Verde Mining
The Verde Mining Story
“Bitcoin mining and O&G are synonymous - they just don’t know it yet. There is so much upside potential.”
Paul Cockerham is the co-founder and CEO of Verde Mining, located in Midland, Texas, about seven hours west of Houston. A veteran of the oil and gas industry with over 15 years of experience, Paul is an operations engineer and has operated assets for Fortress Energy for many years.
In the Texas Permian Basin, Paul recognized that many operators were caught in the natural gas version of the proverbial rock and a hard place. “It’s too expensive to build a pipeline to many of these operators to justify the investment. The gas is thus stranded from any midstream, so they flare the gas under the required permits. If there wasn’t any oil and was only gas, they would shut in the wells. We offer an option through Bitcoin mining to help turn that waste into revenue.”
In a typical oil and gas operation, operators will sell their natural gas to a midstream company for transport via pipeline to a gas processing plant and on to markets. Reasons it would not be economic to gather gas by running a pipeline include, for example, insufficient supply or demand volumes in a given area, excessive deductions from the spot price of gas, and maintenance considerations. If gas is unable to be transported, it will likely have to be flared to avoid releasing harmful methane directly into the environment, or the well will have to be shut in, thus wasting potential revenue.
In Midland, there are pump jacks pumping and flares flickering across the landscape for as far as the eye can see. It’s a Bitcoin mining dream of a place for a guy like Paul. He started his flare gas mining operations with a single mine as a pilot project in 2021 with 40 T17+ ASICs he secured from the ALCOA plant in Austin.
As part of his proof-of-concept phase to demonstrate the validity of his approach to flare gas mining, Paul continued to experiment until he was able to consistently extinguish the flare by adjusting his mining operations to changes in the gas load. The intermittency of the load is one of the primary challenges for miners using flare gas. Miners and operators share the goal of keeping the flare extinguished. Paul explained, “Operators want their flare put out just as badly as miners want the gas to power their Bitcoin mining operations.”
Paul’s servant leadership is evident in his approach to the operators. “It is not about how much Bitcoin I can mine, it’s how can I serve or help this operator by putting out their flare and keeping it extinguished.”
Paul’s big picture philosophy is also evident in his willingness to share his knowledge with others. When not on one of the mining sites or with his family, Paul can be found at a Midland Bitcoin Meetup or mentoring engineering students.
His enthusiasm and passion for educating others on the benefits of off-grid mining is contagious. He remarked, “I am an oil and gas guy. This is my livelihood. I want the industry to be around for the long-term. I feel we have to be good stewards of the environment and the resources in our care. And I don’t want to see energy wasted.”
The Verde Mining strategy is clearly working. Verde currently has operating sites in the Permian, where it is helping operators to capture value by mining with nat gas that was previously flared. And he has big plans. In fact, the MinerBeast team has been captivated by Paul’s knowledge, philosophy and entrepreneurial spirit, and is excited to help him tell his story and scale his operations.
Verde Workshop Video
“Relationships matter more than Bitcoin.”
As part of Paul’s desire to share his valuable knowledge with the industry, he worked with our MinerBeast digital team to record his 33-minute workshop slide presentation. We know you’ll find it valuable and appreciate Paul’s generous spirit in helping the mining community.
Tour a Verde Flare Gas Mining Site
MinerBeast’s president, Frank Eakin, recently attended Paul’s first flare gas mining workshop in Midland and videotaped him providing a tour of his 1 MW mining site.
Additional tips from Paul (view videos for in-depth tips)
Generators: Reciprocating generators are prevalent in the oil field so there are multiple options that can be adapted for mining with flare gas (Caterpillar, Waukesha Pearce and Doosan are the most popular). The gas in the Permian Basin has components that necessitate specialized adaptations such as an alternator. Verde adds an alternator and solar panels as backup for the batteries. It is important to have team members with oil and gas experience.
Maintenance: It is vital to have a trusted mechanic as well as a reliable maintenance service team that can provide routine service on the generator. The generator is the “heart” of the mining operation. If the generator isn’t working, you are not mining.
Every three months in west Texas, the filters need to be changed, coolant and oil refilled, and spark plugs changed in order to keep the generator operating efficiently. Verde has great relationships with its mechanics and knows if the “heart” of their operation goes down, they can make a call and will have someone out quickly to help get them back up and running. “They know the ‘heart’ better than the individuals that built it,” says Paul.
Another maintenance tip – install an air compressor with a retractable hose inside the container which can regularly blow off any dust or debris from each miner.
Data Center containers: Mobile, modular containers are ideal for flare gas mining. Mining in the Permian has specific challenges due to the extreme climate. Paul prefers Upstream Data containers and has moved toward custom-built containers due to their special ventilation requirements and other advantages. Most containers are built with lower grade material, and less than optimal maintenance connects and networking options. Adding a CISCO switch allowed Verde to upgrade their communication with the ASICs and reduce network problems.
Monitoring and Automation: An ABB Flow Meter is a valuable tool in the field and can be purchased for about $1,000. The temperature, previous day’s volume, differential pressure and gas use/day are all calculated via the ABB flow meter. The calculations are not only necessary to help determine what is happening with the flow, but also are necessary for accounting.
Paul Cockerham (Co-founder, President)
Paul holds a B.S. in Mechanical Engineering from Texas Tech University and a M.S. in Petroleum Engineering from the University of Houston. He has 15 years of oil and gas industry experience and manages Fortress Energy’s operational assets as an Operations Engineer, and Verde Mining’s flare gas BTC mining operations.
Paul focuses on business development, asset valuations and incorporating data analytics and technology into evaluation and management processes. He began investing in BTC & ETH in 2017 and has been active in investing and mining since then.
Verde team members have managed operations and finance departments for large oilfield service companies such as Schlumberger, Fortress Energy, Atlas Energy, and others for over a decade.
“Flare gas mining is a game of quantifying an asset that is stranded due to economic or infrastructure issues.”
