily driven by fluctuations in the Euro to U.S. Dollar exchange rates and the level of our Euro-denominated activities. The spot rate strengthened from December 31, 2024 to June 30, 2025, and the average exchange rates were higher during the 2025 periods, resulting in larger positive currency translation adjustments relative to the 2024 periods.

Previous wording

We have generated minimal revenues from our operations to date and we had an accumulated deficit of $193.1 million as of March 31, 2025. We had $27.8 million in cash and cash equivalents on March 31, 2025. The Company’s continuing operations, as intended, are dependent upon its ability to generate cash flows or obtain additional financing. Between January 2024 and May 2024, prior to the Business Combination, we received an aggregate of $62.1 million in capital contributions from AleAnna Energy members resulting in the issuance of 62,100 Class 1 Preferred Units, to fund operating costs, capital expenditures, Business Combination related transaction expenses, and to provide working capital to meet our liabilities and commitments as they become due. We have also received approximately $1.1 million from exercises of Public Warrants between January 2025 and May 2025. In addition, we are exploring Resource Backed Loan (“RBL”) financing, renewable natural gas project loan products and other financing arrangements with several financial institutions; however, there is no guarantee that such financing will be available to us. As a normal part of our business, depending on market conditions, we may from time to time consider opportunities to issue equity or debt securities to raise additional capital. Changes in our operating plans, lower than anticipated revenues, increased expenses, acquisitions or other events may cause us to seek additional debt or equity financing in future periods. There can be no guarantee that financing will be available on acceptable terms or at all.

Current wording

We have begun generating revenue from our operations, although total revenues to date have been limited. We had an accumulated deficit of $192.7 million as of June 30, 2025. We had $22.8 million in unrestricted cash and cash equivalents on June 30, 2025. The Company’s continuing operations, as intended, are dependent upon its ability to generate cash flows or obtain additional financing. Between January 2024 and May 2024, prior to the Business Combination, we received an aggregate of $62.1 million in capital contributions from AleAnna Energy members resulting in the issuance of 62,100 Class 1 Preferred Units, to fund operating costs, capital expenditures, Business Combination related transaction expenses, and to provide working capital to meet our liabilities and commitments as they become due. We also received approximately $1.1 million from exercises of Public Warrants between January 2025 and May 2025. In addition, we are exploring Resource Backed Loan (“RBL”) financing, renewable natural gas project loan products and other financing arrangements with several financial institutions; however, there is no guarantee that such financing will be available to us. As a normal part of our business, depending on market conditions, we may from time to time consider opportunities to issue equity or debt securities to raise additional capital. Changes in our operating plans, lower than anticipated revenues, increased expenses, acquisitions or other events may cause us to seek additional debt or equity financing in future periods. There can be no guarantee that financing will be available on acceptable terms or at all.

Previous wording

To mitigate operator risks, we monitor the operational risks, credit risk, financial position and liquidity of Padana. Operational risks are monitored and acted on through: (i) periodic meetings with Padana, through a formal committee known as the “Technical Committee”, to examine upcoming activities and discuss questions and concerns, (ii) through the receipt and analysis of daily reports, (iii) through requesting unscheduled calls with Padana where areas of concern are identified, and (iv) through occasional site visits. Further, Padana’s credit risk, financial position, and liquidity are periodically evaluated through review of the financial condition of Padana’s parent organization, Gas Plus S.p.A., which is a publicly-traded company on the Italian Stock Exchange (Euronext Milan). We are able to continuously monitor the financial health of Gas Plus S.p.A. through exchange-required public disclosures, including half-annual and annual financial statements, corporate presentations, and press releases.

Current wording

To mitigate operator risks, we monitor the operational risks, credit risk, financial position and liquidity of Padana. Operational risks are monitored and acted on through: (i) periodic meetings with Padana, through a formal committee known as the “Technical Committee”, to examine upcoming activities and discuss questions and concerns, (ii) through the receipt and analysis of daily reports, (iii) through requesting unscheduled calls with Padana where areas of concern are identified, and (iv) through occasional site visits. Further, Padana’s credit risk, financial position, and liquidity are periodically evaluated through review of the financial condition of Padana’s parent organization, Gas Plus S.p.A., which is a publicly-traded company on the Italian Stock Exchange (Euronext Milan). We are able to continuously monitor financial health of Gas Plus S.p.A. through exchange-required public disclosures, including half-annual and annual financial statements, corporate presentations, and press releases.

