Why the Greenhouse Gas Methane Threatens Baker Hughes and Shell – and How Zefiro Methane Is Capturing a Billion-Dollar Market

Shell Focuses on Its Core Business and Relies on External Partners for Sustainability

The global energy giant Shell is once again focusing primarily on maintaining high cash flows in its traditional oil and gas business. Conducting its own labor- and equipment-intensive cleanup operations at old production sites simply does not fit into this strategy. Instead of allocating its own resources to the costly removal of historic drilling sites, the British company prefers to outsource such tasks to specialized service providers. At the same time, Shell is driving its green transformation through targeted partnerships. Shell Energy signed an agreement with Baker Hughes regarding the Zamboni solar park in Italy to supply seven industrial sites and reduce on-site emissions by approximately 13%.

Baker Hughes Shines with Record Orders

US oil equipment supplier Baker Hughes is benefiting from the global expansion of gas and energy infrastructure. The company has a full order book and provides solutions for the oil and gas industry worldwide. In the most recent quarter, Baker Hughes reported revenue of USD 6.7 billion and adjusted earnings per share of USD 0.64. With an operating EBITDA margin of 18.3%, the US company's profitability is extremely robust. Baker Hughes' order backlog climbed to USD 40.1 billion. Among other things, the company provides high-end compressors, LNG technology, and—through its portfolio company Chart Industries—complex process plants. However, it leaves the detailed field remediation at the end of the life cycle of decommissioned infrastructure entirely to other players.

Zefiro Methane Taps into the Profitable Environmental Niche

This is precisely where Zefiro Methane comes in with its vertically integrated model. The US company transforms the enormous environmental burdens of abandoned wells into a predictable and high-margin business model. According to industry estimates, the market size for the remediation of abandoned and orphaned wells in North America ranges between USD 280 billion and USD 500 billion. According to official calculations by the US Environmental Protection Agency (EPA), approximately 7 to 20 million metric tons of CO₂ equivalent escape into the environment annually from unplugged wells. Zefiro Methane is tackling this monumental task with a three-pronged approach consisting of field remediation, measurement technology, and the generation of certified emission credits. Zefiro successfully completed a major project in Custer County, Oklahoma, and recorded 92,956 metric tons of CO₂ equivalent in certified credits according to the American Carbon Registry (ACR) methodology.

Mercuria Energy America, a global commodities trader, had already secured these emission credits in advance through a firm offtake agreement. The ACR's requirements are considered stringent, as even minimal methane leaks starting at 1 g CH₄/h must be verified with a maximum tolerance of 20%. US policy provides additional momentum for Zefiro. The IIJA federal funding program is providing USD 4.7 billion in public funds through the Federal Orphaned Wells Program. Zefiro aims to secure as large a slice of this pie as possible.

Capital Expenditures Drive Zefiro Methane's Revenue

To handle growing order volumes, Zefiro Methane is focusing on targeted acquisitions and the expansion of its subsidiary Plants & Goodwin. For a purchase price of USD 4.3 million, Zefiro Methane acquired the fleet of Viking Well Service, thereby expanding its operational capacity. This surge in capacity immediately bore fruit in the company's operations. A natural gas customer that has been awarding annual contracts to Zefiro since 2017 expanded its 2026 workover campaign from one to three drilling crews, which is expected to generate an estimated additional revenue of approximately USD 10 million. In addition, Plants & Goodwin won four new customers, including three publicly traded corporations with a combined market capitalization of over USD 140 billion. In the first three quarters of fiscal year 2025, revenue climbed 5% to USD 24.4 million. In the third quarter of fiscal year 2026, growth even accelerated by 58% compared to the same quarter of the previous year. At the same time, Zefiro Methane reduced its debt burden from USD 12.3 million to USD 8.2 million and raised CAD 3.3 million in fresh equity through a financing round. The appointment of CFO Correne Loeffler, who brings industry experience from Callon Petroleum, and trading expert Tina Reine, who previously helped build the carbon trading desk at JPMorgan, significantly strengthened the management team led by CEO Catherine Flax.

Zefiro Methane Attractive According to Analysts

Analysts at GBC AG have initiated coverage of Zefiro Methane with a "Buy" rating and price targets of USD 1.50 and CAD 2.12, respectively. In their initial report, the market experts note that the company is exceptionally well-positioned to benefit from the significant need for remediation of abandoned wells in the US. Key growth drivers include government incentive programs and rising demand from private energy and data center developers. Following a dynamic breakout a few months ago, the share has pulled back and is now worth another look.