Edison – Bitesize briefing (January 2020)

In this video Ian McLelland discusses his visit to Renergen’s facilities in the Free State, South Africa in early February. The visit took in Renergen’s gas processing facilities, ongoing drilling activities and a visit to a customer’s site, which uses Renergen’s gas to run a fleet of buses. Ian also visited the early construction facilities for Renergen’s LNG and liquid helium production facilities.

The latest research note
Renergen had a strong H219 as it secured final funding for Phase 1 of its Virginia Gas Project. The project is now firmly in the development phase, major equipment orders have been placed and first liquid production of both LNG and helium is expected to start around July 2021 – with the latter a first for sub-Saharan Africa. Our updated risked NAV of ZAR23.9/share suggests considerable upside potential to the current share price. However, economics and upside could be further enhanced if a directional well currently being drilled into an untested sandstone group at Virginia proves successful. Renergen has already announced preliminary results for the well, which indicate substantially better gas flows than expected, and most critically helium concentration of 12% (compared with 2–3% in its previous wells). Read the full note here.

Company description
Renergen is a producer of helium and natural gas. Currently, it produces compressed natural gas which is used by local transportation companies. Renergen is due to start producing liquefied natural gas (LNG) and helium in 2021.

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