Archaea, a leading renewable company announced recently a multi-decade RNG buy and sale agreement with NW Natural Holdings’ subsidiary (NWN). This is likely to be a huge benefit for LFG. However, LFG shares have dropped 8.1% in the past month. Also, considering LFG’s weak bottom line, is it smart to scoop up LFG shares now? Let’s discuss.Renewable natural gas (RNG) producer Archaea Energy Inc. (LFG) in Canonsburg, Pa., develops, constructs, and operates RNG facilities to capture waste emissions and convert them into low-carbon fuel. LFG’s shares rose as high as 9.2% on its initial trading session on the New York Stock Exchange September 16. In a deal worth $1.15billion, the company was listed on the Big Board through an SPAC merger of Rice Acquisition Corp and blank-check company Rice Acquisition Corp.

LFG had announced, in November, that Archaea Holdings was entering a long term RNG purchase/sale arrangement with NW Natural Holdings’ (NWN), Northwest Natural Gas Company. It was the first time that LFG had signed a contract with a U.S.-based utility. NW Natural will acquire Archaea’s environmental attributes, up to 1 million MMBtu per year for 21 years. The agreement will be in effect from early 2022.

However, LFG’s weak bottom line is a concern. It reported a loss of $21.34million in the last quarter. That’s an increase 3,445% on its value a year ago. In addition, cash flow from operations for nine months ending September 30 was negative. LFG’s shares fell 8.1% during the month, and 5.1% for the past five trading days. The stock has declined 6.8% intraday to close yesterday’s trading session at $19.06. The stock is currently trading at a lower level than its 50-day moving mean.

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