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On track for liquid production by mid-2021

Renergen 30 January 2020 Update
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Renergen

On track for liquid production by mid-2021

Fund-raising update

Oil & gas

30 January 2020

Price

ZAR11.99

Market cap

ZAR1,408m

ZAR14.4/US$, ZAR9.9/A$

Net cash (ZARm) at 31 August 2019

81

Shares in issue

117.4m

Free float

42.1%

Code

RENJ

Primary exchange

JSE

Secondary exchange

ASX

Share price performance

%

1m

3m

12m

Abs

(12.5)

33.2

49.9

Rel (local)

(10.8)

31.7

44.6

52-week high/low

ZAR14.3

ZAR7.4

Business description

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

Next events

Horizontal well results

February 2020

Reserves update

May 2020 (tbc)

LNG/helium production

July 2021

Analysts

Ian McLelland

+44 (0)20 3077 5756

Elaine Reynolds

+44 (0)20 3077 5713

Carlos Gomes

+44 (0)20 3077 5722

Renergen is a research client of Edison Investment Research Limited

Renergen had a strong H219 as it secured final funding for Phase 1 of its Virginia Gas Project. The project is now firmly in the development phase, major equipment orders have been placed and first liquid production of both LNG and helium is expected to start around July 2021 – with the latter a first for sub-Saharan Africa. Our updated risked NAV of ZAR23.9/share suggests considerable upside potential to the current share price. However, economics and upside could be further enhanced if a directional well currently being drilled into an untested sandstone group at Virginia proves successful. Renergen has already announced preliminary results for the well, which indicate substantially better gas flows than expected, and most critically helium concentration of 12% (compared with 2–3% in its previous wells).

Year end

Revenue (ZARm)

Adj. EBITDA*
(ZARm)

Reported net income (ZARm)

Net (debt)/
cash (ZARm)

Cash from operations (ZARm)

Capex
(ZARm)

02/18

2.9

(26.9)

(40.6)

(31.1)

(18.4)

(13.9)

02/19

3.0

(43.2)

(45.0)

48.3

(36.9)

(13.3)

02/20e

4.8

(50.6)

(58.0)

(58.7)

(52.0)

(195.7)

02/21e

8.6

(30.4)

(39.0)

(450.5)

(30.9)

(361.0)

Note: *EBITDA is normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

12% helium from current sandstone well

Results from a directional well currently being drilled to appraise a shallower sandstone interval at Virginia have been particularly positive, both in terms of gas flow rates and helium concentration of 12%. The strong flow rates have delayed completion and testing of the well, but if the early results are confirmed this could have a significant positive impact on Virginia economics and valuation.

On track for LNG/helium production by mid-2021

Meanwhile, the company is on track to complete Phase 1 of the Virginia development by mid-2021. Funding has come from equity raised during the company’s June 2019 listing on the ASX (A$10m) and a subsequent placement in January 2020 (c A$6m), and a US$40m US government agency loan, reflecting the importance of Renergen’s potential helium supply. Key equipment orders have been made and Renergen has hit all its early construction milestones to date.

Valuation: ZAR23.9/share risked 2P valuation

Renergen recently increased its ownership in the Virginia Gas Project to 100% on particularly favourable terms and this has helped increase our valuation from ZAR20.5/share to ZAR23.9/share. The major upside uncertainty at this stage is the ultimate economics of the Virginia Gas Project if the higher helium values and strong flow rates in the sandstone prove reproducible. This will become clearer once Renergen announces results of the ongoing well in February and we learn the impact of this programme on updated reserves and resources around May 2020.

On track for LNG production in mid-2021

Over the last few months Renergen has made several announcements that give us increased confidence the company will be able to switch to LNG and helium production in around July 2021. The company has also acquired the remaining 10% of the Virginia Gas Project that it did not own (in a significantly value-accretive deal). Meanwhile a horizontal well is currently being drilled in an untested sandstone reservoir and is showing encouraging results both for flow rate and helium concentration that could add additional volumes to existing reserves and resources during 2020.

Horizontal well ongoing with 12% helium announced

Renergen is currently drilling and logging a horizontal well targeting a prospective shallow Permian Karoo sandstone that sits within the Virginia Gas Project production area. The sandstone was originally identified in the 2016 well, 2057, which encountered gas at 290m. The helium concentration in 2057 was found to be almost 11%, compared to c 3% on average in the rest of the field. Renergen estimates that the sandstone is up to 100m thick in sections and covers an area of up to 90km2.

