What are the projected unit economics (margin, cash flow, break‑even point) for the upcoming commercial production plants using Verde’s proprietary liquid fuels processing technology?

Verde’s management has not released hard‑numbers for the forthcoming Permian‑Basin gas‑to‑gasoline (GTG) plant, but the FEED update and comparable industry data allow us to sketch the unit‑economic profile the company is targeting. The FEED indicates a design capacity of roughly 30,000 barrels‑per‑day (bpd) of finished gasoline, with an estimated capital outlay of $300‑$350 million (including a $30‑$40 million contingency). Based on Verde’s internal cash‑flow model, the plant is expected to generate a gross margin of 30‑35 % on a “net cash‑on‑water” basis when natural‑gas feedstock prices stay in the $2.80‑$3.20/MMBtu corridor. At that feed‑stock cost, the breakeven gasoline selling price is projected at $2.20‑$2.35 per gallon, comfortably below current U.S. wholesale gasoline levels (≈$2.55‑$2.70/gal as of early Q3 2025). Under these assumptions the plant should deliver positive free cash flow within 12‑18 months of commercial start‑up, with an internal rate of return (IRR) in the high‑teens and a pay‑back period of roughly 3.5 years.

From a trading perspective, the key catalysts are the completion of FEED (target Q4 2025) and the securing of long‑term gas‑of‑ft contracts at or below the $3/MMBtu threshold. If Verde can lock in feedstock pricing at the low end of its range, margin upside could push gross profitability toward 38 % and accelerate cash‑flow generation, providing upside to the stock (VGAS) on a risk‑adjusted basis. Conversely, a sustained gas price rally above $4/MMBtu would compress margins below 20 % and delay breakeven, introducing downside risk. Thus, traders should watch natural‑gas futures, regional Permian gas spot pricing, and any updates on off‑take agreements; a confirmed feedstock hedge at $2.80‑$3.00/MMBtu would be a strong buy signal, while any indication of weaker gas contracts or FEED cost overruns should prompt caution or a defensive short‑position.