Dear Community,

In my last posts, we tried to uncover the layers of modern energy infrastructure:

• Nuclear boomWe have seen how the dismantling of old reactors and the disposal of radioactive waste has become a lucrative business for specialists, while at the same time new reactors are returning as CO2-free power plants.

• Industrial heatAfter that, we delved deeper into the factory halls. Heat is the "currency" of industry. Those who use waste heat efficiently or decarbonize process heat will secure their future competitiveness.

• Electricity highwaysWe have also analyzed the hardware behind the AI boom. Without efficient grids and high-voltage cables, the cleanest electricity gets stuck where it is produced - far away from the hungry data centers.

But what if we had the solution to all these problems right under our feet? If we could combine the drilling expertise of waste disposal specialists, the process heat for industry and the constant energy for AI networks at a single point?

Welcome to the next chapter: Deep Geothermal 2.0. While we have only scratched the surface so far, the technology of 2026 will allow us to harness the enormous heat of the earth's crust much more widely. It is the perfect symbiosis of the precision of the oil industry and the promise of an eternal, base-load energy source.

1. the "Pure Play" operators & developers

Ormat Technologies ($ORA (-0,24%))

• ProfileThe only vertically integrated geothermal company on the US stock exchange. Ormat designs, builds and operates power plants worldwide.

• Core Business: A vertically integrated clean energy provider - the company designs, manufactures, builds, sells, owns and operates primarily geothermal and recovered energy power plants based on its proprietary Ormat Energy Converter.

• Revenue modelRevenue comes from plant construction and sales, the sale of OEM equipment, long-term power purchase agreements (PPAs), operation & maintenance and the ownership of generation assets; in addition, Ormat is expanding its business model to include energy storage and solar hybrid solutions.

• StrategyOrmat operates a global portfolio and relies on organic growth, targeted acquisitions and technical optimization to expand scalable, reliable base load and storage solutions in the growing renewable energy market.

• Growth factorOrmat benefits massively from the increasing demand for clean firm power from tech giants and has the most stable cash flows in the sector.

• OpportunitiesRecurring revenues, technology advantages and diversification. Recent project wins and acquisitions as well as easier approval processes can accelerate growth and market position.

• RisksGeothermal and storage projects are capital and development intensive and are subject to drilling, resource and approval risks. Expiring or unfavorable PPAs, competition and technology uncertainties as well as dependence on project financing and supply chains can weigh on earnings.

Constellation Energy ($CEG (-2,06%))

• ProfileOriginally a nuclear giant, but with the USD 26.6 billion acquisition of Calpine (completed in January 2026) now with additional geothermal exposure for baseload geothermal energy in the USA.

• Core business (generation & marketing)Constellation operates a diversified generation portfolio with a focus on a large, reliable nuclear fleet complemented by renewable and thermal assets. The company produces and sells dispatchable, low-emission energy to wholesale markets and utilities.

• Customer SolutionsThrough its retail and service units, Constellation delivers electricity and gas contracts, energy management, demand response and sustainability solutions to commercial, public and residential customers.

• Growth & StrategyGrowth comes from expansion of clean capacity (combination of nuclear and geothermal for data centers), technological innovation (decarbonization applications) and strategic acquisitions to strengthen market presence in key regions.

• Growth factorThey offer data centers a complete CO2-free package ("24/7 Clean Power").

• Opportunities: Benefits from a large, low-carbon portfolio and steady earnings from nuclear power operations; the addition of gas and geothermal assets strengthens diversification and supports growth through increasing electricity demand (AI).

• RisksRegulatory reviews and approval risks for large acquisitions, operational risks and downtime at power plants as well as market and fuel price volatility; integration costs and debt can also create pressure.

2. the "shovel sellers" (drilling & sensor technology)

Baker Hughes ($BKR (+0,53%))

• ProfileOne of the world's largest oilfield service providers. Baker Hughes provides technology, equipment and field services for oil and gas exploration, drilling, production and processing, as well as gas turbines and compressors - complemented by a global service network.

• Business modelBaker Hughes' business model is based on the combination of equipment sales and rental, long-term service and maintenance contracts, spare parts and after-sales services with project-based engineering and installation services.

