Luca files to raise up to $125M in IPO for gas farming

Luca Technologies, a startup which uses biotech to produce natural gas via naturally occurring microbes in coal beds, has filed to raise up to $125 million in an IPO, according to its S-1 filing. Luca plans to go public under the symbol LUCA.

Essentially, there are tiny microbes already found in the water of coal beds, and Luca identifies these environments and boosts the conditions to get the microbes to produce as much methane as possible. Then Luca collects the gas — called gas farming — and sells it.

Luca says its techniques can produce 25 to 30 Mcf of natural gas per day for several years from a coal bed. So far, the company is largely operating in the Powder River Basin, a 90 mile by 200 mile stretch of land in northeastern Wyoming and southeastern Montana that has a large coal seam and natural gas production infrastructure already in place. Luca says its process has been used on 400 wells in the area under a pilot project.

There are companies already targeting farming natural gas from coal beds, but Luca says its technology, which it developed in 2003, is a whole lot cheaper than the standard. Luca says it will be selling the natural gas into the $700 billion global natural gas market.

However, right now, Luca isn’t really generating much revenue, given it’s in the very early stages of commercialization. Luca generated $2.42 million in operating revenues for the year of 2010 and $3.82 million in 2009, and lost $19.68 million in 2010, and $15.40 million in 2009. Luca says as of March 31, 2011, the company had accumulated a deficit of $68.1 million.

Investors in Luca Technologies include Kleiner Perkins Caufield & Byers, Oxford Bioscience Partners, mRNA Fund, and BASF Venture Capital.