Oil and gas producer Diamondback Energy has signed a non-binding letter of intent (LOI) exploring a power purchase agreement for advanced, small reactor nuclear to potential electrify much of its operations in the shale oil-rich Permian Basin of west Texas.
Next-gen nuclear reactor developer Oklo announced the 20-year LOI with Diamondback. Under the proposed deal, Oklo’s future Aurora powerhouses would supply electric power to Diamondback’s E&P subsidiary in the region near Midland, Texas.
A series of 50-MW Aurora powerhouses could act as nuclear-powered microgrids to provide carbon-free electricity to counter the emissions involved in production from the shale plays. The agreement between Oklo and Diamondback is tentative and non-binding as both sides work out the logistics and, of course, the nuclear developer gaining regulatory approval, additional future financing and building the projects.
“By developing and providing a low-cost, high-reliability and emission-free energy source, Oklo is poised to help meet the growing energy requirements of operators like Diamondback,” Oklo co-founder and CEO Jacob DeWitte said in a statement.
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Oklo has received a site use permit from the U.S. Department of Energy, fuel material award from the Idaho National Laboratory and made its license application to the U.S. Nuclear Regulatory Commission. Last year, Oklo announced a merger with AltC Acquisition Corp. to create a publicly traded company and generate up to $500 million in capital for accelerating Oklo’s business plan and fund deployment of the first Aurora powerhouse.
Other early supporters of Oklo include OpenAI CEO Sam Altman, one of the data sector leaders who is bullish on next-gen nuclear power to help meet the needs of future data center development and net zero goals.
Interest in nuclear energy to help meet net zero goals is increasing, although some microgrid developers are skeptical on whether advanced, small modular reactors can be safe, cost-effective or even socially accepted as on-site or nearby power resources.
Diamondback Energy is focused entirely on the Permian Basin with a reported 1.8 billion barrels of oil equivalent proved reserves. Last month, news reports indicated that Diamondback and rival producer Endeavor Energy Resources were in final talks over a possible $50 billion merger.
