Company: VGASW
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001628280-25-040155
Chunk: 61

Company: Verde Clean Fuels, Inc.
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 2
Chunk 61
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 our Annual Report on Form 10-K for the year ended December 31, 2024. We believe the factors described below are key to our success.

Commencing and Expanding Commercial Operations

A critical step in our business strategy will be the successful construction and operation of the first commercial production plant using our patented STG+® technology. 

Concurrent with the Business Combination, Diamondback, through its wholly-owned subsidiary, Cottonmouth, made a $20 million equity investment in Verde and entered into the Existing Equity Participation Right Agreement pursuant to which Verde must grant Cottonmouth the right to participate and jointly develop natural gas-to-gasoline plants in the Permian Basin utilizing Verde’s STG+® technology and associated natural gas from Diamondback's operations. Diamondback is an independent oil and natural gas company headquartered in Midland, Texas, focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. The production of gasoline from associated natural gas from Diamondback's operations in the Permian Basin is designed to allow Diamondback to mitigate the flaring of natural gas while also producing a high-margin product from natural gas streams that are subject to being economically disadvantaged.

In February 2024, Verde and Cottonmouth entered into a joint development agreement ("JDA"), which provides a pathway forward for the proposed development, construction, and operation of a facility to produce commodity-grade gasoline using 

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natural gas feedstock supplied from Diamondback’s operations in the Permian Basin (the “Permian Basin Project”). The JDA frames the contracts contemplated to be entered into between the parties and outlines the conditions precedent for the parties to enter into definitive documents and achieve final investment decision (“FID”) to proceed with the Permian Basin Project. The JDA conditions precedent include finalizing applicable project contracts, obtaining necessary permits, obtaining project financing on terms satisfactory to each party, and receiving FID by each party.

In June 2024, we entered into a contract with Chemex Global, LLC ("Chemex") for a front-end engineering and design ("FEED") study related to the Permian Basin Project. Completing the FEED study is a key requirement to achieving FID. In January 2025, we identified a new site for the Permian Basin Project with improved access to key utilities. To date, we have continued to advance development activities related to the Permian Basin Project, including the FEED study. 

Upon satisfaction of the JDA conditions precedent and achieving