Products and Technologies, Raw Materials
Businesswire | July 04, 2023
Origin Materials, Inc. (“Origin,” “Origin Materials,” or the “Company”) (NASDAQ: ORGN, ORGNW), the leading carbon negative materials company with a mission to enable the world’s transition to sustainable materials, announced today it has begun startup of Origin 1, the world’s first commercial CMF plant, located in Sarnia, Ontario, in-line with prior guidance.
“Yesterday we initiated startup at Origin 1, a tremendous accomplishment and milestone in our journey to decarbonize the world’s materials,” said John Bissell, Co-Founder and Co-CEO of Origin Materials. “This plant substantially scales up our revolutionary core technology platform. We expect the power of our platform intermediates, CMF and HTC, to be transformative for the chemical industry and how the world generally makes things.”
The new plant will supply industry with intermediate chemicals and materials that can be used across a wide range of end markets, including clothing, textiles, plastics, packaging, car parts, tires, carpeting, toys, fuels, and more with a ~$1 trillion addressable market. The plant represents a significant scale-up of Origin’s technology platform for converting sustainable wood residues into versatile intermediate chemicals.
CMF (chloromethyl furfural) is a versatile chemical building-block that can be used to make numerous downstream products, including para-xylene, which is the precursor to PET plastic, and FDCA (furandicarboxylic acid), which can be used in numerous sustainable products and materials such as the next-gen polymer PEF (polyethylene furanoate). The plant will also produce HTC (hydrothermal carbon), whose applications include sustainable carbon black for automotive tires.
“We are thrilled to be making our intermediates available to industry on a scale never before achieved,” said Bissell. “The commercialization of a molecule like CMF is historic, on the order of an ethylene. After working with CMF for over a decade at pilot scale, we couldn’t be more excited to begin commercial production here in Sarnia.”
Origin 1 will be operated to optimally fulfill customer demand around qualification and sampling. The plant is expected to play a key role in the development of higher-value products and applications for CMF, HTC, and other co-products. These higher value products are expected to be produced and sold at world-scale from future plants, including Origin 2, Origin 3, and potentially licensed plants.
“The startup of Origin 1 is a testament to the strength of our team in the face of pandemic and related supply-chain headwinds,” said Bissell. “We are excellently positioned to meet the massive customer demand for our renewable, carbon negative products, as we continue to execute on our mission to enable the world’s transition to sustainable materials.”
About Origin Materials
Headquartered in West Sacramento, Origin Materials is the world's leading carbon negative materials company. Origin’s mission is to enable the world’s transition to sustainable materials. For over a decade, Origin has developed a platform for turning the carbon found in inexpensive, plentiful, non-food biomass such as sustainable wood residues into useful materials while capturing carbon in the process. Origin’s patented technology platform can help revolutionize the production of a wide range of end products, including clothing, textiles, plastics, packaging, car parts, tires, carpeting, toys, fuels, and more with a ~$1 trillion addressable market. In addition, Origin’s technology platform is expected to provide stable pricing largely decoupled from the petroleum supply chain, which is exposed to more volatility than supply chains based on sustainable wood residues. Origin’s patented drop-in core technology, economics and carbon impact are supported by a growing list of major global customers and investors.
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Raw Materials
PR Newswire | July 28, 2023
Enerkem, the first company in the world to produce bio-methanol from mixed waste at commercial scale, and Dimeta, a joint venture between two of the largest off-grid energy suppliers, have announced that they are initiating feasibility studies for the development of two large scale projects that will convert waste into renewable and recycled carbon dimethyl ether (DME).
DME is a clean-burning fuel that can support decarbonisation of the off-grid energy sector, including heating, cooking, transport and industrial applications. As DME is chemically similar to Liquified Petroleum Gas (LPG), it can be blended with it up to 20% and 'dropped-in' to existing LPG supply chains, providing a seamless pathway to reducing emissions from the over 200 million tonnes of LPG used for energy each year globally.
The projects are expected to be located in Northwest Europe and in the Gulf Coast of the United States, with each project anticipated to produce approximately 165,000 tonnes of renewable and recycled carbon DME per year from mixed residual waste. The impact of the DME produced from the two projects combined would be the equivalent of significantly reducing the carbon footprint of over one million LPG heated homes, when it is blended in with LPG.
In recent months, Dimeta and Enerkem successfully completed pre-feasibility studies for these projects and are now moving into the feasibility phase - targeting the start of Front End Engineering and Design (FEED) next year.
In addition to its commercial demonstration scale facility in operation in Alberta, Canada, Enerkem is currently involved in the development and building of new commercial scale waste-to-methanol facilities in both Canada and Europe. Enerkem will use the design and development of these facilities as the basis for the design of these new projects, combined with an additional methanol-to-DME synthesis step integrated at the end of the process.
