Verde Clean Fuels has closed the previously announced $50m equity investment by Cottonmouth Ventures, a wholly owned subsidiary of Diamondback Energy.
The investment consists of the purchase of 12.5 million shares of Verde’s Class A common stock by Cottonmouth at a purchase price of $4 per share.
The investment represents the second investment by Cottonmouth in Verde over the past two years, for a total investment of $70m, making Cottonmouth the second largest shareholder. Proceeds are expected to be used to further the development and construction of potential natural gas-to-gasoline production plants and other general corporate purposes.
The proposed plants to be jointly developed by Verde and Cottonmouth would produce fully-refined gasoline utilizing Verde’s patented (STG+®) process from associated natural gas feedstock supplied from Diamondback’s operations in the Permian Basin.
In connection with the investment, Verde expanded its Board of Directors from seven to eight members and appointed Johnny Dossey, as Cottonmouth’s director designee, to its Board of Directors.
Dossey, currently Vice-President of Marketing at Diamondback, said Verde’s technology provides an opportunity to convert associated natural gas from its Permian Basin operations into gasoline, as well as an anticipated high value outlet for a volume of natural gas with the added potential benefit of flare mitigation and production of a lower carbon fuel.
Verde’s syngas-to-gasoline plus (STG+®) process converts syngas, derived from diverse feedstocks, into fully finished liquid fuels that require no additional refining.
Speaking exclusively to gasworld last October, Miller said its first commercial facility will take approximately 34 million cubic feet of natural gas a day and produce around 3,000 barrels of gasoline daily, with production slated to start in 2027.
“It’s a pretty substantial project, north of $350m capital, and a sizeable plant. We have multiple opportunities with Diamondback Energy to address other natural gas supplies that they have. We aim to have four to six plants going into the Permian Basin in the not too distant future.”
Read more: Verde Clean Fuels gears up for renewable gasoline era
