Picture: REUTERS
Picture: REUTERS

Liquefied natural gas and helium company Renergen said on Monday it was shifting all of its focus into bringing its Virginia gasfield project online, after its interim loss deepened due to once-off costs related to its listing on the Australian Securities Exchange (ASX).

The JSE-listed renewable-energy group raised R103m during its initial public offering in June on the ASX, but loss after tax widened 129% to R39.9m, with the company reporting a headline loss a share of 35.24c, from 19.43c previously.

The Association of Mineworkers and Construction Union (Amcu) platinum sector strike hit production at its Virginia gasfield in the Free State, due to 10 gas-powered Megabus vehicles transporting Sibanye mineworkers lying idle. This however, only cost the company about R400,000.

Renergen’s 90% shareholding in Tetra4 is its primary asset, and the natural gas resource contains one of the richest helium concentrations recorded globally. It is also the only on-shore petroleum production right in SA.

Renergen CEO Stefano Marani said on Monday that the focus of the next 18 to 20 months would be on commissioning the helium and natural gas liquifiers and getting them online.

“We will also be conducting more exploratory drilling, drilling into the sandstone, which will determine our proven reserves. There is potentially a huge amount of upside,” Marani said.

Renergen said it has identified in the production area a discrete sandstone body of varying quality occupying an area of at least 90km², which is up to 100m thick in certain parts.

Initial drilling in 2016 had shown helium concentrations of almost 11% compared with an average of 3% across the rest of the field, with Renergen saying earlier in September it would be spending the rest of 2019 conducting a drilling campaign.

Helium is designated a strategic resource, and has multiple applications across cryogenics, semiconductor manufacturing, fibre optics and rocket launches — as well as party balloons.

The US has a strategic helium reserve in Texas, with Renergen saying on Friday the helium market in 2019 had tightened considerably, as the US has said no new further auctions would take place after the 2018 auction.

“New helium megaprojects have a very long lead time before coming online, which has pushed the price of helium up considerably, and the short build-time for the new liquefied natural gas (LNG) and liquefied helium plant we believe makes Renergen an attractive investment prospect,” the company said.

Renergen’s share price was unchanged at R8.75 on Monday, having risen 6.19% so far in 2019. The company has a market capitalisation of R985m.

Correction: September 30 2019
An earlier version of this article stated that Energen's loss was due to the Amcu strike; however, losses related to the strike were minimal and the loss was due to the company's listing on the ASX. Business Day regrets the error.