Less Flaring, More Bitcoin: Startup Catches Eye of Halliburton Labs

Oil and gas operators have more associated gas than they can handle. The excess is often flared—an outcome benefitting no one.  

360 Energy, a startup that recently joined forces with Halliburton Labs, believes it has a solution.

The company’s answer is a Bitcoin mine. It’s actually 12 Bitcoin mines, so far all in Texas, and the collaboration with Halliburton raises the possibility of many more in the future.

CEO Chris Alfano and CFO Sean Milmoe started 360 Energy in 2021, then known as 360 Mining. They met at Southern Methodist University as freshmen and graduated in 2016. The duo’s first idea was to own their own wells.

“We put our first Bitcoin mine on our wells in the Barnett and realized it provides a lot of value to the broader oil and gas industry,” Alfano said in an interview with Hart Energy. “So we spun out a service company in 2023. We’ve been doing that now successfully for 18 months, deployed all over Texas, some big names, and excited to have Halliburton as an equity investor in our company now.”

Quick explanation of Bitcoin: It’s a digital currency that operates on a decentralized platform called a blockchain. Companies like 360 use sophisticated mathematical computing to add blocks to the chain, and the system pays them in Bitcoin. Over the past year, the value of 1 Bitcoin has ranged from about $39,000 to $107,000.

360 Energy sets up right at pad sites.

“You co-locate a natural gas generator—or many, depending on how much gas is available—that converts the natural gas into electricity, and then co-locate a shipping container, which is your data center, right next to that generator,” Alfano said. “There’s a ton of retrofitting going on, electrical and airflow and cooling technologies and all the rest of it.”

The gas that might otherwise have been flared goes into the generator, which powers the computers, which do the math, which results in Bitcoin.

Simple, right? Not exactly. Milmoe and Alfano had backgrounds in finance, but quickly learned they’d need more than spreadsheets to succeed.

“It looked like a home run in Excel, but it was anything but what Excel would’ve suggested,” Alfano said. “There’s so many facets to the operation.”

Among them: maintaining gas flow, volume and pressure to a generator operating around the clock; selecting generators and managing different types of gases; ensuring electrical compatibility of the generator and data center; and, of course, keeping servers cool and dust-free in the middle of West Texas.

“It took us two and a half years and many millions of R&D [dollars] in our infrastructure to reliably do this,” Alfano said.

For the well operators, 360 Energy offers two main options.

“We can just buy the gas from you for a fixed dollar per Mcf [thousand cubic feet] price, and we’re basically midstream, but we’re not going to pay you a lot for that, we might pay you only 50 cents,” Milmoe said. “Or you spend $2 million, we build it for you, we operate it for you, and then you are running your own gas through your own mine and you’re making $12/Mcf.”

There are also environmental benefits. In its marketing materials, 360 Energy says it’s far more efficient than flaring, removing up to 99% of methane emissions and 28% of volatile organic compounds.

The equity investment from Halliburton Labs, a wholly owned subsidiary of Halliburton, came about through a friend who received one of the company’s first investments a few years ago. The connection opens up a world of possibilities given Halliburton’s global presence.

“Abroad, the opportunity size is 50 times larger, when you look at the amount of assets being flared in places like Argentina, the Middle East, things like that,” Alfano said. “That’s where Halliburton can really help us, with all their clients in these areas where there’s infinite gas that’s just being wasted.”

The companies can take their cut in Bitcoin or dollars, Milmoe said, and some companies now want to hold the cryptocurrency as part of their financial strategy.

“We’re seeing this cataclysmic shift in understanding and acceptance and adoption, largely fueled by [President-elect] Trump and the ETFs [exchange-traded fund] and Bitcoin and all the positive tailwinds that are happening there,” he said. “It’s setting up for a really exciting 2025.”