Verde Clean Fuels, Inc. Reports Q4 and FY 2024 Results

Rhea-AI Summary

Verde Clean Fuels (NASDAQ: VGAS) reported its Q4 and FY 2024 financial results, highlighting continued progress in its natural gas-to-gasoline project development. The company secured a significant $50 million equity investment from Cottonmouth Ventures, a Diamondback Energy subsidiary, at $4.00 per share.

Key financial metrics include:

• Q4 2024 net loss: $(2.7) million, or $(0.14) per share
• FY 2024 net loss: $(10.5) million, or $(0.53) per share
• Cash and cash equivalents: $19.0 million with no debt
• Capitalized FEED costs: $1.0 million for Permian Basin project

The company continues to advance its front-end engineering and design (FEED) for the proposed Permian Basin project, while exploring additional opportunities to deploy its proprietary liquid fuels processing technology. Cottonmouth's latest investment makes it Verde's second-largest shareholder, with total investments reaching $70 million over two years.

Positive

• Secured $50 million equity investment from Cottonmouth Ventures at $4.00 per share
• Strong cash position of $19.0 million with zero debt
• Total strategic investment from Cottonmouth reached $70 million
• Advancing FEED development for Permian Basin project with Diamondback Energy partnership

Negative

• Q4 2024 net loss of $(2.7) million
• Full-year 2024 net loss increased to $(10.5) million

Insights

Financial Analyst

The $50 million equity investment from Cottonmouth Ventures (Diamondback Energy's subsidiary) represents a transformative development for Verde Clean Fuels, especially when viewed in context of the company's $79.4 million market capitalization. This investment was priced at $4.00 per share, a 13.3% premium to Verde's current trading price, signaling strong confidence in the company's technology and business model.

The Q4 net loss of $(2.7) million and full-year 2024 loss of $(10.5) million are expected for a pre-revenue company developing proprietary technology. What's more significant is Verde's financial position - $19 million cash with zero debt as of December 31, 2024. With the additional $50 million investment (Cottonmouth's second investment, bringing their total to $70 million), Verde now has substantial runway to advance its commercialization efforts.

Looking at the burn rate from Q4 ($2.7 million), the pre-investment cash would have provided approximately 7 quarters of runway. Post-investment, Verde's financial flexibility has dramatically improved. This funding security allows management to focus on technology development rather than near-term financing concerns.

Particularly notable is that Cottonmouth has become Verde's second-largest shareholder, creating a deepening strategic alignment that extends beyond mere financing. This repeated investment from a subsidiary of Diamondback Energy, a significant player in the Permian Basin, provides strong validation of Verde's natural gas-to-gasoline technology and its potential commercial applications.

Energy Technology Specialist

The advancement of Verde's front-end engineering and design (FEED) for their natural gas-to-gasoline project represents a critical developmental milestone. The Permian Basin location is strategically significant as it positions the technology directly at one of America's richest natural gas sources, potentially enabling Diamondback to monetize associated gas that might otherwise be flared or sold at lower market rates.

The $1.0 million in capitalized FEED costs indicates measured progress toward commercialization, with costs being partially offset through the joint development agreement structure. This capital-efficient approach allows Verde to advance their proprietary technology while sharing development expenses with their strategic partner.

Verde's technology addresses a fundamental challenge in the energy sector: converting stranded or associated natural gas into higher-value liquid transportation fuels. This value proposition is particularly compelling in regions like the Permian where infrastructure constraints can limit natural gas monetization options.

Diamondback's deepening financial commitment through Cottonmouth ($70 million total investment) suggests strong confidence in both the technical feasibility and economic potential of Verde's gas-to-liquids process. For a major producer to make this scale of investment indicates the technology may offer meaningful advantages over alternative gas monetization pathways such as LNG, CNG, or traditional gas-to-liquids approaches.

The joint development structure also provides Verde with invaluable operational insights and potential access to Diamondback's infrastructure and gas resources, significantly derisking the path to commercial deployment beyond what would be possible through financial investment alone.

Q4 2024 and Subsequent Event Highlights

• Continuing to advance front-end engineering and design (“FEED”) for proposed natural gas-to-gasoline project in the Permian Basin

• Closed $50 million equity investment by Cottonmouth Ventures, LLC (“Cottonmouth”), a wholly-owned subsidiary of Diamondback Energy, Inc. (“Diamondback”)

HOUSTON--(BUSINESS WIRE)-- Verde Clean Fuels, Inc. (“Verde” or “the Company”) (NASDAQ: VGAS) today reported results for the fourth quarter and full year 2024.

