SEC Form SC 13D filed by Rice Acquisition Corp. II

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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SCHEDULE 13D

Under the Securities Exchange Act of 1934

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NET Power Inc.

(Name of Issuer)

 

Class A common stock, par value $0.0001

(Title of Class of Securities)

64107A 105

(CUSIP Number)

OLCV Net Power, LLC

c/o Occidental Petroleum Corp.

5 Greenway Plaza, Suite 110

Houston, TX 77046

With copies to:

A.J. Ericksen

Emery Choi

Scott Levi

White & Case LLP

609 Main Street Suite 2900

Houston, Texas 77002

 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

 

June 8, 2023

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box.  ☐

Note: Schedules filed in paper format shall include a signed original and five copies of the Schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent.

 

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

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CUSIP No.: 64107A 105

1	NAMES OF REPORTING PERSONS
	OLCV Net Power, LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a)	☐
				(b)	☐
3	SEC USE ONLY
4	SOURCE OF FUNDS (SEE INSTRUCTIONS)
	OO(1)
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(D) OR 2(E)				☐
6	CITIZENSHIP OR PLACE OF ORGANIZATION
	Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER
			0
		8	SHARED VOTING POWER
			89,553,242(2)
		9	SOLE DISPOSITIVE POWER
			0
		10	SHARED DISPOSITIVE POWER
			89,553,242(2)
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	89,553,242(2)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)				☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	72.9%(3)(4)
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
	OO

CUSIP No.: 64107A 105

1	NAMES OF REPORTING PERSONS
	Oxy Low Carbon Ventures, LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a)	☐
				(b)	☐
3	SEC USE ONLY
4	SOURCE OF FUNDS (SEE INSTRUCTIONS)
	OO(1)
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(D) OR 2(E)				☐
6	CITIZENSHIP OR PLACE OF ORGANIZATION
	Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER
			0
		8	SHARED VOTING POWER
			89,553,242(2)
		9	SOLE DISPOSITIVE POWER
			0
		10	SHARED DISPOSITIVE POWER
			89,553,242(2)
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	89,553,242(2)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)				☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	72.9%(3)(4)
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
	OO

CUSIP No.: 64107A 105

CUSIP No.: 64107A 105

1	NAMES OF REPORTING PERSONS
	Occidental Petroleum Corporation
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a)	☐
				(b)	☐
3	SEC USE ONLY
4	SOURCE OF FUNDS (SEE INSTRUCTIONS)
	OO(1)
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(D) OR 2(E)				☐
6	CITIZENSHIP OR PLACE OF ORGANIZATION
	Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER
			0
		8	SHARED VOTING POWER
			89,553,242(2)
		9	SOLE DISPOSITIVE POWER
			0
		10	SHARED DISPOSITIVE POWER
			89,553,242(2)
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	89,553,242(2)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)				☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	72.9%(3)(4)
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
	HC; CO

This Schedule 13D (this “Schedule 13D”) relates to the shares of Class A Common Stock, par value $0.0001 per share (the “Class A Common Stock”), of NET Power Inc., a Delaware corporation (the “Issuer”). The principal executive offices of the Issuer are located at 404 Hunt Street, Suite 410, Durham, North Carolina 27701.

 

(a) This Schedule 13D is being filed by OLCV Net Power, LLC, a Texas limited liability company (“OLCV Net Power”), Oxy Low Carbon Ventures, LLC, a Delaware limited liability company (“OLCV”), OXY USA Inc., a Delaware corporation (“OXY USA”), and Occidental Petroleum Corporation, a Delaware corporation (“Occidental”) (collectively, the “Reporting Persons”). OLCV Net Power is a direct, wholly owned subsidiary of OLCV. OLCV is a direct, wholly owned subsidiary of OXY USA. OXY USA is a direct, wholly owned subsidiary of Occidental.

The name of each director and/or executive officer of OLCV Net Power and Occidental (collectively, the “Covered Persons”) is set forth in the attached Annex A and incorporated by reference herein.

The Reporting Persons have entered into a Joint Filing Agreement dated June 20, 2023, pursuant to Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, a copy of which is attached hereto as Exhibit 7.1.

 

(b) The address of the principal business office of each of the Reporting Persons is 5 Greenway Plaza, Suite 110, Houston, TX 77046. The address of each of the Covered Persons is set forth in Annex A and incorporated by reference herein.

 

(c) Occidental’s principal businesses consist of three reporting segments: oil and gas, chemical and midstream and marketing. The oil and gas segment explores for, develops and produces oil (which includes condensate), natural gas liquids (“NGLs”) and natural gas. The chemical segment primarily manufactures and markets basic chemicals and vinyls. The midstream and marketing segment purchases, markets, gathers, processes, transports and stores oil, NGL, natural gas, carbon dioxide (“CO₂”) and power. It also optimizes its transportation and storage capacity, and invests in entities that conduct similar activities. The midstream and marketing segment also includes Occidental’s low-carbon venture businesses, including OLCV.

