New Fortress Energy Surges on Tentative Puerto Rico Deal Approval
The struggling energy firm's $4 billion LNG supply contract, awaiting final board sign-off, is seen as a critical lifeline amid deep financial distress.
New Fortress Energy (NASDAQ: NFE), the global energy infrastructure company facing severe financial headwinds, saw its shares react sharply following reports of a tentative approval for a massive energy contract in Puerto Rico, a deal critical to the firm's survival.
The company has secured a vital, albeit not yet final, green light for a seven-year, $4 billion agreement to supply liquefied natural gas (LNG) to the island's power grid. The deal's value dwarfs New Fortress Energy's market capitalization, which stood at approximately $347 million as of Friday's close, highlighting its transformative potential for the embattled firm.
Shares of NFE have been under immense pressure, plummeting over 88% in the past year from a 52-week high of $16.66 to a recent low of $0.98. The company has been navigating significant financial distress, posting a net loss of $293.36 million in the third quarter of 2025. Earlier in November, NFE entered into a forbearance agreement with lenders after missing a $163.8 million interest payment, a move that underscored its precarious liquidity position and raised the possibility of bankruptcy, as noted in recent company warnings.
Against this backdrop, the Puerto Rico contract is viewed by investors as a powerful lifeline. The agreement, which includes an option for a three-year extension, aims to provide a stable fuel source for the Puerto Rico Electric Power Authority (PREPA), supporting the island's transition away from higher-emission and more expensive liquid fuels. The LNG is expected to be sourced from NFE’s Fast LNG facility located offshore Altamira, Mexico.
The path to this agreement has been complex. An earlier proposal for a 15-year contract was denied, leading to restructured negotiations that culminated in the current seven-year term. The deal now awaits final sign-off from Puerto Rico's Financial Oversight and Management Board (FOMB), which must approve all major government contracts.
Analysts have set a consensus price target of around $4.75 for NFE, suggesting that a successful execution of the Puerto Rico contract could unlock significant value. However, the stock remains highly speculative. The company's future hinges almost entirely on its ability to finalize and execute this agreement, generate stable cash flow to service its substantial debt, and regain a path to profitability.
Final approval from the FOMB is the next major catalyst. Should the board grant its consent, it would provide NFE with a foundational revenue stream and a much-needed vote of confidence from a key government partner. According to the company's announcement in September, the pricing structure is linked to the Henry Hub benchmark, providing a degree of market transparency. For Puerto Rico, the deal promises energy cost reduction and improved grid reliability.
Until that final approval is secured, investors will be closely watching for any further developments. The tentative nod offers a glimmer of hope for a company at a critical juncture, but the risks associated with its debt and operational execution remain substantial.