Absolute Return Podcast · Accelerate Financial Technologies Inc.

#242 - 2022 Dealmaker of the Year, Danny Rice

·34 min·3 clips

Danny Rice explains how Arkea Energy grew into the largest RNG developer globally before its $4.1 billion sale to BP.

Danny Rice, the 2022 Dealmaker of the Year, joins hosts Julian Klymochko and Michael Kesslering to discuss his recent SPAC successes and new ventures. Rice was CEO of Rice Acquisition Corp. 1, which merged with landfill gas developer Archaea Energy and later sold it to BP for $4.1 billion. He is now leading Rice Acquisition Corp. 2 in a $1.5 billion merger with clean energy technology company Net Power. The conversation details the Archaea Energy deal, which sold at a 160% premium to its SPAC price after becoming the world's largest developer of renewable natural gas. Rice explains Net Power's technology, which uses natural gas in an oxy-combustion process to generate electricity while capturing over 97% of CO2 emissions. He outlines a market potential of 17,000 plant deployments globally to replace existing coal and gas infrastructure. Key financial details include a projected $85 per ton U.S. federal credit for sequestered CO2, generating nearly $70 million annually per plant, and a licensing model valuing each deployment at roughly $65 million for Net Power. A surprising claim is that until this deal, 90% of prospective investors had never heard of Net Power's technology. Rice argues that existing clean energy pushes have compromised reliability and cost, creating a demand for what he calls the "energy trifecta": clean, low-cost, and reliable power. He asserts that natural gas, with over a century of U.S. reserves, is the ideal feedstock for this transition when paired with carbon capture. An interesting strategic shift is Rice's decision to become Net Power's CEO post-merger, a rare move for a SPAC sponsor, to apply his playbook for scaling energy companies. The discussion reveals Rice's personal motivation stems from seeing U.S. CO2 emissions drop due to increased natural gas use and feeling a "moral obligation" to apply his skills to decarbonization. He positions Net Power as a bipartisan solution to energy and climate goals, contrasting it with European struggles that have reactivated coal plants. The licensing business model is highlighted as capital-light, with the company's valuation underpinned by securing a project backlog ahead of its first commercial plant in 2026. The tone is conversational and educational, blending deal analysis with technology explanation and macroeconomic commentary. The hosts facilitate a detailed, optimistic exploration of Rice's track record and future plans. This episode would appeal to investors interested in SPACs, energy infrastructure, and climate technology, particularly those seeking narratives of successful business execution in decarbonization. Listeners skeptical of natural gas's role in the energy transition or seeking near-term revenue stories might find it less compelling.

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