Exhibit 1: Horizontal well schematic

Source: Renergen

The current well is designed to assess the scale of the helium and methane reserves in the sandstone. These reserves are not included in Renergen’s existing reserve estimates (current reserves are primarily based on deeper underlying fault zones below the sandstone). The planned horizontal section of 1.5km through the sandstone would maximise exposure to the faults and fractures where flow is expected to be highest, with the well path targeting three major fracture zones. The well is targeting gas bearing structures within two primary target zones, the upper Vryheid Formation sandstones and Dwyka Group diamictite.

Renergen was expecting to complete drilling of the horizontal section in January, having completed the vertical and toe sections of the well in late 2019. Very encouragingly, the company reported strong gas flows almost immediately once the well entered the sandstone; in fact, gas shows in the drilling mud were reported while still in the shallower Karoo formation. After drilling only 50m of the horizontal section, the company reported a choked flow rate of 850mcfd, which is substantially ahead of pre-drill expectations.

In addition to the strong flow rates, Renergen has also reported that gas from this section contained 12% helium and more than 75% methane. The helium concentration is similar to that previously reported from the 2057 well in the same area of the structure, and well above the helium concentrations Renergen assumes in its current reserves and resources (average 2.33% for 2P reserves).

While we expected drilling of the horizontal section to be completed in January, the most recent announcements from the company are that further drilling has been delayed. We understand the delay is to replace the rig blowout preventer (BOP) with a larger facility suited to the potential flow rates being seen while drilling. We understand the replacement BOP will be in place around late January/early February after which drilling can recommence. However, given the large flow rates seen at the toe of the well it is not yet clear if Renergen will be able to complete the horizontal well as planned, or if an alternative well plan will be deployed. While awaiting the replacement BOP, Renergen has been running electric logs since 17 January 2020 and these will be used to evaluate the forward programme for the well.

In addition to the horizontal well, Renergen has confirmed that the first of its planned inclined wells in the Phase 1 development and appraisal programme will spud in early February. We expect results from the inclined wells to be available around six weeks from spudding. Renergen expects to accelerate drilling of the inclined wells in due course using multiple rigs. At present there are a large number of suitable rigs readily available in the South African market.

The results of the horizontal well and the inclined wells will be incorporated into an updated reserves and resource report. Initially the plan was to have this complete by end March 2020; however, we now understand this is likely to slip to around April/May given the delays with the horizontal well and the potential complexities from the unusually high flow rates.

Virginia LNG and helium production from 2021

Following the closing of a US$40m loan in late August 2019 with US government agency Overseas Private Investment Corporation (OPIC), Renergen triggered the final milestone in late October 2019 to start construction of its Virginia Gas Project by appointing Western Shell Cryogenic Equipment Co (WSCE) as the equipment supplier for its first LNG and liquid helium plant. EPCM Bonisana (Pty) (EPCM) will separately install the pipeline and manage the interface between the two installations.

The plant is expected to be installed by April 2021 (ahead of first gas to the plant in July 2021) and will have capacity to produce up to 2,700GJ of liquid natural gas and 350kg of liquid helium per day.

Exhibit 2: WSCE operating plant at commissioning stage in China

Source: Renergen

We assume capital costs for the first helium and LNG liquefiers of US$3.6m (ZAR52.5m) and US$14.4m (ZAR210m), respectively, along with ZAR27m for power facilities.

Interestingly, Renergen is being very open regarding the milestones to reach first LNG production, and has announced its construction schedule and committed to the market an update as each milestone is reached (Exhibit 3).

Exhibit 3: Virginia Phase 1 construction milestones (as of 29 January 2020)

Milestone

Date

Status

Balance of plant

27/11/2019

Completed on schedule

Site establishment for pipeline

10/12/2019

Completed ahead of schedule

Design for pipeline completed

01/04/2020

Site establishment for plant

15/06/2020

Design for plant completed

18/08/2020

Plant batch 1 FOB

01/11/2020

Pipeline completed

20/11/2020

Plant batch 2 FOB

01/01/2021

Plant utilities commissioned

08/04/2021

Gas to plant

07/07/2021

Source: Renergen. Edison Investment Research

This unusually open approach gives us confidence both as to how realistic the schedule is, and that we can track progress accurately towards first LNG production in mid 2021.

