Cottonmouth Ventures, subsidiary of Midland-based Diamondback Energy, is making an equity investment in Verde Clean Fuels with a stock purchase agreement valued at $50 million. It’s the second investment by Cottonmouth in Verde in the last two years for a total of $70 million – making Cottonmouth the second largest shareholder of Verde.
Verde’s announcement last week said, “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 utilizing Verde’s patented process from associated natural gas feedstock supplied from Diamondback’s operations in the Permian Basin.”
Ernest Miller, CEO of Houston-based Verde, said Dec. 19, “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.”