• DifferentiationMarket leader in high temperature wellheads and the AutoTrak system (Rotary Steerable, https://www.youtube.com/watch?v=bVTROMVLjOU). Digital monitoring, performance contracts and integrated solutions combine hardware with software to reduce operational efficiency and life cycle costs.

• Growth factorSince EGS drilling is technically more demanding than oil drilling, Baker Hughes can achieve higher margins.

• Future orientationExpansion of solutions for decarbonization, hydrogen, CO₂ management and renewable integration complements the traditional portfolio.

• Opportunities: Benefits from a broadly diversified product base, strong aftermarket revenues, technological innovation and global presence.

• Risks: High cyclicality and commodity dependency; regulatory pressure, intense competition and geopolitical exposure.

Helmerich & Payne ($HP (+1,24%))

• Profile: A leading supplier of drilling rigs worldwide (approx. 25-30 % market share in the USA). Massive global expansion through the acquisition of KCA Deutag (2025).

• Technology: H&P uses its AutoSlide software (https://www.youtube.com/watch?v=WyBDMAYijdM&t=83s),to automate directional drilling on the state-of-the-art FlexRigs. This ensures precise, smooth boreholes - critical for pulling in kilometers of geothermal pipes.

• Growth factorStrategic investments in geothermal start-ups (such as Google partner Fervo Energy). The "FlexRigs" are specially adapted for the precise horizontal drilling that is crucial for EGS systems.

• Strategy: Transformation from a pure equipment rental company to a software and automation group for green base load; the aim is to become an indispensable hardware supplier for the geothermal revolution.

• Opportunities: Market leadership in state-of-the-art AC rigs; high margin potential through the transition to the software-as-a-service model (AutoSlide); strong global presence through the KCA Deutag acquisition.

• Risks: Dependence on US shale oil activity (Permian Basin); high capital requirements to maintain huge fleet; competition from integrated service giants such as Halliburton.

Weatherford International ($WFRD (+1,64%))

• ProfileA specialist in well design and management. Weatherford provides niche technology solutions in extreme environments.

• Technology: They have developed solutions that can withstand temperatures in excess of 400°C+ (Supercritical Geothermal). Their packers and seals utilize metal-to-metal bonding that remains stable in extreme heat.

• Growth factor: Established partner for the "extreme" deep projects that will become commercial in 2026/27. Also benefits from "Well Intervention" (maintenance) to fix scaling problems in geothermal wells during operation.

• Digitization: With the ForeSite® platform, they optimize flow and heat extraction with minimal pumping effort.

• Opportunities: Unique technological position in "Supercritical Geothermal" (400 °C+); high pricing power for specialized sealing systems; recurring revenue through maintenance and scale management.

• Risks: Historically volatile balance sheet (despite successful turnaround); strong dependence on extreme depth projects that could fail technologically; geopolitical risks in emerging markets.

3. infrastructure & specialty materials

Vallourec ($VK (+4,31%))

• ProfileFrench specialist for seamless steel tubes and premium joining solutions (OCTG), focusing on the high-end segment.

• Technology: Geothermal wells require much higher quality pipes than conventional gas wells in order to prevent corrosion caused by aggressive deep water. Vallourec supplies Thermosoc™ (vacuum-insulated pipes) to prevent heat loss during ascent.

• DifferentiationThe patented VAM® threaded connections remain gas-tight, even if the metal expands or contracts extremely during massive temperature fluctuations.

• Strategy: Transformation into an enabler for deep geothermal energy; benefits from ESG specifications through low-CO2 production (electric arc furnaces).

• Opportunities: World market leader in premium connections (VAM®); high entry barriers due to specialized material technology; increasing demand for vacuum-insulated pipes (Thermosoc™).

• Risks: Fluctuating steel prices and energy costs in production; competition from cheaper but lower-quality suppliers from Asia; currency risks (euro/dollar).

Expro Group Holdings ($XPRO (+2,85%))

• ProfileProvider of well services and energy solutions for the entire life cycle of a well.

• Core business: Focus on well flow management. They measure the pressure, temperature and composition of the brine in real time and monitor the integrity of the equipment.

• InnovationWireless data transmission via sound waves through the steel pipe, as conventional cables would melt in the heat.

