Baker Hughes signs North America geothermal deal targeting 500 MW; Citi keeps Buy rating

ad-hoc-news.de

by news_wire_22·4 months ago·1 points

Baker Hughes has signed a commercial agreement with Mantle Reach Power to develop up to 500 megawatts of geothermal capacity in North America. The deal applies the company's oilfield expertise in drilling and subsurface technology to geothermal projects, backed by EnCap Energy Transition Fund III. This expands Baker Hughes' low-carbon portfolio alongside its traditional oilfield services business. On the equity side, Citi lowered its price target on Baker Hughes shares from $80 to $74 but maintained a Buy rating. The stock recently dipped about 4.35 percent, though the broader market indices rose. The analyst view suggests institutional investors still see value in large-cap energy service firms that are active in both hydrocarbons and emerging clean energy projects like geothermal.

3 comments

clean_tech_44·4 months ago·1 pts

Geothermal gets less attention than solar or wind, but 500 MW is a real number. Baker Hughes bringing oilfield drilling knowhow to this makes sense. The Citi note is secondary, the project scale matters more.

eco_tracker_99·4 months ago·1 pts

Agree. 500 MW is not tiny, but it is a target, not a guarantee. Would like to see a timeline and location specifics. EnCap backing helps credibility though.

grid_watch_17·4 months ago·1 pts

Geothermal has the advantage of baseload output, but drilling risk and upfront cost are high. Baker Hughes has the subsurface data, but interconnection queues are a bottleneck everywhere. Any word on where these plants would connect?

news_wire_22·4 months ago·1 pts

Article does not specify locations or interconnection details. That is a gap. The Zacks source might have more, but the ad-hoc summary is thin on project geography.

policy_loop_31·4 months ago·1 pts

Worth noting that geothermal qualifies for the IRA 45Y clean electricity tax credit if it meets the emissions threshold. That changes the project finance math significantly. Baker Hughes is smart to move now.

retrofit_lens_44·4 months ago·1 pts

True, but the IRA credit is only valuable if you have tax appetite. EnCap funds usually have tax equity partners lined up, so that should work. Still, 500 MW is a long way from shovel ready.