August 2023

August 23, 2023 01:15 PM Eastern Daylight Time

MARINA DEL REY, Calif.–(BUSINESS WIRE)–Rubicon Carbon, a next generation carbon solutions provider, and Freepoint Commodities today announced they have entered into an agreement with Imperative Global (“Imperative”) for the development, financing, and marketing of up to $500 million of Imperative’s high-quality carbon projects.

The Voluntary Carbon Market (VCM), currently valued at $2 billion, is anticipated to surge to around $250 billion by 2050. The collaboration between Rubicon Carbon, Freepoint Commodities, and Imperative signifies a shared commitment to drive quality within the VCM and introduce institutional-scale capital to finance the development of next generation, large-scale projects.

“We are proud to partner with Imperative as they continue to scale their business and pipeline. By emphasizing quality and introducing institutional-scale capital to large projects, we are setting new market standards. Our strategic partnership puts us in position to help progress the Voluntary Carbon Market through a focus on integrity and quality. Rubicon Carbon has always sought to collaborate with the best developers worldwide, and our commitment to this partnership reflects that aspiration,” said Chris Brown, Head of Rubicon Carbon Capital, the company’s project financing arm. Rubicon Carbon Capital partners directly with project developers to catalyze the implementation of new, high integrity carbon projects.

“At Imperative we believe that, by applying the rigor, discipline, processes and technology associated with large-scale projects in more mature sectors, we can deliver scale and address the issue of quality at the source – on the ground where project activities are occurring. This collaboration with Rubicon Carbon and Freepoint Commodities brings together institutional capital, specialized carbon know-how and deep, large-scale projects expertise. Our goal is to work together to develop best-in-class projects with sector-defining quality and scale,” said Scobie Mackay, CEO of Imperative.

The parties have joined forces on large-scale nature-based removals projects and impactful initiatives in the Global South. Every dollar of capital invested in these projects is intended to yield meaningful climate, biodiversity, and community benefits. Imperative’s project portfolio will span Africa, Asia, and Latin America, with a focus on native-species reforestation, mangrove restoration, and large-scale agroforestry. The parties firmly believe in the use of the VCM to drive a just transition, with projects designed to create transformative benefits for local communities. Through this collaboration, the aim is to generate over 100 million tCO2e of high-quality Verra and/or Gold Standard carbon credits, in addition to substantial co-benefits for biodiversity and other sustainable development goals.

“As Freepoint Commodities continues to grow its global voluntary carbon business we are investing in high-quality, high integrity projects and project developers. As part of this strategy, we are excited to support Imperative in their mission to become a market leader in the space. This strategic collaboration brings together a unique combination of sector expertise that will enable Imperative to develop an impactful portfolio at the necessary pace and scale, while expanding the suite of products and services Freepoint offers to its customers,” said Andrew Hallett, Senior Managing Director at Freepoint Commodities.

About Rubicon Carbon

With a vision to help the world’s largest enterprises meet their decarbonization goals, Rubicon Carbon works to meet the growing demand for high integrity carbon credits. Backed by TPG Rise Climate and led by top finance and science executives, Rubicon Carbon sources, validates, risk-adjusts and actively manages diversified carbon credit portfolios. We bring enhanced transparency and quality controls to carbon credits so companies can navigate the process with confidence.

About Freepoint Commodities

Founded in 2011, Freepoint is a global commodities merchant providing customers with physical supply and logistics chain management and services, together with eco-friendly products. Freepoint actively pursues strategies to promote the transition to renewable energy, as well as investments in new technologies and businesses which support the energy transition. Freepoint’s voluntary carbon business provides a full suite of market solutions to VCM market participants, ranging from investing in high-quality voluntary carbon projects and platforms to providing structured solutions and risk management services that unlock value for our customers and stakeholders.

About Imperative Global

Imperative is committed to advancing carbon credit project development, operations, and the production of high-quality carbon credits. With expertise in carbon markets, conservation projects, and project execution, Imperative focuses on emerging markets and scalable project types. By taking a hands-on approach to project development and importing knowledge from other sectors, Imperative aims to address quality issues in voluntary carbon markets at the source. Our mission is to design, develop, and operate, at scale, the best carbon credit projects in the world and to optimize those projects using technology.

Contacts

Rubicon Carbon:
nicole@rubiconcarbon.com

Freepoint Commodities:
paige.thornton@rfbinder.com

Imperative Global:
info@imperativeinc.com

Permian Resources Corp., an oil producer founded by a pair of 30-something University Park natives, is acquiring Earthstone Energy Inc. in an all-stock takeover valued at about $4.5 billion.

It’s the latest deal for Will Hickey and James Walter, the co-chief executive officers of Midland-based Permian Resources who have built up the company into a major independent U.S. shale operator via a series of mergers in recent years.

The “shalennials” took over the helm of Permian Resources in September after a $7 billion merger between private equity-backed Colgate Energy, which they ran for seven years, and publicly-traded Centennial Resource Development Inc.

The takeover of Earthstone will give Permian Resources a pro-forma production of about 300,000 barrels of oil equivalent per day, the companies said Monday in a statement. The transaction is expected to close by year-end.

Permian Resources and Earthstone operate an 11-rig drilling program in aggregate, primarily focused on the Delaware Basin of West Texas and southern New Mexico.

“After evaluating over $20 billion of potential transactions during the past 12 months, we firmly believe the acquisition of Earthstone represented the best transaction for Permian Resources,” Walter said in a statement. “It checks all the boxes.”

When Hickey and Walter took charge at Permian Resources, they forecast a 10% increase in shale oil production. They said at that time they had a key competitive advantage by focusing exclusively on the Delaware Basin in Texas, the western and less developed part of the larger Permian Basin, America’s biggest oilfield.

“If the U.S. is going to grow production, it’s going to be on the back of the Delaware Basin,” Walter told Bloomberg.

The Delaware, especially near the Texas-New Mexico border, is the country’s lowest-cost major production zone and has the highest number of top-quality well locations left to drill, according to S&P Global Commodity Insights. Initially, operations there were much costlier than in the Midland Basin, the eastern part of the Permian, because the area lacked infrastructure like pipelines and storage tanks, deterring some producers.

“The Delaware has more room to run and more top-tier undeveloped inventory than any other basin,” Walter said.

Hickey and Walter started Colgate in 2015 while in their late 20s, just after the oil price crashed as OPEC flooded the market with crude in a bid to wrestle back control from the nascent U.S. shale industry. With backing from Texas-based private equity firms Pearl Energy Investments and NGP Energy Capital, they named their new company after the road they grew up on and moved it to Midland.

They quickly saw an opportunity for leasing acreage for shale oil development around the city of Pecos in West Texas. “The Delaware was really in its infancy back then,” said Billy Quinn, managing director of Pearl.

Hickey and Walter, both graduates from the University of Texas at Austin, assembled contiguous blocks of land that could be used for horizontal drilling and started up their first rig in 2017. When COVID-19 hit in 2020, the company benefited from a strong balance sheet made up of low debt and hedges that helped offset the plunge in oil prices, allowing it to make four acquisitions at the end of 2020 and in 2021.

The merger with Centennial marks a return of more than eight times the roughly $270 million invested in Colgate in three tranches.

“I’m not sure anybody has delivered the type of returns they have over the last six or seven years, especially on the large volume of dollars invested,” Quinn said. “There’s still a long way to go with this company. They’re not done yet.”

Simon Casey and Kevin Crowley, Bloomberg

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