Previous wording

The following table includes our cash flow data for the three months ended March 31, 2025 and 2024:

Current wording

The following table includes our cash flow data for the six months ended June 30, 2025 and 2024:

Previous wording

Cash used in operating activities decreased by $0.5 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. This decrease primarily reflects collections on electricity sales receivable and the timing of payments of accounts payable during the three months ended March 31, 2025 compared to the same period in 2024.

Current wording

Cash used in operating activities decreased by $2.1 million for the six months ended June 30, 2025, compared to the same period in 2024. This decrease primarily reflects cash revenues from the Longanesi field from May and June 2025, collections on electricity sales receivable from RNG plants, and the timing of payments of accounts payable during the six months ended June 30, 2025 compared to the same period in 2024.

Previous wording

Cash used in investing activities decreased by $2.7 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. In both periods presented, cash used in investing includes continued completion and tie in of the Longanesi wells. The decrease in cash used in investing activities primarily reflects a lower level of Longanesi completion and tie-in activity during three months ended March 31, 2025 compared to the same period in 2024.

Current wording

Cash used in investing activities decreased by $5.6 million for the six months ended June 30, 2025, compared to the same period in 2024. In both periods, investing cash flows primarily reflected continued development of the Longanesi wells. The decrease during the six months ended June 30, 2025 was driven by a lower level of completion and tie-in activity relative to the same period in 2024. During the second quarter of 2025, the five Longanesi wells were brought online, resulting in only a partial quarter of capitalized costs. Capital expenditures during the 2025 period primarily reflected final tie-in work and capital calls from our operating partner, Padana, for the permanent Longanesi processing facility. In contrast, the 2024 period included a full six months of development and tie-in costs for the Longanesi field, in addition to the acquisition of the Campagnatico RNG asset.

Previous wording

Cash provided by financing activities in the three months ended March 31, 2025 reflects proceeds from cash exercises of Public Warrants.

Current wording

Cash provided by financing activities during the six months ended June 30, 2025 reflects proceeds from cash exercises of Public Warrants.

Previous wording

Cash provided by financing activities in the three months ended March 31, 2024 reflects pre-Business Combination issuances of AleAnna Energy Class 1 Preferred Units used to fund our operations. Such Class 1 Preferred Units were exchanged for Class A and Class C commons stock as part of the Business Combination.

Current wording

Cash provided by financing activities during the six months ended June 30, 2024 reflects pre-Business Combination issuances of AleAnna Energy Class 1 Preferred Units used to fund our operations. Such Class 1 Preferred Units were exchanged for Class A and Class C commons stock as part of the Business Combination.

Previous wording

On May 28, 2024, we entered into the Blugas Settlement Agreement regarding the Blugas ORRI whereby Blugas was entitled to physical delivery of 20% of the first 350 million standard cubic meters (approximately 2,472 106 ft 3) produced from the Longanesi field. Under the terms of the Blugas Settlement Agreement, we paid Blugas approximately €5 million, plus an additional €1.1 million in applicable VAT, or a total of approximately $6.6 million. In exchange, we were released from any future liability related to the Blugas ORRI. As a result of the transactions contemplated by the Blugas Settlement Agreement, our 33.5% working interest in the Longanesi field is now unencumbered except for normal government royalties (10%). The Blugas Settlement Agreement was accounted for as an acquisition of the Blugas ORRI claim with a corresponding increase to the expected future cash flows from our reserves. Our year-end December 31, 2023 reserve quantities included the 20% of 350 million standard cubic meters (approximately 2,472 106 ft 3) allocable to the Blugas ORRI in our proved gas reserves. However, the required payments to Blugas associated with the sale of such quantities were reflected as cash outflows (costs) in our year-end December 31, 2023 reserve report as if such amounts were paid to Blugas. Following settlement, our year-end December 31, 2024 reserve quantities continue to include the 20% of 350 million standard cubic meters (approximately 2,472 106 ft 3), however, the previously required payments to Blugas associated with the sale of such quantities were no longer reflected as cash outflows (costs) as if such amounts were paid to Blugas. As the cash outflows (costs) were no longer reflected as if paid to Blugas, such amounts are reflected in our December 31, 2024 reserve report as allocable to our unencumbered 33.5% working interest.

