Energy group Renergen is engaged in several high-stakes legal actions — with the company affected by the huge backlog facing SA’s busiest commercial court, the Gauteng division.
Renergen, which on Monday reported widening losses in the year ended February, is swimming in a sea of litigation — either brought against it or cases it has brought against other entities.
The group’s principal asset is its wholly owned subsidiary, Tetra4, which holds SA’s first and only onshore petroleum production right, which is valid until 2042.
The JSE-listed company posted a loss after tax of R246.6m in the year under review, compared with a loss of R109.8m the previous year.
This could worsen should it lose some of the lawsuits launched against it. Renergen’s financial statements show Molopo Energy has moved to cancel the loan agreement for an alleged breach of a condition during the execution of the Mahlako Gas Energy (MGE) investment.
Renergen last year announced the conclusion of an investment in Tetra4 by MGE. Under the agreement, MGE would provide an injection of R550m, which funds will contribute to the further development of the Virginia Gas Project. In return MGE will own 5.5% of the equity in Tetra4.
It is unclear from Renergen’s financial statements how Molopo Energy, which specialises in oil and gas exploration and production, is part of that deal.
Renergen said Molopo Energy had dragged it to court.
“Tetra4 has elected to reject the repudiation and to continue with the loan agreement, which means the loan amount is not due, owing and payable. Molopo has issued summons for payment which Tetra4 is defending,” Renergen said.
“Until such time as a court finally determines the dispute in favour of Molopo, the loan amount is not due. According to the lead times bulletin for the high court roll in Gauteng the earliest hearing date is estimated to only [be] in four years and nine months.”
Gauteng judge president Dunstan Mlambo — one of the front-runners for the vacant role of deputy chief justice — in April made it mandatory for civil cases to go through mediation before trial as a measure to curb an intolerable caseload in high courts, which had started issuing dates for civil case trials to be heard in 2031.
Renergen is set to be busy in the courts in the months and years ahead. It said an entity called African Carbon Energy had applied for a mining right to conduct underground coal gasification on areas that overlap with Tetra4’s production right.
Objection
It said Tetra4 had objected to the application, arguing that the proposed method of mining might reduce Tetra4’s ability to produce gas in a portion of the production right where the overlap occurs.
“Tetra4 is confident that this mining right will not be granted as Tetra4 is first in right, and existing case law having set precedent further supports its legal position.”
Renergen, whose share price has plunged 78% over the past three years, is also at legal loggerheads with Springbok Solar regarding a solar development, which according to the former encroaches upon Tetra4’s production right.
Tetra4 last year instituted urgent motion proceedings in the Free State High Court seeking an interim interdict restraining the project.
The company said the court was expected to deliver its ruling in due course.
Tetra4 and its business partner EPCM Bonisana are also engaged in a legal wrangle over a five-year-old agreement to jointly develop a liquefied natural gas and liquid helium process plant.
“Arbitration proceedings have commenced, with key submissions completed and the hearing currently scheduled for the last quarter of 2025. Tetra4 seeks R34m in delay damages, while EPCM has lodged a counterclaim of R59.2m,” the company said.
Tetra4 earlier this month scored a legal victory when after the Pretoria high court ruled the Gas Act does not apply to production and incidental activities related to upstream petroleum activities — effectively placing helium and other natural gasses outside the reach of the National Energy Regulator of SA (Nersa).
With Lindiwe Tsobo
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