Got through it. Worth sharing now. Certain questions in the report are possibly addressable over time. The bigger technical concerns that aren’t “fixable” (if real) are pretty spot on. morpheus-research.com/fervo/

2/2 — 2028 — 2028: The mantra is the same “we know the issues and how to fix them. We’ve redesigned it all. We’ve pivoted to drill a different type of resource that is hotter. That’ll fix it”. They mention the impact of the makeup wells having a big positive impact. Full project costs won’t be mentioned, just the incremental power from the makeup wells. “Ignore the sunk costs, look at this instead”. The performance of this project will be swept under the rug and a new shiny object will show up. 2028: Some investors believe things are fixed. Most investors are already out. Company purely in the penalty box until they can prove their system works (something that should have been the case prior to going public). It’s difficult to predict investor sentiment. IF the owners of Fervo were oil and gas investors, it would be shredded to zero at this point. But there’s a chance the “believers” (who don’t necessarily have a technical background) keep this thing pumped up. Who knows. The big problem with fixing this mid-flight is these are $200 million mega projects that take 18+ months to execute. In oil and gas, they bring on new projects every few weeks. Relatively easy to “move on” and gain investor confidence back. Fervo’s projects hit every few years. When you’re in the penalty box, that’s very very bad. The importance of this dynamic cannot be overstated. 2H 2028: New projects start to come online with “gen 3” designs (this doesn’t mean anything). Meanwhile, long term performance data (12-18 months) from first project is in, and the results indicate more design changes are needed due to faster than expected thermal declines, higher than expected water losses, and surface issues, but $500mm-$1bn of capital has already been sunk into the ground in follow up projects with the wrong designs. This largely won’t be communicated. 2H 2028: New issues emerge in the follow up projects due to new geologic conditions (faults, fractures, things you can’t see). 2H 2028: New issues emerge on surface (water availability, surface equipment issues, transmission issues, commercial issues). FY 2028: More delays. More fixes. OPEX coming in hot while trying to fix the issues, meanwhile power is < 50% vs modeled. Massive capex needs ahead of them. Again, the severity of the issues won’t be communicated clearly. — 2029 — 2029: Offtakers spooked, investors spooked, stock price too low to raise meaningful capital without unreasonable dilution. 2029: Company shrinks back to developing smaller niche projects, redeveloping more conventional geothermal with advanced methods. Prize is 1% the size of what was promised with “EGS everywhere”, but it works. Just at a very small scale. — 2030 — 2030: New projects ($100mm vs $1bn) are economic, but slow and not scalable outside of where these geologic anomalies exist and are already being developed (think, Ormat). Confined primarily to existing geothermal fields that are getting juiced with new methods. — 2031+ — 2031-2036: additional project types added. Business is developing economic projects. Small scale, but it works. In 2033 their first project, Cape Station, finally decommissioned due to thermal declines. 15 years prior to modeled expectations. Equity investors in these projects get wiped. Project finance investors only see 50% of what they put in. Offtakers are sitting there without their power. Oof. 2038: 12 years after IPO, business has finally clawed back to IPO levels. Growing at 5-10% per year. 2039: the decommissioned project at cape station turned into a museum. MBA students are required to visit the museum as a lesson as to why you don’t place a $5bn valuation on a business that‘s tasked with building a plane while flying it.

…cont…last point… Here’s the smoking gun highlighting the critical flaw in their methodology, point #2 from the paper they published: “2. We model most relevant public companies and most relevant private companies in our universe, asset by asset, bottom up.” Of course they did that. And of course their conclusion is what it is. The reality of the situation is this: The “most relevant” public and private companies today are not the most relevant influence on future US nat gas supply. They’re just not. And when you only focus on the big boys in established plays (with dwindling inventory) you completely miss the collective behemoth that’s waiting for a sustained 4 handle. If/when that hits, people will finally be reminded how deep the nat gas bench is in this country.