The share price of emerging natural gas and helium producer Renergen tumbled in early trade on Friday after it said it expected its interim loss to widen as a result of various factors including greater borrowing costs and foreign-exchange losses.
After falling as much as 20% in early trade, the share price pared losses by the close, finishing 5.69% lower at R14.48. It is down about 40% so far this year.
Valued at about R2.1bn on the JSE, Renergen said in a trading statement that its interim headline loss per share would worsen by 49.7%-60% to 28.9c-30.9c from the previous matching period.
Production volumes increased in the first phase of its Virginia Gas Project, but “operating the plant with the delayed startup of the helium module and at current turn down level” remained insufficient to cover its running costs.
“The group’s losses have also been impacted by an increase in borrowing costs and foreign-exchange losses, depreciation attributable to assets brought into use during the period as well as an increase in selling and distribution activities as anticipated given the increase in plant production,” the company said.
Renergen owns Tetra4, which is the owner of a field in Virginia with natural gas and high concentrations of helium and SA’s first and only onshore petroleum production right.
The company has been unable to access the $750m (R14.2bn) in funding it previously announced that has been earmarked for the second phase of the project.
Its $500m loan from the US International Development Finance Corporation (DFC) and $250m from Standard Bank, however, are contingent on the successful raising of $200m cash, most of which was to come from a proposed listing on the Nasdaq.
Renergen was supposed to be producing 300kg of helium a day by October, but there have been setbacks with various leaks.
The company has been in the news lately since shareholder activist Albie Cilliers disclosed extensive selling of shares by the company founders that had not been declared as they were not directors.
The company plans to release its interim results on October 31.
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