Verde Clean Fuels enters $50M stock purchase pact with Cottonmouth Ventures

Verde Clean Fuels (VGAS) announced the entry into a stock purchase agreement with Cottonmouth Ventures, a wholly-owned subsidiary of Diamondback Energy (FANG), for a $50M equity investment by Cottonmouth into Verde. The investment consists of the purchase of 12.5M shares of Verde’s Class A common stock at a purchase price of $4.00 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. 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. Effective at closing of the investment, 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.