NextDecade LNG has raised doubts it can continue as a “going concern” as it moves to bring a final investment decision for Phase 2 of its $18 billion-plus Rio Grande LNG project prior to year-end.
In the company’s most recent regulatory filings, it claimed to have just under $46 million in cash on hand, with another $26 million available under a revolving credit facility. The company added that the funds may not be sufficient to pay for its planning operations and development activities for future phases of the Rio Grande LNG project.
NextDecade has incurred operating losses since its inception, and management expects operating losses and negative cash flows to continue until the commencement of operations at the facility and as a result, the company will require additional capital to fund its operations and execute its business plan, a recent 10-Q regulatory filing read.
“There is substantial doubt about the company's ability to continue as a going concern,” it added. “The company plans to alleviate the going concern issue by obtaining sufficient funding through additional equity, equity-based, or debt instruments, or any other means, and by managing certain operating and overhead costs.”
For the first quarter of 2024, NextDecade posted an operating loss of $38 million compared to a loss of $27 million for the first quarter last year.
“Because our businesses and assets are under construction or in development, we have not historically generated significant cash flow from operations, nor do we expect to do so until liquefaction trains at the Rio Grande LNG Facility begin operating or until we install CCS systems at third-party industrial facilities,” the filing continued.
“We intend to fund development activities for the foreseeable future with cash and cash equivalents on hand and through the sale of additional equity, equity-based, or debt securities in us or in our subsidiaries. There can be no assurance that we will succeed in selling equity or equity-based securities or, if successful, that the capital we raise will not be expensive or dilutive to stockholders.”
The Rio Grande LNG export facility is located in Brownsville, Texas. At full development, it aims to be the largest privately funded project in Texas. The three-train first phase would be capable of exporting almost 18 mtpa from the 984-acre site. Plans for Phase 2 include adding Trains 4 and 5 with a combined 9.4 mtpa capacity.