 

The principal business of OXY USA is to engage in the exploration and production of domestic oil and gas and to hold ownership interests in its various subsidiaries.

 

The principal business of Occidental’s low carbon ventures businesses, including OLCV, is to focus on advancing carbon removal and carbon capture, utilization and storage projects, including developing and commercializing direct air capture technology, and to invest in third-party entities (such as the Issuer) that are developing technologies that advance other low-carbon initiatives.

 

The principal business of OLCV Net Power is to invest in the Issuer.

 

The present principal occupation or employment of each of the Covered Persons is set forth in Annex A and incorporated by reference herein.

 

(d) – (e) During the last five years, none of the Reporting Persons, nor, to the knowledge of the Reporting Persons, any of the Covered Persons, (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which such person was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, U.S. federal or state securities laws or finding any violation with respect to such laws.

(f) The place of organization of each of the Reporting Persons is set forth in Item 2(a). The citizenship of each of the Covered Persons is set forth in Annex A and incorporated by reference herein.

The Reporting Persons beneficially own, through OLCV Net Power as the owner of record, both (i) outstanding shares of Class A Common Stock and (ii) shares of Class A Common Stock that are exchangeable one-for-one for outstanding shares of Class B common stock, par value $0.0001 per share, of the Issuer (the “Class B Common Stock” and collectively with the Class A Common Stock, the “Common Stock”). The Reporting Persons also beneficially own a number of Opco Units (as defined below) equivalent to the number of shares of Class B Common Stock that they beneficially own.

 

OLCV Net Power acquired the shares of Class B Common Stock and Opco Units pursuant to a Business Combination Agreement, dated as of December 13, 2022 (the “Business Combination Agreement”), by and among NET Power, LLC (“Old NET Power”), Rice Acquisition Corp. II (“RONI”), Rice Acquisition Holdings II LLC (“RONI Holdings,” which was renamed NET Power Operations LLC in connection with the Closing, as defined below), Topo Buyer Co, LLC (the “Buyer”), and Topo Merger Sub, LLC. The transactions contemplated by the Business Combination Agreement (the “Merger”) closed (the “Closing”) on June 8, 2023 (the “Closing Date”). OLCV Net Power was a shareholder of Old NET Power prior to the Closing of the Business Combination, having purchased 355,555 shares of Old NET Power at a purchase price of $168.75 per share in 2019 and 2020, and an additional 1,099,999 shares of Old NET Power from McDermott Technology Sub in 2022. OLCV Net Power also acquired an additional 5,824 shares of Old NET Power in January 2023 pursuant to exercising a warrant issued under a Loan and Security Agreement by and among Old NET Power, OLCV Net Power and certain other parties thereto. In connection with the Closing, RONI retained its “up-C” structure and changed its name to “Net Power Inc.”, and as such, as a result of the Closing, OLCV Net Power, along with certain other legacy investors of Old NET Power, directly acquired 55,553,247 shares of Class B Common Stock and an equivalent number of Class A units (“Opco Units”) of NET Power Operations LLC (“Opco”), in which Issuer is the sole managing member and whose equity interests are the Issuer’s only asset. Pursuant to the limited liability company agreement of Opco (“Opco LLC Agreement”), at the request of the holder, each Opco Unit may be redeemed for, at the Issuer’s election, a newly issued share of Class A Common Stock or cash, and upon redemption of such Opco Unit, a share of Class B Common Stock shall be surrendered by the holder and canceled by the Issuer.

 

Additionally, OLCV Net Power acquired the outstanding shares of Class A Common Stock pursuant to subscription agreements, dated December 13, 2022 and April 23, 2023 (the “Subscription Agreements”), between it and RONI, pursuant to which OLCV Net Power agreed to subscribe for and purchase from RONI, and RONI agreed to issue and sell to OLCV Net Power, an aggregate of 33,999,995 newly issued shares of Class A Common Stock for an aggregate purchase price of $333,999,950, on the terms and subject to the conditions set forth in the Subscription Agreements, as part of a PIPE financing with several other investors who also signed subscription agreements with the same terms (the “PIPE Financing”). The Subscription Agreements contained customary conditions to closing, including the consummation of the Business Combination immediately following the consummation of the PIPE Financing. The purchases under the Subscription Agreements closed on the Closing Date, substantially concurrently with the closing of the Business Combination.

 

The above descriptions of the Business Combination Agreement and Opco LLC Agreement are qualified in their entirety by reference to the text of each such agreement, which are filed as Exhibits 7.2 and 7.3, respectively, and are incorporated by reference herein in their entirety.

The information contained in Items 3 and 6 of this Schedule 13D is incorporated by reference herein.

The Reporting Persons acquired the securities reported herein for strategic investment purposes. The Reporting Persons provide expertise to the Issuer in the CO₂ value chain, and are expected to play a key role in the development and commercialization of the first NET Power Plant, or SN1, and to provide the host site for the project near Odessa, Texas.

