Halliburton Labs has announced its inaugural cohort of energy tech companies. Photo courtesy of Halliburton

Halliburton's new in-house incubator program that was announced last year has named three new energy tech startups that are moving in.

Halliburton Labs, which originally launched last summer, was established to promote innovation amidst the energy transition. Member startups will have access to the Halliburton facilities, the company's experts, and its network, and will be located in the company's North Houston headquarters.

"We are excited to welcome a strong group of companies who have demonstrated promising innovation and are working to solve important clean energy challenges," says Dale Winger, managing director of Halliburton Labs, in a news release. "We look forward to collaborating with these companies and providing world-class industrial capabilities and expertise to help them achieve further scale."

Three energy tech startups will join Houston-based Nanotech Inc., the first Halliburton Labs startup in the program. Here are the three selected companies:

Enexor BioEnergy

Tennessee-based Enexor BioEnergy is working to address the world's organic and plastic waste problems. The company has developed a patented bioenergy system that can convert almost any organic, plastic, or biomass waste in any combination, into affordable, renewable power and thermal energy.

"We are seeing tremendous inbound customer demand for Enexor's renewable energy solution from across the world," says Lee Jestings, founder and CEO of Enexor BioEnergy, in the release. "We are honored to join Halliburton Labs. Their broad global network and deep manufacturing expertise will assist Enexor in meeting its significant worldwide demand while making a significantly positive environmental impact. This is a major step forward in our worldwide launch."

Momentum Technologies

Dallas-based Momentum Technologies has created an innovative way to recycle lithium battery by working with recyclers and manufacturers to recover critical materials from waste for reuse. The company was formed through a partnership with the U.S. Department of Energy, and Momentum's patented MSX technology has the ability to recover pure critical materials from spent lithium batteries, rare earth permanent magnets and other valuable waste products.

"Halliburton Labs is the ideal environment to scale our cutting-edge lithium battery recycling technology. We are excited to tap into Halliburton's Labs engineering and supply chain expertise and global business network to accelerate Momentum to the forefront," says Preston Bryant, CEO of Momentum Technologies, in the release.

OCO Inc.

Based in Oregon, OCO Inc.'s technology can transform carbon dioxide, water, and zero carbon electricity into a hydrogen-rich platform chemical that can be used to make a wide variety of zero-carbon chemicals, materials, and fuels. OCO's process is highly carbon negative and much less expensive than existing fossil-based processes and feedstocks.

"The valuable industrial expertise and network of Halliburton Labs will support our build, deployment, and demonstration of a full-size commercial grade system, the next step on our commercialization journey towards an industrial scale plant," says Todd Brix, founder and CEO of OCO Inc., in the release.

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Power grid tech co. with Houston HQ raises $25M series B

money moves

A Norway-based provider of technology for power grids whose U.S. headquarters is in Houston has raised a $25 million series B round of funding.

The venture capital arm of Polish energy giant Orlen, Norwegian cleantech fund NRP Zero, and the Norway-based Steinsvik Family Office co-led Heimdall Energy's round. Existing investors, including Investinor, Ebony, Hafslund, Lyse, and Sarsia Seed, chipped in $8.5 million of the $25 million round.

“This funding gives us fuel to grow internationally, as we continue to build our organization with the best people and industry experts in the world,” Jørgen Festervoll, CEO of Heimdall, says in a news release.

Founded in 2016, Heimdall supplies software and sensors for monitoring overhead power lines. The company says its technology can generate up to 40 percent in additional transmission capacity from existing power lines.

Heimdall entered the U.S. market in 2023 with the opening of its Houston office after operating for several years in the European market.

“Heimdall Power has built itself a unique position as an enabler for the ongoing energy transition, with fast-increasing electricity demand and queues of renewables waiting to get connected,” says Marek Garniewski, president of Orlen’s VC fund.

Heimdall says it will put the fresh funding toward scaling up production and installation of its “magic ball” sphere-shaped sensors. In the U.S., these sensors help operators of power grids maximize the capacity of the aging power infrastructure.

“In the United States alone, there are over 500,000 miles of power lines — most of which have a far higher transmission capacity than grid operators have historically been able to realize. To increase capacity, many have launched large-scale and expensive infrastructure projects,” Heimdall says.

Now, the U.S. government has stepped in to ensure that utilities are gaining more capacity from the existing infrastructure, aiming to upgrade 100,000 miles of transmission lines over the next five years.

Heimdall's technology enables grid operators and utilities to boost transmission capacity without undertaking lengthy, costly infrastructure projects. Earlier this year, the company kicked off the largest grid optimization project in the U.S. with Minnesota-based Great River Energy.

Houston energy data SaaS co. partners with trading platform

team work

In an effort to consolidate and improve energy data and forecasting, a Houston software company has expanded to a new platform.

Amperon announced that it has expanded its AI-powered energy forecaststoSnowflake Marketplace, an AI data cloud company. With the collaboration, joint customers can seamlessly integrate accurate energy forecasts into power market trading. The technology that Amperon provides its customers — a comprehensive, AI-backed data analytics platform — is key to the energy industry and the transition of the sector.

“As Amperon continues to modernize energy data and AI infrastructure, we’re excited to partner with Snowflake to bring the most accurate energy forecasts into a single data experience that spans multiple clouds and geographies," Alex Robart, chief revenue officer at Amperon, says in a news release. "By doing so, we’re bringing energy forecasts to where they will be accessible to more energy companies looking to increase performance and reliability."

