(Reuters) – Shares of Archaea Energy jumped as much as 9.2% on the largest U.S. renewable natural gas producer’s debut on the New York Stock Exchange on Thursday, a sign of rising investor support for alternative, cleaner sources of energy.
Archaea, which went public by merging with the blank-check firm Rice Acquisition Corp in a $1.15 billion deal, closed at $19.95 on Thursday, up from the $18.27 price the SPAC’s shares traded at on Wednesday.
Renewable natural gas (RNG), produced from animal farms and landfills, has seen a massive surge in demand this year as climate conscious investors push for cleaner energy sources.
Due to the demand, RNG sells at a premium to natural gas and numerous companies like oil major Chevron Corp and power provider NextEra Energy have announced projects focusing on this renewable gas.
Archaea is exploring partnerships with waste industry participants, like landfill owners, and with traditional oil and gas companies, Chief Executive Officer Nick Stork told Reuters in an interview.
“We’re also exploring partnerships with natural gas utilities in the U.S. and abroad, and I think generally what you’re hearing or seeing is that our counterparties want to be part of the solution,” Stork said.
The company has laid out targets to keep 70% of its production locked in so-called ‘long-term fixed pay’ contracts that are safe from fluctuations in the spot markets, though the target level is just to keep the company’s options open.
“We could put all of our volumes (in long-term contracts) today. We’ve got enough demand… It’s a matter of us wanting to retain a certain level of optionality around a percentage of our volumes,” said Eric Javidi, Archaea’s Chief Financial Officer.
Source: Read Full Article