![Riley Permian Increases Stake in West Texas Power JV with Conduit](/sites/default/files/styles/hart_news_article_image_640/public/image/2024/05/riley-permian-increases-stake-west-texas-power-jv-conduit.jpg?itok=bSD0nknh)
Conduit and Riley Permian initially created their RPC Power JV in March 2023 to own and operate power generation assets using the E&P’s produced natural gas to power its oilfield operations in Yoakum County, Texas. (Source: Shutterstock)
Conduit Power and Riley Exploration Permian agreed to expand the scope of their joint venture (JV), RPC Power, to build new power generation and storage assets for the sale of energy and ancillary services to Texas power grid operator ERCOT, or the Electric Reliability Council of Texas.
Riley Permian increased its ownership in RPC Power to 50% from 35% and agreed to sell up to 10 MMcf/d of natural gas to RPC Power as feedstock supply for the generation facilities, the companies said in a May 21 press release. Financial details were not disclosed.
Conduit and Riley Permian initially created their RPC Power JV in March 2023 to own and operate power generation assets using the E&P’s produced natural gas to power its oilfield operations in Yoakum County, Texas.
The expanded JV will enable RPC Power to initiate sales of dispatchable power and related services to ERCOT, with plans for 100 megawatts of natural gas fueled generation and battery energy storage systems across multiple facilities in West Texas, the companies said. The facilities are targeted for commercial operations throughout 2025.
In conjunction with the definitive agreements, Conduit, a portfolio company of Grey Rock Investment Partners, will operate the facilities and dispatch power into ERCOT through its qualified scheduling entity.
Riley Permian CFO Philip Riley said the JV 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," Riley said.
Travis Windholz, Conduit’s managing director, said the expanded JV represents a significant milestone for the company.
"Conduit's decentralized generation approach and focus on modularity prioritizes grid resiliency, flexibility and profitability in a rapidly changing power landscape,” he said. “Additionally, replacing inefficient legacy generation with more efficient mobile engine technology helps lower emissions on the grid and further enables energy transition."
Sidley Austin LLP served as legal advisor for Conduit and Kirkland & Ellis LLP served as legal advisor for Riley Permian.
Recommended Reading
Solaris Stock Jumps 40% On $200MM Acquisition of Distributed Power Provider
2024-07-11 - With the acquisition of distributed power provider Mobile Energy Rentals, oilfield services player Solaris sees opportunity to grow in industries outside of the oil patch—data centers, in particular.
Liberty Energy Warns of ‘Softer’ E&P Activity to Finish 2024
2024-07-18 - Service company Liberty Energy Inc. upped its EBITDA 12% quarter over quarter but sees signs of slowing drilling activity and completions in the second half of the year.
Quantum’s Wil VanLoh on Turning ESG into E$G
2024-05-21 - Wil VanLoh, founder and CEO of Quantum Energy Partners said private companies need to change their mindset on ESG because they’re building a product to sell to public companies — and may be missing out on cost savings.
Halliburton Sees NAM Activity Rebound in ‘25 After M&A Dust Settles
2024-07-19 - Halliburton said a softer North American market was affected by E&Ps integrating assets from recent M&A as the company continues to see international markets boosting the company’s bottom line.
Offshore, Middle East Buoys SLB’s 2Q as US Land Revenue Falls
2024-07-19 - Driven by a strong offshore market and bolstered by strategic acquisitions and digital innovation, SLB saw a robust second quarter offset by lower drilling revenue in the U.S.