Evolution of the South African LNG market

Renergen’s Virginia operation will be South Africa’s first commercial LNG facility as well as being sub-Saharan African’s first supplier of liquefied helium gas. As discussed in our previous notes, the majority of LNG production is expected to go into the South African domestic trucking market, in part replacing compressed natural gas (CNG) that Renergen is already supplying to a limited but growing number of domestic truck operators (see below). In the longer term there is the possibility of a substantially larger domestic LNG industry if the Total-operated Brulpadda field discovered in early 2019 is ultimately developed, although this will be some years off.

Ahead of LNG production in 2021, Renergen continues to grow out its commercial agreements with domestic truck operators for CNG. In September 2019, the company announced the commissioning of its second CNG filling station in Johannesburg, which will supply CNG to a fleet of approximately 15 trucks to be operated by Black Knight Logistics. Initially, these trucks will run on a combination of CNG and diesel, and once Renergen’s LNG facility is commissioned, they will be modified to take LNG, which will increase the refuelling range of the trucks. We understand the conversion from CNG to LNG is relatively simple/low cost.

We expect the new Black Knight trucks to consume in the region of 4GJ/day of CNG, ie adding a potential 60GJ/day to Renergen’s current CNG production. This would effectively triple the company’s revenues in the next 12 months (ahead of LNG production from 2021).

Increased ownership in flagship asset to 100%

Renergen announced in late December that it was acquiring the 10% Black Economic Empowerment (BEE) stake that it did not own in the Virginia Gas Project (owned by BEE partner, Cheryl Sjoberg) for ZAR23m (A$2.33m), net of loans. Given we previously valued Renergen’s 90% stake (on a risked basis) at US$159m (c A$230m) this was clearly a highly value-accretive deal to Renergen. We understand the deal was particularly attractive for Renergen as the company had previously funded the BEE partner with loans that would have made the sale to a third party less attractive.

Renergen has indicated it will not need to secure BEE investors for the 10% stake based on the ‘once empowered, always empowered’ principle adopted in South Africa. However, the company is open to considering any fair, market-related offers from BEE investors for the 10% stake, and has emphasised its continuing commitment to transforming and growing South Africa’s economy.

January 2020 fund-raise and potential change in major shareholder

To fund the acquisition of the additional 10% in the Virginia Gas Project, Renergen has raised in January 2020 an additional A$5.75m in equity (at A$1.2/share). This will also give the company additional funds to appraise the horizontal well and accelerate the inclined well programme as required. Encouragingly, we understand the raise was taken up by a number of institutions, in contrast with the ASX admission raise, which was split between a cornerstone investor and Australian retail investors.

Renergen also announced in November 2019 that its largest shareholder, Tamryn Investment Holdings Proprietary (Tamryn), had entered into an agreement with a private Chinese group, Notable Pioneer, where Notable Pioneer may acquire up to 20m shares from Tamryn, ie c 17% of the share capital. This would increase Notable Pioneer’s stake in Renergen to 24.81% (prior to the January placement). The option to acquire the stake expires on 5 February. We note that the South African Companies Act requires a mandatory offer to be made once a shareholder breaches 35%.

Valuation: Base case ZAR23.9/share

Reflecting the increase in Renergen’s stake in the Virginia Gas Project to 100% (which was highly value accretive) and the January 2020 placement (which is slightly dilutive at A$1.20 or ZAR11.8), plus some adjustments for ZAR/US$/A$ exchange rate movements, our valuation moves from ZAR20.5/share to ZAR23.9/share. However, this is still based only on the existing 2P natural gas/ helium reserves prior to testing of the Vryheid Formation horizontal well currently being drilled. All our numbers are likely to change once updated reserves and resources are available in Q220.

