FRVO: Drilling Pace Record Highlights Continued Cost Improvements

Research evidence excerpt

FRVO: Drilling Pace Record Highlights Continued Cost Improvements

EQUITY RESEARCH QUICK TAKE

RBC Capital Markets, LLC

Christopher Dendrinos, CFA (Analyst)

Laura Deng (Senior Associate)

July 8, 2026

Fervo Energy Company

Drilling Pace Record Highlights Continued Cost Improvements

NASDAQ: FRVO | USD 23.57 | Outperform | Price Target USD 46.00

Sentiment: Positive

Our view. The company achieved a drilling pace record and reached 19,448 ft measured depth in 21 days and at hotter

temperatures of 460 degrees Fahrenheit. We believe the achievement demonstrates that FRVO continues to make incremental

cost improvements and is on track to achieve its target $5,500/kW well cost at Cape Phase II. Shares have come under pressure

the past few weeks, which we largely attribute to an overall sell-off in clean energy (ICLN down ~7% the past 2 weeks). We believe

that FRVO remains on track to bring its first project online later this year and believe a new PPA announcement could also be a

nearer term catalyst.

FRVO announced new company record for drilling pace on the most complex well design to date. Today AMC Fervo announced it

had drilled its ninth well for Cape Phase II using its 3.0 well design with a spud to total depth time of 21 days (drilling rate improved

143% since its first Cape Station well). The well, Sawtooth 7, set a company record in speed and has measured depth of 19,448

feet with a 7,500-foot lateral in a 460 degrees Fahrenheit resource. Fervo has progressed from its 1.0 design at Project Red in 2022

- which reached 11,220 feet with 3,250-foot laterals and 5" casing at 350 degrees Fahrenheit in 70 days, to its 2.0 design at its first

wells at Cape Station I - which reached 14,483 feet with 5,000-foot laterals at 400 degrees Fahrenheit in 21 days, to this 3.0 design