The two DME projects with Enerkem build upon the announcement of the first of a kind waste-to-DME plant spearheaded by Dimeta in the United Kingdom, which is set to be operational in 2025. The projects with Enerkem are a key part of achieving Dimeta's goal of creating over 300,000 tonnes of sustainable DME production capacity by 2027.
"We are excited to collaborate with Enerkem to transform large volumes of non-recyclable waste into renewable & recycled carbon DME on a global scale. This partnership is another significant milestone in Dimeta's journey. Enerkem has vast experience in the development of renewable solutions, and I look forward to seeing how we continue to revolutionize DME to deliver a greener future for off-grid communities." says Frankie Ugboma, Chief Executive Officer of Dimeta.
"We are committed to supporting Dimeta in achieving their decarbonization goals. This development is an example of our technological platform's flexibility as a key enabler for hard-to-abate sectors. Our joint projects can form the basis for further project developments globally within the off-grid energy market and are an opportunity to expand Enerkem's waste-to-methanol platform," adds Dominique Boies, Chief Executive Officer of Enerkem.
About Enerkem
Founded in 2000, Enerkem develops and commercializes its ground-breaking gasification technology transforming non-recyclable waste into biofuels, low-carbon fuels and circular chemicals for hard-to-abate sectors, including sustainable aviation and marine fuels. Its solution tackles both challenges of waste management and dependency on fossil fuel products while contributing to the development of a circular economy for a sustainable, net-zero-carbon future.
About Dimeta
Established in February 2022, Dimeta is a joint venture between SHV Energy and UGI International, developed to further the production and use of renewable & recycled carbon dimethyl ether (DME) a low-carbon sustainable liquid gas. The organisation has a goal to create 300,000 tonnes of renewable & recycled carbon DME production capacity by 2027.
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Chemical Management, Market Outlook
Globenewswire | July 12, 2023
Ring Energy, Inc. announced it has entered into an agreement to acquire the Central Basin Platform (“CBP”) assets of Founders Oil & Gas IV, LLC (“Founders”) for $75 million in cash (the “Transaction”). Founders’ CBP operations are located in the Permian Basin in Ector County, Texas and are focused on the development of approximately 3,600 net acres that are similar to Ring’s CBP assets acquired in 2022 from Stronghold Energy Operating II, LLC and its affiliate (“Stronghold”).
Total consideration of $75 million, subject to customary closing adjustments, consists of $60 million in cash at closing and $15 million deferred cash payment due four months after closing. The Transaction will be funded with cash on hand and borrowings under Ring’s recently reaffirmed senior revolving credit facility.
TRANSACTION HIGHLIGHTS
Immediately accretive to Ring’s shareholders, including production, reserves, Adjusted Free Cash Flow(1) and other key metrics;
Total consideration is approximately 2.3x the assets’ next twelve months’ (“NTM”) Adjusted EBITDA(1) beginning April 1, 2023;
Strengthens balance sheet by lowering the Company’s leverage ratio(2) and accelerates Ring’s ability to pay down debt;
Further increases inventory of low-risk, high rate-of-return drilling locations and improves capital allocation flexibility;
Strategically expands core operating area capturing operating and G&A cost synergies; and
The Transaction is expected to close in the third quarter of 2023 with an effective date of April 1, 2023.
ASSET HIGHLIGHTS
Second quarter 2023 production was approximately 2,500 net barrels of oil equivalent per day (“Boe/d”) (86% oil);
Margin enhancing ownership with approximately 99% working interest and high net revenue interest of approximately 87%;
Total Proved SEC year-end 2022 reserves as calculated by Ring management of 9.2 million barrels of oil equivalent (“MMBoe”) (80% oil), characterized by shallow declines and long lives;
Low-risk inventory provides significant economic returns with potential upside from targeted downspacing, including approximately 50 low-cost, high rate-of-return undeveloped drilling locations; and
Existing infrastructure provides takeaway capacity and opportunities to reduce costs and improve efficiencies.
Mr. Paul D. McKinney, Chairman of the Board and Chief Executive Officer, commented, “We are pleased to announce our agreement to acquire Founders’ conventional oil and gas assets in Ector County, Texas. These assets strategically expand our existing operations in the southern portion of the Central Basin Platform allowing us to capture operating cost and G&A synergies associated with a larger core operating area. These assets are similar to the Stronghold assets acquired last year, having stacked pay zones of high-quality rock with proven performance. Like the Stronghold assets, we intend to leverage our extensive expertise applying the newest conventional and unconventional technologies to optimally develop the inventory of undeveloped drilling locations afforded by the Transaction.”