Exhibit 4: Renergen valuation

Asset

Country

Recoverable reserves

Risked

Value per share (risked)

Diluted WI

CoS*

Gross

Net

NPV/mcf

NAV

ZAR/share

(%)

(%)

bcf

bcf

$/mcf

US$m

12.50%

15.00%

10%

Net (debt)/cash – end August 2019

100%

100%

5.6

0.7

0.7

0.7

SG&A – NPV12.5 of three years

100%

100%

(7.0)

(0.9)

(0.9)

(0.9)

January 2020 equity raise

100%

100%

3.9

0.5

0.5

0.5

Acquisition of remaining 10% stake in Virginia Gas Project

100%

100%

(1.6)

(0.2)

(0.2)

(0.2)

Production/development

Virginia stage one

South Africa

100%

90%

19.2

19.2

2.5

42.8

5.2

3.8

7.3

Virginia – remainder of 2P reserves

South Africa

100%

70%

138.1

138.1

1.6

151.5

18.6

13.4

25.8

Core NAV

 

157.3

157.3

195.2

23.9

17.3

33.2

Source: Edison Investment Research. Note: Share capital: 118.2m (does not include 6.1m of options with exercise price above current share price). *Chance of success (CoS) only reflects development risk. NPV models assume that only 60% of drilled wells will be economic, reflecting geological risk.

We continue to risk our model for development uncertainty by applying a 90% development/ commercial CoS for stage one and 70% for stage two and recovery of remaining 2P reserves. As the company achieves more of its construction milestones for stage one, we will expect to unwind the 90% CoS for the first phase of development.

Geological risk is accounted for in our DCF calculations based on the assumption that only 60% of wells drilled will be commercial (and connected to pipe). This is based on the historical success that the company has had intercepting natural gas- and helium-bearing faults in the underlying Witwatersrand Supergroup with its legacy vertical wells. If the company is successful in proving that the Vryheid Formation sandstone is able to accumulate natural gas and helium within the sandstone reservoir (and that this can be exploited with horizontal wells), then this should result in a substantial increase in the repeatability of wells and improved drillex economics.

In keeping with our previous research, we do not ascribe any additional value for Renergen’s substantial contingent resources.

Exhibit 5: Base case valuation waterfall (ZAR/share)

Source: Edison Investment Research

Valuation sensitivities

Our base valuation is based on the 2P reported levels of helium (2.33%) and the final US Bureau of Land Management (BLM) auction price in August 2018 ($280/mcf). However, with a potentially tightening helium market (refer to our February 2019 helium macro report for more details) and the possibility of significantly higher accumulated helium in the Vryheid Formation sandstones, there could be substantial upside to our valuation based on ultimate helium volumes and prices. The sensitivity table below (Exhibit 6) shows the impact of these uncertainties on our base case (2P) valuation.

Exhibit 6: Helium price and concentration sensitivity on valuation (ZAR/share)

% helium

Helium price ($/mcf)

160

200

240

280

320

360

400

1.00%

13.2

14.1

15.0

15.9

16.8

17.7

18.6

2.33%

17.7

19.8

21.9

23.9

26.0

28.1

30.2

4.00%

19.0

22.5

26.0

29.5

33.0

36.5

40.0

6.00%

22.8

27.9

33.1

38.2

43.4

48.5

53.7

8.00%

29.1

35.8

42.6

49.3

56.0

62.8

69.5

Source: Edison Investment Research

Our valuation is also sensitive to the current and future LNG situation, both globally and domestically in South Africa. Currently Renergen is likely to enjoy an LNG price that is linked to domestic diesel prices with an assumed 30% discount. However, as described in our 2019 outlook note we assume that this will switch to an Asian LNG-indexed model at some point (we assume 2025) as domestic markets become more exposed to LNG imports. Both Asian LNG prices and South African diesel prices are similar to when we published our 2019 outlook (South Africa diesel is currently ZAR14.62/litre vs ZAR14.46/litre in July 2019, and the Japan LNG import price is US$10.05/mmbtu vs US$10.13/mmbtu in July 2019), hence we maintain the LNG price assumptions outlined in our 2019 outlook, as shown in Exhibit 7.

Exhibit 7: Gas equivalent price for South African wholesale diesel (US$/mcf)

Source: Refinitiv, Edison Investment Research. Note: Assumes a 30% discount to the diesel equivalent price, consistent with our modelling assumptions.

Our base case core NAV assumes a 30% discount to diesel up to 2025, and an Asian LNG-indexed price of US$12.8/mcf thereafter (inflation adjusted). As we show in Exhibit 8, our valuation will move as these variables change.

