Helium and natural gas group Renergen expects to cut some of its losses as energy prices have risen globally and Covid-19 restrictions eased over the past year.
CEO Stefano Marani said in a trading statement on Tuesday the company expected its headline loss per share for the year to end-February to decrease from 36.29c to between 31.4c and 24.1c, an improvement of between 13.5% and 33.6% year on year.
The company first acquired its petroleum production rights on a farm in the Free State in 2013 for $1 (R15.68 at today’s rate) and is now valued at about R5bn on the JSE.
Renergen’s subsidiary Tetra4 wholly owns the Virginia Gas Project in the Free State — SA’s only onshore petroleum development right — which contains among the world’s highest helium concentrations.
Helium is a byproduct of natural gas and is used in the production of computer chips, cellphones and more.
The state-owned Central Energy Fund (CEF), whose mandate includes securing SA’s energy security, said in March it was looking to buy a 10% stake in Tetra4.
Earlier in March, Renergen announced that Canadian group Ivanhoe Mines may spend as much as $250m (R3.91bn) to acquire a controlling stake, inking a R200m deal for an initial 4.35%.
Renergen’s phase 1 is on track to begin production in April, with an expected output of 2,700GJ of liquefied natural gas a day and 350kg of helium, while the group is also gearing up for phase 2 of its development, a more substantial project that is expected to produce at least 24,000GJ, at an estimated cost of $800m-$900m.
The company expects to publish its final results on May 19.
By the JSE’s close on Tuesday Renergen’s share price was 0.65% lower at R38.44.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.