“We continue to advance our plans to deploy our proprietary liquid fuels processing technology through the development of commercial production plants. During 2024, we signed a joint development agreement with Cottonmouth and began FEED for the Permian Basin project, a proposed natural gas-to-gasoline plant to be jointly developed with Cottonmouth utilizing our technology and associated natural gas from Diamondback’s operations. More recently, we announced the signing and closing of an additional $50 million equity investment by Cottonmouth into Verde, which positions us to continue advancing our joint development activities. In addition to these efforts, we also continue to identify and evaluate other potential opportunities to deploy our technology while remaining disciplined with our resources,” said Ernest Miller, CEO of Verde.

For the three months ended December 31, 2024, the Company recorded net loss of $(2.7) million and diluted net loss per share of Class A common stock of $(0.14). For the twelve months ended December 31, 2024, the Company recorded net loss of $(10.5) million and diluted net loss per share of Class A common stock of $(0.53). The Company’s net loss for the three and twelve months ended December 31, 2024 was primarily attributable to ongoing general and administrative expenses.

As of December 31, 2024, the Company had cash and cash equivalents of $19.0 million and no debt. Also as of December 31, 2024, the Company had capitalized $1.0 million of FEED costs related to the proposed Permian Basin project, net of amounts reimbursable under the joint development agreement between Verde and Cottonmouth.

On January 29, 2025, the Company announced the closing of a $50 million equity investment by Cottonmouth. The investment consisted of the purchase of 12.5 million shares of Verde’s Class A common stock by Cottonmouth at a price of $4.00 per share. The investment represented the second investment by Cottonmouth in Verde over the past two years, for a total investment of $70 million, making Cottonmouth the second largest shareholder of Verde.

About Verde Clean Fuels, Inc.

Verde is a clean fuels company focused on the deployment of its innovative and proprietary liquid fuels processing technology through development of commercial production plants. Verde's synthesis gas ("syngas") -to-gasoline plus (STG+®) process converts syngas, derived from diverse feedstocks, into fully finished liquid fuels that require no additional refining. Verde is currently focused on identifying and evaluating opportunities to convert associated natural gas into gasoline, which is expected to provide a market for such natural gas with the added potential benefits of flare mitigation and production of gasoline with a lower carbon intensity than conventional gasoline.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of present or historical fact included in this press release, regarding the Company’s expectations and any future financial performance, the Company’s strategy, future operations, financial position, prospects, plans, goals and objectives of management are forward-looking statements. The words “could,” “should,” “would,” “will,” “aim,” “may,” “focus,” “believe,” “anticipate,” ”intend,” “estimate,” “expect,” “advance,” ”project,” “plan,” “potential,” "goal,” “strategy,” “proposed,” “positions,” the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Such forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the control of the Company, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. These forward-looking statements are based on management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. Except as otherwise required by applicable law, the Company disclaims any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date hereof. The Company cautions you that these forward-looking statements are subject to risks and uncertainties, most of which are difficult to predict and many of which are beyond the Company’s control. These risks and uncertainties include, but are not limited to: changes in general economic, financial, legal, political and business conditions; changes in domestic and foreign markets; the failure of Verde to develop its first commercial facility, whether due to the inability to obtain the required financing or for any other reason; the failure of Verde to develop any additional commercial facility for any reason; the risks and uncertainties relating to the implementation of Verde’s business strategy and the timing of any business milestone; and delays in acquisition, financing, construction and development of any potential projects. Should one or more of the risks or uncertainties described herein and in any oral statements made in connection therewith occur, or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements. There may be additional risks that the Company presently does not know or that the Company currently believes are immaterial that could cause actual results to differ from those contained in the forward-looking statements. Additional information concerning these and other factors that may impact the Company’s expectations and projections can be found in the Company’s filings with the Securities and Exchange Commission (the “SEC”). The Company’s filings with the SEC are available publicly on the SEC’s website at www.sec.gov.

