Gevo Inc. (GEVO) stock prices surged by 35.40% some time after market trading commenced on September 9th, 2021. This brought the price per share up to USD$7.84 early on in the trading day.
GEVO Stock Partners with Chevron
September 9th, 2021 saw GEVO stock announce a letter of intent to jointly invest in the building and operation of at least one new facility. The agreement was signed with Chevron U.S.A. These facilities will be designed to process inedible corn to produce sustainable aviation fuel. This is expected to lower the lifecycle carbon intensity of fuels used in the aviation industry. The new facilities would also produce proteins and corn oil.
Scope of Collaboration
The pending partnership will see GEVO stock operate its proprietary technology to produce sustainable aviation fuel and renewable blending components for motor oil. This will facilitate a reduction in lifecycle carbon intensity. As per the agreement, Chevron would be entitled to offtake roughly 150 million gallons every year to market to customers. This is in addition to the possibility of co-investing with Gevo in additional projects.
Synergistic Partnership
The partnering company is facilitating the provision of next-gen renewable fuels for GEVO stock’s customers. The upcoming investment will see the leveraging of the company’s unique approach to producing sustainable aviation fuel. This will complement other renewable fuels investments that the company is making as a part of its higher returns, lower carbon strategy. The collaboration will help develop the company’s capacity to produce renewable, high-performing hydrocarbons. These can be used in existing equipment and engines.
Finalizing the Transaction
Chevron’s leading market position will facilitate the offtaking of production from the venture. This will help to place sustainable aviation fuel with airline customers. The pending collaboration is subject to the negotiation of definitive agreements between the involved parties, as well as regulatory approval. As it stands, Chevron is currently on of the world’s leading integrated energy companies. The collaboration is set to expand the scope of both GEVO stock and its partnering company.
Future Outlook for GEVO Stock
The company reported a promising quarter, topped off with its recent letter of intent to collaborate with Chevron. GEVO stock is poised to capitalize on the opportunities afforded to it as a result of the pending partnership. Current and potential investors are hopeful that management will be able to leverage the resources at their disposal. This is hoped to facilitate significant and sustained increases in shareholder value.