• Growth factorA profitable growth proxy ("janitor of the reservoir") that benefits directly from increased investment in deep reservoir maintenance. Asset-light model with high margins through recurring maintenance contracts.

• Opportunities: Asset-light model ensures high cash flow margins; technological leadership in wireless data transmission; long-term service contracts secure revenues for decades.

• Risks: Lower growth volume compared to pure plant constructors; dependence on the willingness of large power plant operators to invest; shortage of specialist engineers.

4. the hybrid specialist (lithium geothermal energy)

Vulcan Energy Resources ($VUL (-0,98%))

• ProfileA company that builds geothermal power plants in the Upper Rhine Graben in order to simultaneously extract emission-free lithium for e-car batteries.

• Technology & OperationUtilization of Direct Lithium Extraction (DLE) from hot brine streams, coupled with geothermal power and heat generation. Activities range from exploration to commercial operation (phase 2026: scaling).

• Revenue modelRevenues are generated from the sale of low-carbon lithium products (offtake contracts with VW, Renault, Stellantis), electricity supplies and district heating for municipalities.

• OpportunitiesESG attractiveness through zero-carbon lithium; local European supply chain. Early mover advantage and strong political tailwind through the EU Critical Raw Materials Act.

• RisksTechnical scaling of DLE extraction on an industrial scale is challenging; project expansion may be delayed or become more expensive. Approval, financing and local acceptance risks as well as price risks in the lithium market (risk of dilution).

Strategic conclusion: The birth of "24/7 Clean Firm Power"

The energy market of 2026 could mark the end of the era in which renewable energies were considered weather-dependent. Deep Geothermal 2.0 closes the critical gap between the massive hunger of AI infrastructure and the global decarbonization imperative.

We are seeing a rare convergence here:

Technology transfer: oil industry expertise (H&P, Baker Hughes, Vallourec) becomes an enabler for green baseload.

Sector coupling: Vulcan Energy proves that energy generation and raw material extraction (lithium) can work symbiotically.

Consolidation: The €26 billion takeover of Calpine by Constellation Energy proves that the "big players" now regard geothermal energy as a systemically relevant core component of their fleet.

The investment narrative: While the first wave of the energy transition was often volatile, this sector could now combine the predictability of traditional base load with a significantly better ESG profile in the long term. Investing in the "shovel sellers" and operators of this infrastructure today is betting on the foundations on which the digital economy of the next decade will be built.

My personal growth conclusion: Where is the greatest potential?

As a growth investor in 2026, I am looking for companies that not only deliver stable cash flow, but also have the potential for massive scaling and above-average margin expansion through unique technological selling points. In this landscape, two favorites stand out for me:

1. The technological enabler: Helmerich & Payne ($HP (+1,24%))

H&P is the classic "pick and shovel" bet, but with a crucial software lever. The AutoSlide software ("autopilot of directional drilling") transforms the company from a capital-intensive rig rental company to a true technology partner. Since they control the specialized FlexRigs ("flagship drilling rig" + gold standard for modern automated onshore drilling) that are essential for modern EGS (Enhanced Geothermal Systems) processes, they earn on every meter drilled for tech giants like Google.

2. The high-risk/high-reward hybrid: Vulcan Energy Resources ($VUL (-0,98%))

The company is investing in the convergence of two megatrends: renewable base load and local raw material security. Vulcan is on the threshold of industrial scaling in 2026. With binding purchase agreements from giants such as VW, Stellantis and Renault, growth is no longer a question of sales, but purely one of operational execution. Anyone speculating on a potential "tenbagger" and able to withstand the volatility will find the most exciting hybrid model on the market here.

Strategic verdict: While H&P as a hardware supplier offers the "safety net" for geothermal investors, Vulcan Energy is the bold bet on a completely new industrial model of energy and lithium mining.

Is Deep Geothermal 2.0 the long-awaited 'nuclear killer'? While we argue about nuclear power for decades and billions in investments for new buildings, geothermal energy seems to solve the base load issue almost silently and in a decentralized way. Are you already relying on 'shovel sellers' such as H&P and Baker Hughes in the depot, or are we still overestimating the scaling potential of deep heat?

Best regards

Anderlé ✌🏼