XCF Signs Purchase Agreement for Facility Adding 50 Million Gallons a Year
Key Facts
XCF Global has signed a definitive agreement to acquire a renewable fuels production facility in Paramount, California, in a proposed deal that would add about 50 million gallons of annual production capacity after a restart, according to a company statement. The planned additional capacity includes production of sustainable aviation fuel, renewable diesel and renewable naphtha, among the assets the company intends to integrate into its operations. The company said the purchase would be made through a new subsidiary called New Rise Renewables Paramount. It described the arrangement in its statement as a "definitive agreement," with completion of the acquisition remaining subject to agreed closing conditions. The facility's assets include refining, blending, storage and logistics infrastructure, as well as rail and truck terminals.
Management set annual financial targets for Paramount following its restart, including gross product sales of $600 million, according to the statement announcing the agreement. Management targets annual net revenue of $100 million for the facility, a metric it listed separately from the gross product sales target. It also targets annual earnings before interest, taxes, depreciation and amortization of $40 million for the facility after operations resume. These targets relate to the operations the company intends to run at Paramount and form part of management's estimates for the performance of the asset it proposes to acquire. The announced financial targets thus span product sales, net revenue and operating earnings before interest, taxes, depreciation and amortization, all on an annual basis.
On the commercial side, XCF intends to use its partnership with BGN to supply feedstock to the Paramount facility and market the fuel it produces, according to the deal statement. The company already has definitive commercial agreements with the same partner for its New Rise Renewables Reno facility, covering feedstock supply, production, logistics and marketing. When announcing the Reno arrangements, XCF said the commercial framework "can be expanded to include future facilities" owned by the company, subject to conditions. The announced Paramount plan places the commercial partner on both sides of the operation: supplying production feedstock and marketing the finished fuel. The Reno agreements, meanwhile, include production and logistics arrangements alongside supply and marketing, under the framework the company said could be expanded subject to conditions.
The Paramount agreement follows the resumption of operations at the Reno facility, which the company restarted in July, according to its August operational update. August was the first full month of commercial fuel sales following the restart, according to XCF's announcement on the facility's performance during that period. Fuel shipments from Reno totaled 1.3 million gallons during the month, in the commercial sales figures the company presented in its update. XCF reported revenue of more than $10 million from renewable diesel sales in August alongside its announcement of monthly shipment volumes. That revenue relates to Reno's sales in its first full commercial month after operations resumed, while the financial targets in the acquisition agreement concern the Paramount facility after its restart.
The August update also showed daily production and sales at Reno rising from about 50,000 gallons to more than 70,000 gallons, according to the company. The comparison announced by XCF indicates an increase in the pace of production and sales during the operating period covered by the update, following the facility's return to service. Reno's permitted nameplate capacity is 38 million gallons annually, according to the company's statement on the commercial agreements with its partner. The proposed annual capacity addition from Paramount exceeds Reno's permitted nameplate capacity, with operations at the asset to be purchased tied to the restart plan. At Reno, shipment and daily sales figures were included in the update on actual commercial activity, alongside the annual capacity the company announced for the facility.
XCF expects to close the Paramount deal before the end of 2026, subject to the agreed conditions being met, according to the timetable announced in its agreement statement. The company estimates that restarting the facility will take about 9–12 months, the period it has set for its plan to resume operations at the asset it proposes to buy. During the restart, it expects to invest about $30 million, focused particularly on training and operational readiness, according to its published estimates. Management ties the annual sales, net revenue and earnings targets to the period after the restart, while the expected investment covers preparations to return the facility to production. The next targeted milestone in the transaction remains completion of the closing before year-end, according to the company's expectation, which is conditional on meeting the agreement's requirements.