Big Sky Industrial Inc.

Revenue was $2.1 million, essentially flat year over year, as stronger realized oil prices offset lower volumes from the completed divestiture program. Cash G&A was $1.8 million, down from $2.6 million in Q1, and adjusted EBITDA was negative $0.9 million versus negative $1.3 million a year ago. The company invested $9.6 million of industrial gas capital in the first half, compared with $2.5 million in the prior-year period. On liquidity, management said total liquidity was $21.5 million at quarter-end and $16.4 million as of August 4 after a $4 million draw for construction. For guidance, management reiterated plant commissioning later this year and first gas/first commercial operations in March 2027; Phase 2 planning is underway but not in the base case.

Ryan Smith framed the quarter as a transition from development to construction, saying the rebrand to Big Sky Industrial now matches the business and that the Phase 1 capital stack is complete. He emphasized that construction is progressing on schedule and that the company is moving through a series of derisking milestones, with MRV approvals, gathering system completion, commissioning, and first revenue all ahead. His tone was confident and upbeat, repeatedly stressing that the market is not yet valuing the combined industrial gas, carbon management, and oil platform appropriately.

Mark Zajac focused on the capital structure and liquidity. He cited $21.5 million of total liquidity at quarter-end and $16.4 million as of August 4 after a $4 million construction draw, and reviewed the amended senior secured credit facility: the borrowing base was doubled to $20 million, the interest margin was fixed at 200 basis points, covenant testing is suspended until the quarter ending March 31, 2027, and the facility matures in May 2029 with no prepayment penalties. He also pointed to the $9.6 million of industrial gas capital invested in the first half as evidence that the company has moved into construction.

Analysts focused on whether MRV approvals are truly on the critical path and whether a delay would block startup or helium monetization. Management said a 6- to 8-month MRV delay is “wildly unlikely,” but even if it happened, the facility could still start up and capture/sequester CO2; the difference would be that Big Sky would not receive the 45Q credits until approvals are in place. Questions also covered Phase 2 sizing and the offtake agreement; management said Phase 1 helium output is 100% contracted for 5 years, and Phase 2 will likely be sized between 2x and 3x Phase 1 depending on execution, monetization of 45Q, and some added leverage.