Notes

NOTES

1. A deliver-or-pay agreement binds the oil company to deliver a guaranteed volume of associated gas or pay penalties. 2. Currency risk is particularly evident in FMR projects that sell the end-product in local currency but—in most cases—purchase associated gas in US dollars. 3. For more information, see the Hoerbiger website (https://www.hoerbiger.com/en-3 /pages/549). 4. Revenue split provided by Hoerbiger executives interviewed. Unless otherwise noted, other data in this case study also come from interviews. 5. It must be noted, however, that flaring fines are not in place in Ecuador, despite the Zero

Routine Flaring 2030 commitment. 6. In some cases, the projects involve the recovery and overhaul of stranded/unused assets of the customer instead of new equipment reducing sunken cost. 7. The US$0.20/kWh cost includes fuel and operation and maintenance costs; US$0.26/kWh represents the cost of incremental diesel generation capacity, including capex in addition to the aforementioned costs. 8. The actual figure is confidential. 9. Unless otherwise stated, the information provided in this case study is sourced from interviews with Galileo’s management, a presentation provided by management, and Galileo’s website. 10. The lower the atmospheric temperature, the longer the container storage period. 11. The process of creating new Bitcoins by solving computational puzzles. 12. FromtheUSEnergyInformationAgency’s“EnergyExplained:ElectricityintheUnitedStates” web page (https://www.eia.gov/energyexplained/electricity/electricity-in-the-us.php). 13. For instance, North Dakota has increasing gas capture requirements over time that could force operators to curtail oil production if they do not meet the gas capture percentage (https://www.dmr.nd.gov/oilgas/GuidancePolicyNorthDakotaIndustrial

Commissionorder24665.pdf ). New Mexico has recently announced a new rule that requires operators to reach 98 percent gas capture by 2026 (Executive Order 2019-003,

Energy, Minerals and Natural Resources Department of New Mexico). 14. Executive Order on Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis, January 2021 (https://www.whitehouse.gov/briefing-room /presidential-actions/2021/01/20/executive-order-protecting-public-health-and -environment-and-restoring-science-to-tackle-climate-crisis/). 15. North Dakota Bill SB 2328, signed into law by the governor on April 13, 2021 (https://www .legis.nd.gov/assembly/67-2021/bill-actions/ba2328.html and https://www.legis.nd.gov /assembly/67-2021/documents/21-0935-05000.pdf). 16. Unless otherwise stated, the information in this case study was provided by Crusoe’s management. 17. As of May 2021, only one of Crusoe’s sites has an HPC data center in addition to Bitcoin mining. The company expects to grow the HPC business significantly in 2021. Not all sites are suitable to HPC, because the smooth running of operations requires redundant power (or grid backup) and enhanced networking. 18. Bitcoin miners used advanced computers to solve complex math problems, in competition with other miners. The computer that solves the problem adds a block to the blockchain, a secure ledger that serves as a public record of transactions. The owner of the winning computer obtains a block reward of 6.25 Bitcoins. The process is repeated every 10 minutes or so (Hackett 2016). 19. Hashrate is a measure of the level of competition among Bitcoin miners. 20. Information derived from https://alejandrocremades.com/chase-lochmiller/ and https://www.upper90.io. 21. Information from a Crusoe presentation with analysis prepared by independent thirdparty emissions consultant for illustrative 1,800 mscf/d project with 1,500 mmBtu/mcf gas composition using US Environmental Protection Agency and North Dakota Department of

Environmental Quality methodologies. 22. Based on EDF (2022) and a Crusoe presentation with analysis prepared by independent third-party emissions consultant for an illustrative 1,800 mscf/d project with 1,500 mmBtu /mcf gas.