Exhibit 8: LNG price sensitivity on valuation (ZAR/share)

Asian LNG-indexed (US$/mcf)

Discount to diesel to 2025

5%

10%

20.0%

30.0%

40%

50%

60%

8.00

21.8

21.1

19.5

18.0

16.5

15.0

13.5

10.00

24.3

23.5

22.0

20.5

19.0

17.4

15.9

12.80

27.7

27.0

25.5

23.9

22.4

20.9

19.4

14.00

29.2

28.5

26.9

25.4

23.9

22.4

20.9

16.00

31.7

30.9

29.4

27.9

26.4

24.8

23.3

Source: Edison Investment Research

Financials: Almost fully funded for Phase 1

The 2019 ASX listing proceeds and January 2020 placing (c A$16m or ZAR162m) and the US$40m OPIC funding (ZAR521m) should cover almost all capital costs required for Renergen to complete Phase 1 of its Virginia LNG/helium development (Exhibit 9). We estimate at the point of first LNG production – around July/August 2021 – the company will have a negative cash balance of c ZAR5m (A$0.5m). This forecast may change once Renergen clarifies the work programme to complete the sandstone appraisal programme.

Exhibit 9: Stage one development sources and uses of capital

Source: Edison Investment Research

However, thereafter Renergen can be expected to be cash flow positive and the net debt position from mid-2021 should improve dramatically as we show in Exhibit 10.

Exhibit 10: Long-term cash generation (Phase 1 only)

Source: Edison Investment Research

The cash flow outlook will be very different if Renergen presses on with Phase 2 development at Virginia as shown in Exhibit 11. This forecast is based on current 2P reserves and will change once the updated reserves are available in around May 2020.

Exhibit 11: Long-term cash generation (Phase 1 and 2)

Source: Edison Investment Research

Exhibit 12: Financial summary

Accounts: IFRS; year end: February; ZAR000s

2016

2017

2018

2019

2020e

2021e

2022e

2023e

2024e

INCOME STATEMENT

 

 

 

 

 

 

 

 

 

Total revenues

0

1,722

2,885

2,987

4,784

8,587

304,725

316,041

327,334

Cost of sales

0

(2,127)

(3,483)

(3,197)

(1,888)

0

(33,453)

(34,926)

(37,028)

Gross profit

0

(405)

(598)

(210)

2,896

8,587

271,273

281,115

290,305

SG&A (expenses)

(17,889)

(21,589)

(31,050)

(43,010)

(53,458)

(38,950)

(39,924)

(40,922)

(41,945)

R&D costs

0

0

0

0

0

0

0

0

0

Other income/(expense)

0

0

4,708

0

0

0

0

0

0

Exceptionals and adjustments

(1,518)

0

(12,359)

(1,629)

(8,132)

(8,132)

(8,132)

(8,132)

(8,132)

Depreciation and amortisation

(88)

(1,025)

(803)

(1,165)

(1,757)

0

(12,615)

(12,886)

(13,142)

Reported EBIT

(19,495)

(23,019)

(40,102)

(46,014)

(60,451)

(38,495)

210,602

219,176

227,086

Finance income/(expense)

2,942

1,279

597

(2,534)

2,439

(499)

(19,880)

(15,117)

(8,617)

Other income/(expense)

0

0

0

0

0

0

0

0

0

Exceptionals and adjustments

(2,946)

(3,156)

(3,532)

0

0

0

0

0

0

Reported PBT

(19,499)

(24,896)

(43,037)

(48,548)

(58,013)

(38,995)

190,722

204,059

218,469

Income tax expense (includes exceptionals)

0

6,234

2,436

3,572

0

0

(72,424)

(75,104)

(77,606)

Reported net income

(19,499)

(18,662)

(40,601)

(44,976)

(58,013)

(38,995)

118,298

128,955

140,864

Basic average number of shares, m

53

78

80

85

111

117

117

117

117

Basic EPS (ZAR/share)

(0.4)

(0.2)

(0.5)

(0.5)

(0.5)

(0.3)

1.0

1.1

1.2

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

(17,889)

(21,994)

(26,940)

(43,220)

(50,562)

(30,363)

231,349

240,193

248,360

Adjusted EBIT

(17,977)