Together, the combined technology can move the needle on enhanced accuracy in forecasting that strengthens grid reliability, manages monetary risk, and advances decarbonization.

“This partnership signifies Amperon’s commitment to deliver world-class data-driven energy management solutions," Titiaan Palazzi, head of power and Utilities at Snowflake, adds. "Together, we are helping organizations to easily and securely access the necessary insights to manage risk and maximize profitability in the energy transition."

With Amperon's integrated short-term demand and renewables forecasts, Snowflake users can optimize power markets trading activity and manage load risk.

"Amperon on Snowflake enables us to easily integrate our different data streams into a single unified view," Jack Wang, senior power trader and head of US Power Analysis at Axpo, says. "We value having complete access and control over our analytics and visualization tools. Snowflake allows us to quickly track and analyze the evolution of every forecast Amperon generates, which ultimately leads to better insights into our trading strategy."

Amperon, which recently expanded operations to Europe, closed a $20 million series B round last fall led by Energize Capital and tripled its team in the past year and a half.

In March, Amperon announced that it replatformed its AI-powered energy analytics technology onto Microsoft Azure.

Learn more about the company on the Houston Innovators Podcast episode with Sean Kelly, co-founder and CEO of Amperon.

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This article originally ran on EnergyCapital.

Rice research on bond and stock market differences, earnings variations

houston voices

At the end of every quarter, publicly traded companies announce their profits and losses in an earnings report. These updates provide insight into a company’s performance and, in theory, give investors and shareholders clarity on whether to buy, sell or hold. If earnings are good, the stock price may soar. If they’re down, the price might plunge.

However, the implications for the stock price may not be immediately clear to all investors. In the face of this uncertainty, sellers will ask for high prices, and buyers will offer low ones, creating a significant “bid-ask spread.” When this happens, it becomes more costly to trade, and the stock becomes less liquid.

This is a well-documented effect on equity stock markets. However, according to research by Stefan Huber (Rice Business), Chongho Kim (Seoul National University) and Edward M. Watts (Yale SOM), the corporate bond market responds differently to earnings news. This is because bond markets differ from stock markets in a significant way.

Stocks v. Bonds: What Happens When Earnings Are Announced?

Equities are usually traded on centralized exchanges (e.g., New York Stock Exchange). The exchange automatically queues up buyers and sellers according to the quote they’ve entered. Trades are executed electronically, and the parties involved are typically anonymous. A prospective buyer might purchase Microsoft shares from someone drawing down their 401(k) — or they could be buying from Bill Gates himself.

Corporate bond markets work differently. They are “over-the-counter” (OTC) markets, meaning a buyer or seller needs to find a counterparty to trade with. This involves getting quotes from and negotiating with potential counterparties. This is an inherent friction in bond trading that results in much higher costs of trading in the form of wider bid-ask spreads.

Here’s what Huber and his colleagues learned from the research: Earnings announcements prompt many investors to trade. And on OTC markets, potential buyers and sellers become easier to find and negotiate with.

A Stronger Bargaining Position for Bonds

According to Huber, “When earnings information comes out, a lot of people want to trade. In bond markets, that makes it much easier to find someone to trade with. The more options you have to trade, the stronger your bargaining position becomes, and the lower your trading costs go.”

He compares the process to shopping in a market with a flexible approach to pricing.

“Let's say you're at a farmers market and you want to buy an apple,” Huber says. “If there is only one seller, you buy the apple from that person. They can ask for whatever price they want. But if there are multiple sellers, you can ask around, and there is potential to get a better price. The price you get depends on the number of options you have in trading partners.”

What’s at Stake?

Although bonds receive less attention than equities, the stakes are high. There is about $10 trillion in outstanding corporate debt in the U.S., and more than $34 billion in average daily trading volume.

A detailed record of bond trades is available from the Financial Industry Regulatory Authority (FINRA), which requires that trades be reported via their Trade Reporting and Compliance Engine (TRACE).

The study from Huber and co-authors uses an enhanced version of TRACE to examine trades executed between 2002 and 2020. The team analyzed the thirty-day periods before and after earnings announcements to gather data about volume, bid-ask spreads and other measures of liquidity.

They find that, like on the stock market, there are more investors and broker-dealers trading bonds around earnings announcements. However, unlike on the stock market, transaction costs for bonds decrease by 6 to 7 percent in the form of bid-ask spreads.

What Sets This Research Apart?

“Taking a purely information asymmetry-based view would predict that what happens to stock liquidity would also happen to bonds,” Huber says. “A piece of information drops, and some people are better able to work with it, so others price protect, and bid-ask spreads and the cost of trading go up.”

“But if you consider the search and bargaining frictions in bond markets, you get a more nuanced picture. While information asymmetry increases, like it does on stock markets, the information prompts more investors into bond trading, which makes it easier to find counterparties and get better transaction prices. Consequently, bid-ask spreads go down. This search and bargaining friction does not really exist on equities exchanges. But we cannot ignore it in OTC markets.”

As corporate debt markets continue to grow in importance, it will become crucial for investors and regulators to understand the nuanced factors influencing their liquidity. This study provides a solid foundation for future research.

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This article originally ran on Rice Business Wisdom. For more, see “Earnings News and Over-the-Counter Markets.” Journal of Accounting Research 62.2 (2024): 701-35.