VERDE CLEAN FUELS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS
	For The 3 Months Ended December 31,								For The Year Ended December 31,
	(Unaudited)
		2024				2023				2024				2023
General and administrative expenses	$	2,734,130			$	2,280,495			$	11,205,770			$	11,515,192
Contingent consideration		-				-				-				(1,299,000	)
Research and development expenses		100,914				82,406				451,072				329,194
Total operating loss		2,835,044				2,362,901				11,656,842				10,545,386
Other (income)		(239,552	)			(208,183	)			(1,193,273	)			(447,074	)
Interest expense		-				-				-				236,699
Loss before income taxes		(2,595,492	)			(2,154,718	)			(10,463,569	)			(10,335,011	)
Income tax provision		65,331				47,079				51,465				166,265
Net loss	$	(2,660,823	)		$	(2,201,797	)		$	(10,515,034	)		$	(10,501,276	)
Net loss attributable to noncontrolling interest	$	(1,780,277	)		$	(1,555,010	)		$	(7,180,678	)		$	(7,757,688	)
Net loss attributable to Verde Clean Fuels, Inc.	$	(880,546	)		$	(646,787	)		$	(3,334,356	)		$	(2,743,588	)
Earnings per share
Weighted average Class A common stock outstanding, basic and diluted		6,336,078				6,153,461				6,286,033				6,140,529
Loss per share of Class A common stock	$	(0.14	)		$	(0.11	)		$	(0.53	)		$	(0.45	)

VERDE CLEAN FUELS, INC. CONSOLIDATED BALANCE SHEETS
	As of
	December 31, 2024				December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	19,044,067			$	28,779,177
Restricted cash		100,000				100,000
Accounts receivable – other		226,157				-
Other current assets		804,186				373,324
Total current assets		20,174,410				29,252,501
Non-current assets:
Property, plant and equipment, net		1,096,270				62,505
Intellectual property and patented technology		1,925,151				1,925,151
Operating lease right-of-use assets, net		215,806				524,813
Deposits		160,669				160,669
Total non-current assets		3,397,896				2,673,138
Total assets	$	23,572,306			$	31,925,639
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	734,374			$	184,343
Accrued liabilities		1,907,165				1,976,812
Operating lease liabilities		153,917				297,380
Other current liabilities		15,129				-
Total current liabilities		2,810,585				2,458,535
Non-current liabilities:
Promissory note – related party		-				409,612
Operating lease liabilities		78,245				232,162
Total non-current liabilities		78,245				641,774
Total liabilities		2,888,830				3,100,309
Commitments and Contingencies
Stockholders’ equity
Class A common stock, par value $0.0001 per share, 9,549,621 and 9,387,836 shares issued and outstanding as of December 31, 2024 and 2023, respectively		955				939
Class C common stock, par value $0.0001 per share, 22,500,000 shares issued and outstanding as of December 31, 2024 and 2023, respectively		2,250				2,250
Additional paid in capital		37,502,903				35,014,836
Accumulated deficit		(27,257,086	)			(23,922,730	)
Noncontrolling interest		10,434,454				17,730,035
Total stockholders’ equity		20,683,476				28,825,330
Total liabilities and stockholders’ equity	$	23,572,306			$	31,925,639

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250328314107/en/

Investor Relations:

Caldwell Bailey (ICR)

verdeIR@icrinc.com



Media Relations:

Juliet Fisher (Merchant)

juliet@merchant.agency

Source: Verde Clean Fuels, Inc.

FAQ

What was Verde Clean Fuels (VGAS) Q4 2024 financial performance?

Verde reported a Q4 2024 net loss of $(2.7) million, or $(0.14) per share, primarily due to ongoing general and administrative expenses.

How much did Cottonmouth Ventures invest in VGAS in January 2025?

Cottonmouth invested $50 million by purchasing 12.5 million shares of Verde's Class A common stock at $4.00 per share.

What is the status of VGAS's Permian Basin project development?

Verde is advancing FEED work for the natural gas-to-gasoline project, with $1.0 million in capitalized FEED costs as of December 31, 2024.

What is Verde Clean Fuels' (VGAS) cash position as of Q4 2024?

As of December 31, 2024, Verde had $19.0 million in cash and cash equivalents with no debt.

How much has Cottonmouth Ventures invested in VGAS over the past two years?

Cottonmouth has invested a total of $70 million in Verde over two years, becoming the company's second-largest shareholder.