Verde Clean Fuels secures investment for natural gas-to-gasoline projects

Verde Clean Fuels, Inc. (NASDAQ: VGAS), a leader in clean energy innovation, has announced a $50 million equity investment agreement with Cottonmouth Ventures, LLC, a subsidiary of Diamondback Energy, Inc. (NASDAQ: FANG). The investment underscores growing industry confidence in Verde’s innovative approach to converting natural gas into clean, refined fuels, aligning with broader efforts to address environmental and economic challenges in resource-rich regions like the Permian Basin.

$50 Million Investment to Drive Advanced Clean Fuel Technologies

Cottonmouth Ventures will purchase 12.5 million shares of Verde’s Class A common stock at $4.00 per share, with the deal expected to close in the first quarter of 2025, pending regulatory approvals and customary conditions. This transaction marks Cottonmouth’s second equity investment in Verde, bringing its total funding commitment to $70 million and making it the second-largest shareholder in the company.

The funds will be directed toward developing and constructing Verde’s proposed natural gas-to-gasoline production facilities in the Permian Basin. These plants will leverage Verde’s proprietary syngas-to-gasoline plus (STG+) process to convert stranded and flared natural gas into high-quality liquid fuels, including Reformulated Blend-stock for Oxygenate Blending (RBOB) gasoline. This innovative approach not only mitigates the environmental challenges associated with flaring but also unlocks economic value from previously underutilized natural gas resources.

Strategic Collaboration with Industry Leaders

Verde CEO Ernest Miller emphasized the strategic importance of the partnership with Diamondback Energy. He highlighted that Diamondback’s commitment to sustainable energy practices aligns with Verde’s mission to deliver clean fuel solutions at scale. Miller described the STG+ technology as transformative, particularly in regions like the Permian Basin, where flaring and pipeline constraints pose ongoing challenges.

“This investment represents a significant vote of confidence in our technology and its potential to revolutionize fuel production in regions with abundant natural gas,” Miller stated, adding that the collaboration with Cottonmouth would accelerate Verde’s efforts to commercialize its clean fuel innovations.

Governance Enhancements Reflect Partnership Growth

As part of the agreement, Verde will expand its Board of Directors to include eight members, appointing a director and an observer designated by Cottonmouth Ventures. This governance update underscores the strengthening relationship between the two companies and reflects a shared vision for advancing clean energy initiatives.

A Milestone for Clean Energy Innovation

This investment represents a critical milestone for Verde Clean Fuels as it scales its clean energy solutions to meet growing demand. The deployment of Verde’s STG+ technology offers a sustainable alternative to traditional refining methods, creating fully finished fuels directly from diverse feedstocks, including biomass and flared natural gas. By focusing on economic and environmental sustainability, Verde positions itself as a key player in the energy transition.

Looking Ahead: Clean Energy’s Role in the Permian Basin

As the energy industry grapples with the dual pressures of environmental stewardship and economic viability, Verde Clean Fuels and Cottonmouth Ventures aim to demonstrate the feasibility of cleaner production methods in the Permian Basin and beyond. Their collaborative approach not only addresses the immediate challenges of flaring but also highlights the potential for clean fuel technologies to redefine the future of energy production.