Fervo Energy believes it can make carbon-free geothermal power a foundational component of the global energy system. The Houston company said horizontal drilling, fiber-optic sensing and advanced reservoir engineering have allowed it to establish a repeatable, industrial approach to building firm, utility-scale power.
On May 11, Fervo Energy announced plans to price its initial public offering of 70 million shares between $25 and $26 a share; and that size and price range were up from the originally proposed 55.6 million shares between $21 and $24 each. Fervo also granted underwriters an option to purchase another 10.5 million shares.
When the IPO priced at $27 a share on May 12, the company netted $1.89 billion with a valuation of about $7.7 billion. The shares began trading May 13 on Nasdaq under the symbol “FRVO” and immediately climbed by more than 33 percent pushing the company’s market capitalization past $10 billion. The shares were trading as high as $42.20 on Friday morning.
In March, The CDT Roundup reported on Fervo Energy’s $421 million in debt financing for the first phase of its flagship Cape Station development in Beaver County, Utah, that will begin delivering power to the grid this year. Fervo projects the facility reaching about 100 megawatts by early 2027, with plans to scale to 500 MW.
Gustavo Torres is Fervo Energy’s general counsel. The company used Latham & Watkins as outside legal counsel led by Houston partners Ryan Maierson, Nick Dhesi and John Slater. Joshua Marnitz and Christine Mainguy were the only other Texas lawyers on the team of about two dozen.
The company said it has power purchase agreements with Southern California Edison, Shell Energy, and community choice aggregators. Fervo has also received funding from shale producer Devon Energy, Breakthrough Energy Ventures, which is the investment firm of Bill Gates, and Google parent company Alphabet.
There were more than a few underwriters for the IPO led by J.P. Morgan, BofA Securities, RBC Capital Markets and Barclays as joint lead bookrunning managers.
Vinson & Elkins advised these underwriters with a team led by Houston Partners Sarah Morgan and Jackson O’Maley. Morgan also works from Denver. The V&E team included Counsel Alex Lewis, Senior Associate Walt Baker and associates Lauren Perillo, Rachel Campbell Alexander and Joshua Payne all of whom work in Houston.
The other bookrunning managers for the IPO included Baird, BBVA, Guggenheim Securities, MUFG, Societe Generale, William Blair, Piper Sandler, and Wolfe | Nomura Alliance.