Bitcoin Miner Marathon to Start Energizing Texas Rigs at Compute North Facility

Marathon Digital (MARA), alongside disappointing Q2 results, said it’s finally begun energizing its fleet at a Compute North facility in west Texas.

“Energization delays, maintenance and weather issues in Montana, and an approximately 56% decline in the price of bitcoin during the quarter, severely impacted our bitcoin production and financial results,” CEO Fred Thiel said in the company’s Q2 earnings report, released Monday.

About 40,000 rigs currently installed in a Compute North facility in Texas have been sitting idly as the hosting firm was waiting for its energy provider to receive tax-exempt approval status.

Compute North has now energized 40 megawatts (MW) of a 280 MW wind powered facility in Upton County in West Texas, according to a Monday press release sent to CoinDesk. Marathon will be the exclusive client of this site, which is Compute North’s fifth TIER 0(TM) site, said the statement. The rest of the 280 MW will be coming online in phases, with “full energization autumn 2022,” Dave Perrill, CEO and co-founder of Compute North told CoinDesk.

Mining at the TIER 0(TM) facility will be behind-the-meter, meaning the energy will not be transmitted through the grid, but the site will curtail its energy consumption when demand is peaking throughout the grid, Perrill added.

In June, a Montana storm and related power outage led to about 30,000 of Marathon’s miners, or 75% of its fleet going offline.

Marathon reported mining revenue in Q2 of $24.9 million, which fell by 15% compared to the same period last year and missed the average analyst estimate of $38.8 million, according to FactSet data.

While operational issues in Texas and Montana took a bite out of revenues, the fall in the price of bitcoin led to a $127.6 million impairment charge on company holdings, which now stand at 10,055 bitcoin after production of 707 in Q2.

The miner reiterated guidance that it will reach 23.3 EH/s in computing power by 2023, noting that it has signed enough hosting agreements with parties to help reach that goal.

Shares are down modestly in after hours action, and remain lower by about 60% year-to-date, in-line with most of bitcoin mining peers.

In December 2021, Compute North agreed to host 100,000 of Marathon’s mining rigs. MARA also signed a 200 MW hosting agreement with Applied Blockchain in July.