Verde Clean Fuels has secured an additional $50m investment from 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 at a purchase price of $4 per share.
Closing of the investment is anticipated to occur during Q1 2025, subject to satisfaction of customary closing conditions.
Upon closing, the investment would represent the second investment by Cottonmouth in Verde over the past two years, for a total investment of $70m, making Cottonmouth the second largest shareholder of Verde.
Ernest Miller, CEO of Verde, said it continues to advance plans to deploy its technology through the development of commercial production plants.
“Diamondback is a strategic industry partner at the forefront of bringing sustainable operational practices to the oilfield and supporting the overall transition to clean energy,” he said.
“This investment is an expression of confidence in our technology, which we believe has the potential to alleviate economic and environmental concerns in the Permian Basin and other pipeline-constrained basins, where flaring and stranded natural gas represent a significant challenge.”
Proceeds from the investment are expected to be used to further the development and construction of potential natural gas-to-gasoline production plants in the Permian Basin and for other general corporate purposes.
The proposed plants to be jointly developed by the parties would produce fully refined gasoline utilising Verde’s patented (STG+®) process from associated natural gas feedstock supplied from Diamondback’s operations in the Permian Basin.
Verde will expand its Board of Directors to eight members and appoint a new director to be designated by Cottonmouth. Cottonmouth will also be entitled to appoint an observer to the company’s board of directors.
Read more: Verde Clean Fuels gears up for renewable gasoline era
