New Era Energy & Digital pivots to AI infrastructure: CEO Will Gray outlines build-out and financing
Last updated: 08:30 15 Nov 2025 EST | First published: 08:21 15 Nov 2025 EST
New Era Energy & Digital (NASDAQ: NEHC) is shifting from helium and natural gas to AI infrastructure. CEO Will Gray says the company's third-quarter spend reflects upfront investment in powered shell data centers in Odessa, Texas, not sagging operations.
Translation for operators: expenses today are intended to set up contracted revenue tomorrow. The company is advancing pre-FID work to position the site for a large, creditworthy tenant.
Why powered shells are the focus
A powered shell is the structural and electrical backbone of a data center. Tenants bring the IT load and fit-out, while the landlord delivers power, cooling capacity, and the building.
Gray pegs build costs at $8-$12 million per megawatt. On a 500 MW campus, that's about $5 billion in total project cost. That level of capex requires deep diligence and staged milestones before a tenant signs.
Due diligence is heavy-and necessary
The Odessa site is moving through subsurface, surface, soil, and foundational assessments. Gray's message: this phase is deliberate by design because a misstep here costs far more later.
Multiple tenant discussions are active. Timelines remain tied to diligence and credit approval, which is standard for projects of this size.
Location and power thesis
Gray's original thesis emphasized behind-the-meter power-generating electricity without leaning on the grid. With grid constraints visible across the U.S., that stance is earning more attention.
He also flagged the importance of the spark spread and Permian Basin gas pricing to the site's economics. The West Texas location is part of the value proposition to both financiers and hyperscale tenants.
Financing: minimize dilution, align with tenant credit
New Era expects to use institutional capital, pension funds, and asset-level debt to finance construction. The goal is to lean on off-balance-sheet and asset-backed structures rather than issue equity for the entire amount.
Key point for shareholders: financing terms will be driven by the tenant's balance sheet once signed. Until then, no forward guidance is being offered.
Market sentiment and positioning
Gray rejects the "AI bubble" label, arguing AI demand resembles the early internet-enduring but uneven. Some peers have stumbled; New Era claims a cleaner balance sheet and a site well-positioned for large customers.
The company reports growing attention from tier-one financial institutions and technology firms. Site visits have been conducted, which supports deal credibility.
What executives should watch
- Site-readiness milestones: power interconnects or generation assets, water strategy, permitting, and geotech results.
- Tenant credit profile: lease term length, escalation mechanics, termination rights, and required delivery specs.
- Capital stack: mix of construction debt, term financing, and any equity at the asset level; covenants that could affect timelines.
- Power economics: fuel sourcing, spark spread sensitivity, and contingency plans if grid interconnection is delayed.
- Delivery risk: EPC partner selection, liquidated damages, and milestone triggers for drawdowns.
Quick facts
- Business model: powered shell data centers; tenant brings IT fit-out.
- Estimated capex: $8-$12M per MW.
- Scale discussed: up to 500 MW (~$5B all-in).
- Funding path: institutional capital, pension funds, asset-level debt; equity used selectively.
- Status: active tenant discussions; diligence ongoing at Odessa, Texas.
Strategy takeaway
If New Era secures a high-quality tenant with a long-term lease, the financing stack becomes far more efficient and less dilutive. The real catalyst is the lease-not the press release.
For leaders planning AI capacity, treat location, power optionality, and construction risk as the core variables. Everything else is downstream of those choices.
Explore executive-focused AI learning paths to align strategy, infrastructure, and talent development.
Your membership also unlocks:
