Renergen narrows its losses as it prepares to pump its first gas

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Renergen narrows its losses as it prepares to pump its first gas

Published Date: 2020-10-19 | Source: Stephen Gunnion | Author: Stephen Gunnion

Renergen narrows its losses as it prepares to pump its first gas

The emerging helium and natural gas producer said earnings last year were impacted by once-off transactions costs.

Renergen has narrowed its losses as it continues developing its Virginia Gas Project and brings the Free State operation nearer to positive cash flow. It says the project is close to becoming a key supplier of both clean energy in SA with its liquefied natural gas (LNG) and high-grade helium.

The emerging helium and natural gas producer owns Tetra4, the holder of the only onshore petroleum production right in SA, with proven methane reserves and what Renergen believes is arguably one of the highest concentrations of helium globally. It expects to produce its first LNG and helium in the middle of next year.

Over the six months to end-August, Renergen completed the pipeline design for the project and commenced drilling of the first inclined well. It also struck a deal with Total SA for local distribution of LNG, which can be used as a substitute for liquid fuels, burning cleaner and release fewer emissions.

Revenue fell 37% to R900,000 for the six months to end-August as the project was hampered by lockdown restrictions and Tetra4 wasn't able to generate any revenue between April and May. However, it decreased its costs significantly, resulting in smaller losses. Its loss and headline loss per share declined by 35% to 22.9c. Last year's interim earnings were impacted once-off costs incurred when it raised debt funding with the US International Development Finance Corporation and also equity capital through a secondary listing on the Australian Securities Exchange.

Renergen's shares closed 0.5% higher at R12.90 on Friday.





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