Riley Exploration Permian, Inc. and Conduit Power, LLC ("Conduit"), a portfolio company of Grey Rock Investment Partners ("Grey Rock"), announced that they entered into definitive agreements to form a joint venture that will own and operate on-site power generation utilizing captured flared natural gas (the "Project") to power Riley Permian's operations in Yoakum County, Texas. The Project will be completed in phases and will ultimately include 20 megawatts ("MW") of power. Phase 1 of the Project will provide 10 MW of on-site generation and is expected to be operational by June 2023, with an additional 10 MW in Phase 2 anticipated to be operational by late 2023 or early 2024.
Improve Operations: Unreliable power quality can lead to lost revenue from production downtime and/or costly repairs. The new power infrastructure is expected to improve Riley Permian's operating resiliency with a consistent, baseload power source in an increasingly intermittent power grid.
Control Costs: Vertically integrating Riley Permian's power need with a behind-the-meter solution will allow Riley Permian to better manage its long-term energy costs.
Reduce Flaring and Emissions: At the completion of both phases, the Project will capture a substantial amount of natural gas currently flared, thereby allowing Riley Permian to reduce its CO2 emissions.
"We sought Conduit as an aligned partner based on their expertise, which will help us navigate the complexities of the power industry," said Bobby Riley, CEO of Riley Permian. "Their team's depth of experience offered us a turnkey solution, including design, procurement, build and implementation. We believe this Project is indicative of the types of creative initiatives we pursue as a company, including those that enable higher operational control and situations that turn challenges into opportunities."
"We are excited to partner with Riley Permian and look forward to building and operating this new infrastructure that allows them to grow their operations in the Permian Basin," said Matt Whitaker, Conduit Managing Director. "Our customers benefit from controlling critical infrastructure, such as electric power, as a means to improving costs and operational efficiency. At Conduit, we provide a total power solution that enables our customers to increase reliability, lower power costs and reduce carbon emissions."
Kirkland & Ellis served as legal advisor for Riley Permian and Locke Lorde served as legal advisor for Conduit.