HOUSTON and OKLAHOMA CITY, May 21, 2024 /PRNewswire/ -- Conduit Power, LLC ("Conduit") and Riley Exploration Permian, Inc. ("Riley Permian") today announced that they entered into definitive agreements to expand the scope of their joint venture, RPC Power, LLC ("RPC Power"), to build new power generation and storage assets for the sale of energy and ancillary services to ERCOT, the Texas power grid operator.
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RPC Power was created in March 2023 to own and operate power generation assets that use Riley Permian's produced natural gas to power its oilfield operations in Yoakum County, Texas. The expanded scope will enable RPC Power to initiate sales of dispatchable power and related services to ERCOT, with plans for 100MW of natural gas fueled generation and battery energy storage systems across multiple facilities in West Texas. The facilities are targeted for commercial operations throughout 2025.
In conjunction with the agreements, Conduit will operate the facilities and dispatch power into ERCOT through its qualified scheduling entity. Riley Permian increased its ownership in RPC Power from 35% to 50% and has agreed to sell up to 10 MMcf/d of natural gas to RPC Power as feedstock supply for the generation facilities.
"Our JV expansion at RPC Power represents a significant milestone for our company, and we are proud to build upon our successful partnership with Riley Permian," said Travis Windholz, Conduit Managing Director. "Conduit's decentralized generation approach and focus on modularity prioritizes grid resiliency, flexibility and profitability in a rapidly changing power landscape. Additionally, replacing inefficient legacy generation with more efficient mobile engine technology helps lower emissions on the grid and further enables energy transition."
Riley Permian CFO Philip Riley added, "We're excited for this new phase of our power development effort with Conduit. This project aims to capitalize on West Texas market dynamics including abundant, associated natural gas production, gas midstream egress limitations and shortfalls of dispatchable, reliable power. We see an opportunity to achieve value uplift with our natural gas, diversify our revenue mix and invest in power markets with attractive fundamentals."
Advisors Sidley Austin LLP served as legal advisor for Conduit and Kirkland & Ellis LLP served as legal advisor for Riley Permian.
About Conduit Power Conduit Power builds and operates distributed power generation resources. Conduit, through its Conduit Core and Conduit Edge solutions, allows customers to co-locate power generation near their operations and to sell power to the market, as a producer. Conduit is a portfolio company of Grey Rock Investment Partners. For more information, please visit www.conduitpower.co.
About Riley Permian Riley Permian is a growth-oriented, independent oil and natural gas company focused on the acquisition, exploration, development and production of oil, natural gas, and natural gas liquids. For more information, please visit www.rileypermian.com.
About Grey Rock Investment Partners Grey Rock Investment Partners is a private equity firm with more than $1.0 billion in asset value across its private equity fund platform. The firm invests across the energy value chain with private equity funds focusing on investments in natural resources, carbon capture, industrial electrification, and power optimization. For more information, please visit www.grey-rock.com.
Media Contacts: Conduit Power Bevo Beaven Bevo@Redbirdpr.com 720-666-5064
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. The statements contained in this release that are not historical facts are forward-looking statements that represent management's beliefs and assumptions based on currently available information. Forward-looking statements include any statements regarding the expected timetable, the results, effects, benefits and synergies of the transaction, future opportunities, future financial performance and condition, guidance and any other statements regarding Riley Permian's and Conduit's future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance. Forward-looking statements do not consider the effects of future legislation or regulations. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words "believes," "intends," "may," "should," "anticipates," "expects," "could," "plans," "estimates," "projects," "targets," "forecasts" or comparable terminology and the negatives thereof or by discussions of strategy or trends. You should not place undue reliance on these forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and assumptions. Moreover, Riley Permian and Conduit operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible to predict all risks, nor can the impact of all factors on the transaction or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements, be assessed. Although the parties believe that the plans, intentions and expectations reflected in or suggested by the forward-looking statements made in this release are reasonable, there can be no assurance that these plans, intentions or expectations will be achieved or occur, and actual results could differ materially and adversely from those anticipated or implied by the forward-looking statements.
Among the factors that could cause actual future results to differ materially are those associated with general economic and business conditions; the risk that this project may not perform as expected or produce the anticipated benefits; changes in commodity prices; changes in the costs and results of operations; higher inflation and related impacts; material reductions in corporate liquidity and access to debt markets; uncertainties about estimates of reserves; changes in government environmental policies and other environmental risks; increased burden and/or inability to comply with existing or future energy regulations, requirements or standards, including those imposed by ERCOT; the availability of drilling equipment and the timing of production; tax consequences of business transactions; public health crises, such as pandemics (including coronavirus (COVID-19)) and epidemics, and any related government policies and actions and the effects of such public health crises on the oil and natural gas industry, pricing and demand for oil and natural gas and supply chain logistics; the competitiveness of alternate-energy sources or product substitutes; development of large carbon capture and offset markets; regional supply and demand factors, any delays, curtailment delays or interruptions of production, and any governmental order, rule or regulation that may impose production limits; cost and availability of gathering, pipeline, refining, transportation and other midstream and downstream activities; risks relating to operations, including development drilling and testing results and performance of acquired properties and newly drilled wells; risks associated with concentration of operations in one major geographic area; legislative or regulatory changes, including initiatives related to hydraulic fracturing, emissions, and disposal of produced water, which may be negatively impacted by regulation or legislation; the ability to receive drilling and other permits or approvals and rights-of-way in a timely manner (or at all), which may be restricted by governmental regulation and legislation; and risks related to litigation. Additional risks and assumptions that could cause results to differ materially from those described above can be found in Riley Permian's 2023 Annual Report on Form 10-K and in subsequent filings with the Securities Exchange Commission ("SEC"), which are also available from its website at www.rileypermian.com under the "Investor" tab, and in other documents Riley Permian files with the SEC.
The forward-looking statements in this press release are made as of the date hereof and are based on information available at that time. Neither Riley Permian, Conduit, nor Grey Rock undertake, and expressly disclaim, any obligation or duty to update or revise any forward-looking statements based on new information, future events or otherwise.