Current wording

On May 28, 2024, we entered into the Blugas Settlement Agreement regarding the Blugas ORRI whereby Blugas was entitled to physical delivery of 20% of the first 350 million standard cubic meters (approximately 2,472 106 ft 3) produced from the Longanesi field. Under the terms of the Blugas Settlement Agreement, we paid Blugas approximately €5 million, plus an additional €1.1 million in applicable VAT, or a total of approximately $6.6 million. In exchange, we were released from any future liability related to the Blugas ORRI. As a result of the transactions contemplated by the Blugas Settlement Agreement, our 33.5% working interest in the Longanesi field is now unencumbered except for normal government royalties (10%). The Blugas Settlement Agreement was accounted for as an acquisition of the Blugas ORRI claim with a corresponding increase to the expected future cash flows from our reserves. Our year-end December 31, 2023 reserve quantities included the 20% of 350 million standard cubic meters (approximately 2,472 106 ft 3) allocable to the Blugas ORRI in our proved gas reserves. However, the required payments to Blugas associated with the sale of such quantities were reflected as cash outflows (costs) in our year-end December 31, 2023 reserve report as if such amounts were paid to Blugas. Following settlement, our year-end December 31, 2024 reserve quantities continue to include the 20% of 350 million standard cubic meters (approximately 2,472 106 ft 3), however, the previously required payments to Blugas associated with the sale of such quantities are no longer reflected as cash outflows (costs) as if such amounts were paid to Blugas. As the cash outflows (costs) are no longer reflected as if paid to Blugas, such amounts are reflected in our December 31, 2024 reserve report as allocable to our unencumbered 33.5% working interest.

Previous wording

In connection with our purchase of our 33.5% working interest in the Longanesi field, consideration paid included €7 million cash and up to €24 million of deferred consideration payable upon production of the Longanesi field. The deferred consideration is payable based on a formulaic calculation which is predominantly dependent on sales volumes and spot natural gas prices during the first 12 years of production (the “Earn-Out Period”). There will be no deferred consideration due if Longanesi is not developed and no deferred consideration due if average annual gas prices are less than €3.65/Mcf over the Earn-Out Period. Upon first production, AleAnna will also be required to reserve cash collateral of €3 million related to the contingent consideration liability which will be classified as restricted cash in future balance sheets and may be used to satisfy the contingent consideration liability as payments become due.

Current wording

In connection with our purchase of our 33.5% working interest in the Longanesi field, consideration paid included €7 million cash and up to €24 million of deferred consideration payable upon production of the Longanesi field. The deferred consideration is payable based on a formulaic calculation which is predominantly dependent on sales volumes and spot natural gas prices during the first 12 years of production (the “Earn-Out Period”). There will be no deferred consideration due if Longanesi is not developed and no deferred consideration due if average annual gas prices are less than €3.65/Mcf over the Earn-Out Period. Upon first production, we were also required to issue a bank guarantee of €3 million secured by cash collateral of €1 million related to the contingent consideration liability which was classified as restricted cash as of June 30, 2025. The cash collateral may be used to satisfy the contingent consideration liability as payments become due.

Previous wording

We recognized a liability for the contingent consideration in accordance with ASC 450,Contingencies(“contingent consideration liability”). As of March 31, 2025, and December 31, 2024, the total contingent consideration liability was recorded at $26.0 million and $25.0 million, respectively.

Current wording

We recognized a liability for the contingent consideration in accounting for the asset acquisition in accordance with ASC 450,Contingencies(“contingent consideration liability”). As of June 30, 2025 and December 31, 2024, the total contingent consideration liability was recorded at $28.1 million and $25.0 million, respectively.