Mr. McKinney concluded, “Today’s announcement is another example of creating value for our shareholders through our value focused proven strategy. This acquisition not only increases our production, but it also allows us to reduce our expected capital spending for the second half of 2023 thereby giving us the ability to further pay down our debt. In addition, it expands our proved reserves while lowering our leverage ratio. We look forward to quickly integrating the assets into our operations and further developing the inventory of drilling locations. In short, we view this transaction as another step in gaining greater size and scale and positioning the Company to deliver on our long-term goals for our shareholders.”
Ring has provided pro forma third and fourth quarter of 2023 guidance to reflect the pending Transaction. In addition, the guidance includes the impact of the recently completed sale of its Delaware Basin assets during the second quarter of 2023.
Ring is targeting total pro forma capital spending of $67 million to $77 million in the second half of 2023. The development program includes a balanced and capital efficient combination of drilling horizontal (“Hz”) wells on the Company’s legacy acreage and vertical wells on the acquired Stronghold and Founders’ acreage, as well as performing recompletions. Additionally, the capital spending program includes funds for targeted capital workovers, infrastructure upgrades, leasing costs, and non-operated drilling, completion, and capital workovers.
All projects and estimates are based on assumed WTI oil prices of $65 to $85 per barrel. As in the past, Ring has designed its spending program with flexibility to respond to changes in commodity prices and other market conditions as appropriate.
Based on the $72 million mid-point of collective spending guidance for the second half of 2023, the Company expects the following estimated allocation of capital investment
73% for drilling, completion, and related infrastructure;
19% for recompletions and capital workovers; and
8% for land, environmental and safety, and non-operated capital.
The Company remains squarely focused on continuing to generate Adjusted Free Cash Flow. All second half 2023 planned capital expenditures are expected to be fully funded by cash on hand and cash from operations, with excess Adjusted Free Cash Flow currently targeted for further debt reduction.
ABOUT RING ENERGY, INC.
Ring Energy, Inc. is an oil and gas exploration, development, and production company with current operations focused on the development of its Permian Basin assets.
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Products and Technologies, Market Outlook
Businesswire | July 11, 2023
Resurgens Technology Partners, a software-focused private equity firm, today announced its platform investment in Detechtion, a leading provider of real time asset performance management solutions.
Headquartered in Houston, Texas, with offices in San Luis Obispo, California; Calgary, Alberta; and Brisbane, Australia, Detechtion was founded in 1999 with the mission to improve field asset performance and field workforce efficiency for energy companies. The company offers a complementary suite of products including remote asset monitoring, asset performance management, and field service management technologies which enable energy companies to drive efficiency in their field operations.
“Detechtion has established itself as a market leader in natural gas compression monitoring and optimization, serving as a trusted partner to some of the world’s leading gas producers and oilfield service providers. We look forward to helping the company expand its suite of solutions to serve the oil and gas market more deeply, as well as leverage their existing capabilities in new industrial segments facing similar asset monitoring and optimization challenges,” said Resurgens Managing Director, Fred Sturgis.
“Resurgens’ hands-on approach, expertise in product expansion, and track-record of scaling vertical software businesses made them the right partner for us in this next chapter of Detechtion’s growth,” said Detechtion CEO Chris Smith. “Detechtion has been at the leading edge of oilfield digitalization, and we see a breadth of opportunities to serve our customers more holistically. With this investment from Resurgens, we will continue to expand the ways we help our customers drive increasing output, bring greater efficiency to their field operations, and reduce emissions.”
Detechtion is Resurgens’ sixth platform investment in the firm’s $500 million second fund and represents a continuation of the firm’s strategy to invest in the growth of vertical software companies that are leaders in their market segments.
AGC Partners served as financial advisor to Detechtion.
About Detechtion
Established in 1999, Detechtion Technologies is a leader in real-time asset performance management solutions for energy companies. Built on a foundation of subject matter expertise, digital twins, and data analytics, the solutions enable customers to operate more sustainably, while increasing productivity and reducing costs. By utilizing Detechtion’s rapidly deployed cloud solutions to connect and manage tens of thousands of remote assets and processes across the globe, its customers save millions annually.
About Resurgens Technology Partners
Resurgens Technology Partners is a tech-focused private equity firm investing in North American and select European lower middle-market application and IT/infrastructure software businesses. Resurgens’ growing team offers a diversity of investing, operating and talent management experience, applying an active and engaged value creation approach with each portfolio company. Resurgens is headquartered in Atlanta, with additional professionals located in Austin, London and Silicon Valley.
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