RENERGEN, the domestic producer of gas and helium, saw its share price soar for a second consecutive day yesterday, after it announced a 600 percent increase in its methane and helium reserves at its flagship Virginia Gas Project.
The independently confirmed reserves will give the project, the only onshore gas project of its kind in South Africa, the capacity to supply a constrained global helium market and to supply methane to the local renewable energy markets.
Helium is used in the medical sector, space travel and superconductors, and in the manufacture of microchips, fibre-optic cables and other electronic equipment, among a variety of other uses.
The share price increased by 15.5 percent to R40.71 yesterday morning after Renergen announced the increased reserves. On Tuesday the price increased more than 10 percent after higher than expected gas flow rates from one of its wells in Virginia was announced.
Yesterday’s price means the share has risen by more than 152 percent in three months.
Following a recent successful drilling campaign and as part of the company’s ongoing assessment and development of Virginia, Renergen commissioned international reserves and resources accreditation agency Sproule to estimate the reserves and resources of methane and helium within the company’s Virginia Production Right area as at September 1.
The area covers 187 000 hectares in the Free State around Welkom, Virginia and Theunissen. Renergen holds a licence over the area until September 2042, and also holds 100 percent of the economic interest in the production right.
The company said yesterday that Sproule had upgraded the methane and helium reserves at Virginia, with 1P helium reserves having increased by 620 percent to 7.2Bcf (billion cubic feet), while 1P methane reserves had increased by 427 percent to 215.1Bcf.
“The results are very significant to the company, its shareholders and, importantly, highlight the exciting potential
of Virginia to be a globally significant supplier of helium,” the company said.
Chief executive Stefano Marani said in a statement that the growth of the reserves was a milestone and confirmed Virginia as “a world-class helium project”.
“After more than two years of hard work by the exploration team, the results speak for themselves, and I would like to thank the whole team for their dedicated effort and focus,” he said.
Marani said they would continue to work to ensure Virginia was well-placed to supply helium into a growing and constrained market.
“Increasing our 1P helium reserves by more than 600 percent since March 2019 is a great step forward in achieving this goal and, importantly, highlights the enormous potential of Virginia to become a significant helium supplier to not only South Africa, but globally as well.”
Additionally, he said an estimated 400 petajoules of methane, a renewable energy gas, would position the company well to become an integral part of South Africa’s energy mix.
“While 2021 has been an excellent year for Renergen, 2022 is shaping up to be even more exciting as we commence production from the phase 1 plant and begin generating revenue,” he said.
Sproule had previously evaluated the methane and helium reserves and resources of the subject licences for Renergen in 2018 and 2019.
Renergen listed as a special purpose acquisition company on the AltX of the JSE on June 9, 2015, and was the first listed alternative energy company on the JSE.
In November 2015 it acquired its first viable asset, Tetra4 Proprietary, which holds the natural gas field in Virginia.
edward.west@inl.co.za
BUSINESS REPORT ONLINE