Marathon Digital Holdings posted a $100 million deposit for its Texas data center project and reworked deal terms following a comprehensive audit.

Marathon Digital Holdings (NASDAQ: MARA) has posted a $100 million utility deposit and revised payment and exit terms for its planned Matagorda County data center project as Texas intensifies scrutiny of large electricity users seeking grid access.

MARA acquired the project from sustainable fuels developer HIF USA in July. The site spans more than 1,200 acres southwest of Houston and includes land interests and utility agreement rights tied to a proposed 2 gigawatts of power capacity. The company plans a campus supporting high-performance computing and bitcoin mining, with acquisition payments structured around development milestones. The purchase price remains capped at $600 million if all milestones are achieved.

The amendment, signed earlier this week and disclosed Friday, makes certain payments contingent on successful completion of a regulatory audit and MARA's decision to proceed following an interconnection study. This follows MARA's September 14 disclosure that Matagorda received a conditional "Studied Load" classification under the Electric Reliability Council of Texas's Batch Zero process—a designation that leaves the project's proposed capacity subject to further study and allocation. By contrast, MARA's Granbury and Garden City sites received conditional "Base Load" classifications.

The Batch Zero designation carries significance: it does not establish how much power Matagorda will ultimately receive. ERCOT stated that its provisional classifications remain subject to conditions that can include verification, correction of modeling deficiencies, and regulatory exceptions. Projects failing applicable conditions can be excluded.

MARA signed the amendment on the same day Governor Greg Abbott directed the Texas Commission on Environmental Quality to halt permits sought by data centers pending completion of ERCOT's audit. The governor's office also instructed state agencies not to advance related regulatory approvals until the information needed for their decisions had been obtained. This followed Abbott's August 3 directive to state utility regulators and ERCOT to audit data centers advancing through the interconnection process before permitting them to proceed. The review seeks information on electricity demand, water consumption, public subsidies, ownership, and effects on neighboring communities. On September 14, Abbott further directed the Texas Water Development Board to enforce water-use reporting requirements and coordinate with ERCOT on the audit.

Although MARA's filing does not explicitly link the renegotiation to these directives, the revised payment structure places successful completion of a Texas regulatory audit among the conditions for paying HIF. Payments previously tied to certain regulatory approvals will now be payable in two installments: one triggered by successful completion of the audit, and another by MARA's election to proceed after the applicable interconnection study. The agreement also increases the maximum payments tied to authorization for the site to receive power, without raising total acquisition consideration.

MARA's August quarterly report had described the original first milestone payment as contingent on Batch Zero approval, with nothing due absent that approval. The September filing does not clarify whether Matagorda's conditional classification satisfied that earlier contractual requirement.

The $100 million security deposit was posted by subsidiary Volt Texas with an unnamed electric utility for the site's contemplated power capacity. MARA can elect to withdraw it at its discretion, subject to the amended agreement's project-sale process.

The amendment also replaces provisions that could have required the project company to revert to HIF if certain milestones were missed within specified periods. Instead, specified triggers relating to the audit and MARA's decision not to proceed would require the parties to market the project for sale. HIF would have a right of first offer, with net proceeds divided under an agreed distribution formula; the filing does not disclose that formula or the revised milestone-payment amounts. HIF's right to retain a minority interest upon execution of a third-party data center lease remains unchanged.

MARA originally projected access to as much as 1 gigawatt of grid capacity by October 2027 and 2 gigawatts by April 2028. The September amendment does not announce final power authorization or provide a revised timetable.