Renergen - OPIC funding a key endorsement
Renergen has announced that US government agency, Overseas Private Investment Corporation (OPIC), has approved a US$40m loan facility in favour of the Renergen subsidiary Tetra4’s Virginia gas field project. The funds, which have a 12-year term and 30 months’ grace period, are to be utilised for the first phase of development and commercialisation of a 36.4bcf natural gas and 0.87bcf helium field in South Africa’s Free State province. First phase development includes the construction and operation of a 52km gas gathering system and new liquefied natural gas (LNG) and helium liquefaction plant. Renergen now has funding in place for phase one development providing visibility on first gas sales, which we currently assume at the end of 2020. Our last published NAV valuation stood at ZAR21.8/share based on a 15% discount rate and US$280/mcf crude helium price. Renergen is looking at an Australian Stock Exchange (ASX) dual listing to increase liquidity. We expect further details to be released in early 2019.Renergen Ltd. Renergen Limited is an integrated alternative energy company. The Company invests in early-stage alternative energy projects. The Company focuses on the alternative and renewable energy sectors in South Africa and sub-Saharan Africa. The Company holds interests in Tetra4 Proprietary Limited (Tetra4) and Windfall Resources Limited (Windfall). Tetra4 is a natural gas producer that provides sustainable, clean energy solutions to energy users in the Free State Goldfields region. Tetra4 has approximately 10 methane-rich natural gas and helium wells. Tetra4 owns the production right, which spans approximately 187,000 hectares in the Free State near Virginia, Theunissen and Welkom, and is surrounded by approximately 98,000 hectares of exploration rights. The Company owns an exploration right of an approximately 52,000 hectare field located in Evander, Mpumalanga, as well as farm-in rights to approximately two reserves near the towns of Kroonstad and Heilbron.
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