Closely followed environmental play Zefiro Methane Corp [Cboe Canada:ZEFI] has now listed its shares on OTCQB in the US under the ticker ZEFIF.
The Canada-based company is a specialist in the containment of methane leaks, which are harmful to the Earth’s atmosphere and major contributor to global warming.
Zefiro had its IPO in Canada on the Cboe. The OTCQB listing is the company’s third such listing in under three months and brings the stock to a wider audience of US and international investors.
What makes Zefiro Methane a green stock?
Zefiro Methane is working to address a massive environmental issue within the US, namely orphaned wells, oil and gas wells that are now disused but continue to leak methane into the atmosphere, day and night.
It is an issue that has been recognised by the US Department of the Interior, which reckons that millions of Americans live just one mile from an abandoned coal mine or orphaned oil or gas well. The problem has been recognised by the Biden administration, which has passed a bipartisan law to provide infrastructure funding worth USD 4.7bn to help plug wells and reduce methane emissions.
There are significant environmental and health issues here. It is estimated that there are more than 3.7m abandoned oil and gas wells in the US.
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The scale of the problem is difficult to see: the orphaned wells are hard to detect as there is little legacy infrastructure left on the surface, and methane emissions require specialist equipment to locate.
This is where Zefiro Methane comes in. The company has the kit and the know how to go out into the field and locate and plug orphaned wells. Such is the scale of the problem that Zefiro has more than enough to keep it busy in just the Appalachia region, where there has been a surfeit of coal mining and oil drilling in the last 100 years.
How does Zefiro Methane make its money?
Plugging wells creates carbon credits for the company, which can then be sold to specialist energy traders who are now active in building the carbon credits market globally. Zefiro has already secured sales with EDF Trading and Mercuria Energy America. This is thanks to the expertise of its management team in working across the evolving carbon credits market.
Carbon credits sales are being led by the company’s CCO Tina Reine, who has a sterling track record in the carbon market going back to a stint with Cantor Fitzgerald in London starting in 2007. She also helped to build the carbon credits trading business at JP Morgan.
These methane offsets are considered as high quality within the carbon credits market and have been successfully registered on the American Carbon Registry. In turn this is contributing to immediate post-IPO revenues for Zefiro, which is already profitable, with revenues of USD 8.5m reported (30% gross profit margin).
Zefiro subsidiary Plants & Goodwin is already active in West Virginia, a target state because of the high concentration of orphaned wells there. It has expanded its facility there as it taps into the USD 29m allocation of government funding available to address the issue in the state. West Virginia has an estimated 6,300 orphaned oil and gas wells.
