Verde Clean Fuels has finalised a $50m equity investment from Cottonmouth Ventures, a subsidiary of US-based oil and natural gas company Diamondback Energy, to expand natural gas-to-gasoline plants.
The investment involves Cottonmouth purchasing 12.5 million shares of Verde’s Class A common stock at $4 per share.
This marks Cottonmouth's second investment in Verde, bringing its total to $70m and making it the second-largest shareholder.
This capital will support the progression and construction of natural gas-to-gasoline production facilities, which are set to be co-developed by Verde and Cottonmouth.
These plants aim to produce fully refined gasoline using Verde's patented STG+ process, converting natural gas from Diamondback's operations in the Permian Basin.
As part of the investment agreement, Verde has increased its board of directors from seven to eight members, welcoming Johnny Dossey, Cottonmouth's director designee, to the board.
Dossey said: "This investment is consistent with our commitment to efficiency and sustainability in oil and gas operations. Verde's technology provides an exciting opportunity to convert associated natural gas from our Permian Basin operations into gasoline, as well as an anticipated high value outlet for a volume of our natural gas with the added potential benefit of flare mitigation and production of a lower carbon fuel."
The collaboration is intended to leverage Verde's technology to optimise the value of Diamondback's natural gas resources.
Verde CEO Ernest Miller added: "We are proud and excited to announce the closing of Cottonmouth's second investment in Verde.
"Diamondback's continued confidence in our team and our technology is instrumental as we continue advancing our plans to deploy our technology. In addition, we are pleased to welcome Johnny as a director to our Board of Directors. We look forward to having him as part of our team as we look to finalise engineering and design, and shift focus toward constructing and operating commercial production plants.”
