Calumet, Inc. CLMT recently announced the completion of a $1.44 billion guaranteed loan facility that had been awarded by the U.S. Department of Energy (DOE). The funding, designated for Renewable Fuels and Biomass Energy, will support its subsidiary, Montana Renewables.
How Will CLMT Benefit From the DOE Loan?
The expansion program includes several developments, such as a second renewable fuels reactor, removing the bottlenecks of any of the existing units, installing SAF assets that can be used for blending and logistics, increasing hydrogen production, cogenerating on-site water treatment and recycling capabilities.
The expansion of the fuels facility will enable Montana Renewables to increase its annual production capacity of Sustainable Aviation Fuel (SAF) to around 300 million gallons and the combined SAF and renewable diesel production capacity to 330 million gallons. The investment will double the company’s seed oils and tallow purchasing capacity.
The MaxSAF expansion drive will also boost the economic development of the region by creating about 450 construction jobsand 40 operational jobs,supporting the agricultural industry and positioning the State of Montana as a global leader in renewable fuels.
CLMT Secured Loan Guarantee Structure
The loan is structured to be released in two tranches. The first tranche of about $782 million will fund the eligible expenses previously done by Montana Renewables. The balance loan will be released in the second tranche as the delayed draw construction facility will begin in 2025 through the anticipated completion of the MaxSAF project in 2028. With a competitive loan structure featuring a 15-year tenor and favorable interest rates, the project aligns with Calumet’s vision to enhance its shareholder value.
CLMT’s Zacks Rank and Key Picks
Indianapolis-based Calumet Inc. manufactures, formulates and markets a diversified slate of specialty branded products and renewable fuels to customers across a broad range of consumer-facing and industrial markets. Currently, CLMT has a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at some better-ranked stocks like ARC Resources Ltd. AETUF, Gulfport Energy Corporation GPOR and Coterra Energy Inc. CTRA.While ARC Resources and Gulfport Energy currently sports a Zacks Rank #1 (Strong Buy), Coterra Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Calgary, Canada-based ARC Resources is engaged in the exploration, acquisition and development of oil and natural gas properties. AETUF’s expected EPS growth rate for next year is 50.78%, which aligns favorably with the industry growth rate of 10.50%.
Gulfport Energy is an independent natural gas and oil company focused on the exploration and development of natural gas and oil properties in North America. The Zacks Consensus Estimate for GPOR’s 2024 earnings indicates 108.53% year-over-year growth.
Houston, TX-based Coterra Energy is an independent upstream operator engaged in the exploration, development and production of natural gas, crude oil and natural gas liquids. CTRA’s expected EPS (earnings per share) growth rate for the next five years is 10.10%, which aligns favorably with the industry growth rate of 8.30%.
Free: 5 Stocks to Buy As Infrastructure Spending Soars
Trillions of dollars in Federal funds have been earmarked to repair and upgrade America’s infrastructure. In addition to roads and bridges, this flood of cash will pour into AI data centers, renewable energy sources and more.
In, you’ll discover 5 surprising stocks positioned to profit the most from the spending spree that’s just getting started in this space.
Calumet, Inc. (CLMT) : Free Stock Analysis Report
Gulfport Energy Corporation (GPOR) : Free Stock Analysis Report
Arc Resources Ltd. (AETUF) : Free Stock Analysis Report
Coterra Energy Inc. (CTRA) : Free Stock Analysis Report
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