- Technology-driven flare mitigation provider Crusoe Energy Systems announced that it raised $30 million in equity funding and $40 million in project financing
Crusoe Energy Systems — a technology-driven flare mitigation provider — announced that it raised $30 million in equity funding and $40 million in project financing for a total of $70 million in new capital targeting the rapid expansion of Crusoe’s proprietary Digital Flare Mitigation (DFM) technology and services.
The $30 million equity round of funding was led by existing investor Bain Capital Ventures and new investor The KCK Group with additional participation from Founders Fund, Winklevoss Capital and Polychain Capital. And the $40 million project financing was led by New York-based credit fund Upper 90. Bain Capital Ventures and KCK Group will be joining the Crusoe board along with the company’s co-founders.
Crusoe has flare mitigation projects operating in Wyoming’s Powder River Basin oilfield, Colorado’s Denver-Julesburg oilfield and North Dakota and Montana’s Bakken oilfield.And the systems are scalable up to millions of cubic feet per day and can be deployed anywhere in the United States or Canada.
Natural gas flaring has become a pain point for shale oil producers — which produce natural gas as a byproduct of oil. And this oil-associated natural gas production has outpaced gas pipeline infrastructure in many parts of the North American shale boom.
Due to the absence of adequate pipeline capacity, operators tend to burn natural gas in a process known as “flaring” or “combusting.” About 497 billion cubic feet of natural gas are flared annually in the United States, according to data from the World Bank’s Global Gas Flaring Reduction Partnership (GGFR). This is enough gas to power more than 10 million U.S. homes. And flaring generates pushback from the public and policymakers — who increasingly raise environmental concerns around resource waste, visual impacts, and air quality.
Crusoe combines technology-empowered solutions with one of the modern oil industry’s greatest environmental challenges — which is the flaring of natural gas. And Crusoe uses natural gas that would have otherwise been burned in the air as a “flare” and instead powers modular and mobile computing systems designed specifically for the oilfield. Along with reducing waste, this solution also helps energy companies to significantly reduce emissions.
Crusoe’s DFM modules are already reducing flaring for public and private energy producers and have operated with high reliability across multiple states through harsh “bomb cyclone” winters and record-setting summer heatwaves. And Crusoe has agreed to the deployment of up to 40 DFM systems through the first half of 2020 with a view towards further growth thereafter. Plus Crusoe systems are expandable from tens of thousands of cubic feet per day up to multiple millions of cubic feet per day, meeting the challenges of remote oilfield operations.
Along with reducing resource waste and the visual impacts of flaring, Crusoe’s DFM systems generate significant emissions benefits including large reductions of NOx, CO, volatile organic compounds (VOCs) and methane.
Crusoe CEO and co-founder said that this announcement “paves the way for Crusoe to deliver the energy industry with a scalable solution for the natural gas flaring challenge.”
Crusoe’s team combines oil and gas operations veterans with decades of experience in the oil patch alongside top-tier technology developers who are building the future of distributed cloud computing.
“Crusoe has demonstrated its capability for high-caliber, safe and efficient operations since we led the team’s seed financing in early 2019,” added Stefan Cohen, principal at Bain Capital Ventures. “Over this time, we’ve gained confidence in Chase, Cully and the growing Crusoe team, and strongly believe in their ability to tackle the energy industry’s flaring dilemma in this next stage of company growth. There is now a proven and scalable alternative to flaring, and Crusoe’s trajectory is also poised to produce exciting new cloud computing resources for the technology industry.”