X-energy and Ares Acquisition Corporation Announce Strategic Update to Business Combination Terms to Reinforce Long-Term Value Creation Opportunity and Alignment with Shareholders

X-Energy Reactor Company, LLC (“X-energy” or the “Company”), a leading developer of advanced small modular nuclear reactors and fuel technology for clean energy generation, and Ares Acquisition Corporation (NYSE: AAC) (“AAC”), a publicly-traded special purpose acquisition company, announced today a strategic update to their previously announced business combination agreement that revises the valuation of the transaction. Under the amended terms, X-energy’s pre-money equity value has been revised to $1.8 billion from approximately $2.1 billion. By establishing a more attractive entry point for investors, X-energy and AAC believe the revised valuation reinforces the long-term value creation opportunity for, and the companies’ alignment with, shareholders.

X-energy also announced the completion of key engineering and design milestones as its Xe-100 advanced small modular nuclear reactor (“SMR”) has progressed from basic design to the Final Design Readiness Review phase. Reaching this phase demonstrates the substantial progress the Company has made to develop and eventually deploy an innovative advanced nuclear facility through the U.S. Department of Energy’s (“DOE”) Advanced Reactor Demonstration Program (“ARDP”) to provide clean, safe, zero-carbon energy for a broad range of uses and applications that meet customers’ unique needs.

X-energy has invested significant engineering hours in developing its technology, including approximately 800,000 hours in its Xe-100 design, 250,000 hours in its TRISO-X nuclear fuel design, and 117,000 hours in pre-application engagements, reviews, and interactions with the U.S. Nuclear Regulatory Commission (“NRC”) in preparation for the submission of the ARDP project Construction Permit application to the NRC. As a result, key Xe-100 subsystems are now significantly more defined and developed, and X-energy's manufacturing, construction, and supply chain partners are deeply integrated with the Company to provide input on detailed design, constructability, and associated costs.

The Company completed its most recent review of design processes and related costs on March 31, 2023. As a result, X-energy updated its cost estimates to complete the full ARDP scope to a total of between $4.75 and $5.75 billion. This scope includes the design and licensing of the Xe-100 standard plant, the design, licensing, and construction of the TRISO-X commercial fuel fabrication facility, and the construction of a four-unit Xe-100 facility at the Dow Inc. (“Dow”) UCC Seadrift Operations site (the “Seadrift site”) in Texas. Approximately 15% to 17.5% of the total ARDP project costs are assumed to be paid by X-energy. The Company’s updated program cost estimate reflects, among other factors, inflationary pressures for construction materials, higher-than-expected labor costs, increasing interest rates, supply chain constraints for equipment, and maturation in the design of the Xe-100, as well as a shift in program scope from an electric-generation-only plant to a combined steam and power project at the Seadrift site that results in an extension of some program elements to 2030.