The Reporting Persons will continuously review their investment in Issuer, and depending on market, economic and industry conditions, their continuing evaluation of the business, strategies, prospects, management, governance, operations, performance, financial matters, capital structure and prospects, market positions, strategic and other transactions of the Issuer, alternative investment opportunities and changes in applicable law and/or regulations and all other factors that may be deemed relevant, the Reporting Persons may dispose of or acquire additional securities of the Issuer. Pursuant to the Stockholders’ Agreement (as defined in Item 6), OLCV Net Power has the right to designate three director nominees for appointment or election to the board of directors of the Issuer (the “Board”), subject to the terms of the Stockholders’ Agreement. The Reporting Persons may and expect that they will engage, including through such director nominees, in discussions with the Issuer’s management and/or Board, other stockholders of the Issuer and other interested parties that may relate to the business, management, operations (including cost structure), assets, capitalization, financial condition, strategic plans, governance, Board composition and the future of the Issuer. Subject to market conditions and other factors described in this Schedule 13D, the Reporting Persons may also seek to monetize their securities in the Issuer through various transactions, including, without limitation, derivative transactions or a pledge of their interests in the securities of the Issuer as collateral for liquidity purposes.

The Reporting Persons do not have any current plans or proposals which relate to or would result in any of the actions described in Items 4(a)-(j) of Schedule 13D. However, the Reporting Persons may consider such matters in the future and, subject to applicable law, may formulate a plan with respect to such matters, and, from time to time, the Reporting Persons may hold discussions with or make informal recommendations or formal proposals to the Issuer’s management or Board, including any special committees of the Board and their respective advisors, other holders of the Issuer’s securities, industry analysts, financial sponsors, existing or potential strategic partners, actual or potential sources of capital and other third parties regarding such matters.

 

The information contained on the cover pages and in Item 3 of this Schedule 13D is incorporated by reference herein.

(b) For information on the Reporting Persons’ powers to vote and dispose of the shares of Class A Common Stock, see rows 7 to 10 of the cover pages to this Schedule 13D.

(c) Except for the transactions described in response to Item 4 above, which information is hereby incorporated by reference, none of the Reporting Persons, nor, to the knowledge of the Reporting Persons, any of the Covered Persons, has effected any transactions that may be deemed to be a transaction in the Class A Common Stock during the past 60 days.

(d) To the best knowledge of the Reporting Persons, no one other than the Reporting Persons and their respective members, shareholders and affiliates has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Class A Common Stock reported herein as beneficially owned by the Reporting Persons.

(e) Not applicable.

 

The information set forth in Item 3 is incorporated by reference in its entirety into this Item 6.

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33 1/3% of its equity interests in the Issuer and Opco (“Company Interests”) that were received pursuant to the Business Combination Agreement as consideration for equity interests in Old NET Power (or in the case of BHES, pursuant to the JDA (as defined in the Business Combination Agreement)) (the “Price-Based Lock-up Shares”) may not be transferred until after the three-year anniversary of the Closing Date; provided, however, that if the last sale price of the Class A Common Stock on the principal exchange on which such securities are then listed or quoted, for any 20 trading days within any 30 consecutive trading-day period commencing at least 15 days after the Closing, exceeds (i) $12.00 per share, then one-third of the Price-Based Lock-up Shares will no longer be subject to such lock-up restrictions, (ii) $14.00 per share, then an additional one-third of the Price-Based Lock-up Shares will no longer be subject to such lock-up restrictions, and (iii) $16.00 per share, then all of the Price-Based Lock-up Shares will no longer be subject to such lock-up restrictions; and

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66 2/3% of its Company Interests that were received pursuant to the Business Combination Agreement as consideration for equity interests in Old NET Power (the “Time-Based Lock-up Shares”) may not be transferred until after the one-year anniversary of the Closing Date; provided, however, that if the last sale price of the Class A Common Stock on the principal exchange on which such securities are then listed or quoted, for any 20 trading days within any 30 consecutive trading-day period commencing at least six months after the Closing Date, exceeds $12.00 per share, then the Time-Based Lock-up Shares will no longer be subject to such lock-up restrictions.

 

The above description of the Stockholders’ Agreement is qualified in its entirety by reference to the text of such agreement, which is filed as Exhibit 7.4 and is incorporated by reference herein in its entirety.

 

The above description of the Tax Receivable Agreement is qualified in its entirety by reference to the text of such agreement, which is filed as Exhibit 7.5 and is incorporated by reference herein in its entirety.

SIGNATURES

 

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Executive Officers and/or Directors of OCLV Net Power and Occidental

OLCV Net Power has no directors. The name, present principal occupation and country of citizenship of the sole executive officer of OLCV Net Power are set forth below. The address for such person is c/o Occidental Petroleum Corporation, 5 Greenway Plaza, Suite 110, Houston, TX 77046.

The name, present principal occupation and country of citizenship of each executive officer and director of Occidental are set forth below. The address for each such person is c/o Occidental Petroleum Corporation, 5 Greenway Plaza, Suite 110, Houston, TX 77046.

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