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Renergen

JP: RENJ

Market CapZAR3201m

Last Close ZAR25.91

Renergen is an emerging producer of helium and liquefied natural gas (LNG), with existing production and sales of compressed natural gas.

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Investment summary

Renergen secured final funding for Phase 1 of its Virginia Gas Project in H219. The project is now in the development phase, and first liquid production of LNG and helium is now expected in H221. In January 2021, Renergen awarded contracts to carry out engineering studies for Phase 2, to be completed around Q221. Construction completion is estimated by late 2023, for which Renergen will require additional funding. The company also signed its first ‘Direct to Customer’ deal with German automotive supplier, iSi Automotive, to take helium from Phase 2. Our risked NAV stands at ZAR23.9/share, although this does not reflect the COVID-related project delays. In 2020, the MDR1 well was re-drilled, producing 164,000cf/d by April 2021 and the P007 exploration well tested at 200,000cf/d. Two wells, C3PO and R2D2 are currently being drilled (with a permit required to drill deeper in R2D2). An independent estimate from Sproule from July 2020 estimates that the Virginia Project holds 2U (P50) prospective helium resources of 106bcf. Global helium demand is c 6bcf/pa.

Y/E Feb
Revenue (ZARm)
EBITDA (ZARm)
PBT (ZARm)
EPS (fd) (c)
P/E (x)
P/CF (x)
2018A 2.9 (26.9) (27.1) (0.3) N/A N/A
2019A 3.0 (43.2) (46.9) (0.5) N/A N/A
2020E N/A N/A N/A N/A N/A N/A
2021E N/A N/A N/A N/A N/A N/A
Industry outlook

Renergen is targeting the heavy-duty LNG truck market which is a rapidly evolving market globally. The helium market remains under supplied in 2021, though significant additional supply from Russia and Qatar from 2022 could lead to oversupply from the mid-2020s.

Last updated on 20/10/2021
Content on Renergen
Bitesize briefing – Renergen
Oil & gas | Edison TV | 24 February 2020
Renergen – On track for liquid production by mid-2021
Oil & gas | Update | 30 January 2020
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Share price graph
Balance sheet
Forecast net debt (ZARm) 58.7
Forecast gearing ratio (%) 59
Price performance
%
1m
3m
12m
Actual 23.7 52.0 102.6
Relative* 13.6 49.3 67.4
52-week high/low ZAR29.6/ZAR11.2
*% relative to local index
Key management
Stefano Marani CEO
Fulu Ravele CFO
Nick Mitchell COO