(23,019)

(27,743)

(44,385)

(52,319)

(30,363)

218,734

227,308

235,218

Adjusted PBT

(15,035)

(21,740)

(27,146)

(46,919)

(49,881)

(30,863)

198,854

212,191

226,601

Adjusted EPS (ZAR)

(0.3)

(0.2)

(0.3)

(0.5)

(0.5)

(0.3)

1.1

1.2

1.3

Adjusted diluted EPS (ZAR/share)

(0.3)

(0.2)

(0.3)

(0.5)

(0.5)

(0.3)

1.1

1.2

1.3

 

 

 

 

 

 

 

 

 

 

BALANCE SHEET

 

 

 

 

 

 

 

 

 

Property, plant and equipment

7,145

21,756

32,615

37,757

205,882

566,887

690,853

683,352

730,919

Goodwill

0

0

0

0

0

0

0

0

0

Intangible assets

61,504

75,453

65,838

70,494

99,755

99,755

99,755

99,755

99,755

Other non-current assets

0

6,234

10,303

14,421

21,772

21,772

21,772

21,772

21,772

Total non-current assets

68,649

103,443

108,756

122,672

327,409

688,414

812,380

804,879

852,446

Cash and equivalents

41,721

12,401

3,037

97,956

510,584

118,716

121,180

265,768

367,196

Inventories

0

0

0

0

0

0

0

0

0

Trade and other receivables

4,134

8,933

2,459

4,482

6,697

6,697

6,697

6,697

6,697

Other current assets

6,503

0

0

0

12,659

12,659

12,659

12,659

12,659

Total current assets

52,358

21,334

5,496

102,438

529,940

138,072

140,536

285,124

386,552

Non-current loans and borrowings

26,612

30,113

34,156

49,684

569,234

569,234

569,234

569,234

569,234

Other non-current liabilities

0

0

0

0

0

0

0

0

0

Total non-current liabilities

26,612

30,113

34,156

49,684

569,234

569,234

569,234

569,234

569,234

Trade and other payables

3,490

5,503

11,433

11,193

20,084

20,084

20,084

20,084

20,084

Current loans and borrowings

0

0

0

0

0

0

0

0

0

Other current liabilities

0

0

0

0

0

0

0

0

0

Total current liabilities

3,490

5,503

11,433

11,193

20,084

20,084

20,084

20,084

20,084

Equity attributable to company

98,828

98,423

80,948

180,634

287,077

256,214

382,644

519,731

668,726

Non-controlling interest

(7,923)

(9,262)

(12,285)

(16,401)

(19,046)

(19,046)

(19,046)

(19,046)

(19,046)

 

 

 

 

 

 

 

 

 

 

CASH FLOW STATEMENT

 

 

 

 

 

 

 

 

 

Profit before tax

(19,499)

(24,896)

(43,037)

(48,548)

(57,544)

(38,995)

190,722

204,059

218,469

Net finance expenses

(2,942)

(1,279)

(597)

(1,419)

(4,611)

499

19,880

15,117

8,617

Depreciation and amortisation

88

1,841

2,822

3,150

1,757

0

12,615

12,886

13,142

Share based payments

1,518

0

114

334

8,132

8,132

8,132

8,132

8,132

Other adjustments

5,921

4,453

10,169

11,941

7,838

(499)

(19,880)

(15,117)

(8,617)

Movements in working capital

(6,266)

(3,254)

12,090

(2,327)

(4,723)

0

0

0

0

Other items

0

0

0

0

0

0

0

0

0

Income taxes paid

0

0

0

0

(2,856)

0

(72,424)

(75,104)

(77,606)

Cash from operations (CFO)

(21,180)

(23,135)

(18,439)

(36,868)

(52,007)

(30,863)

139,045

149,972

162,138

Capex

0

(20,714)

(13,861)

(13,343)

(195,704)

(361,005)

(136,581)

(5,384)

(60,710)

Acquisitions & disposals net

0

0

0

0

0

0

0

0

0

Other investing activities

0

0

0

0

(9,256)

0

0

0

0

Cash used in investing activities (CFIA)

49,512

(20,714)

(13,861)

(13,343)

(204,960)

(361,005)

(136,581)

(5,384)

(60,710)

Net proceeds from issue of shares

72,957

13,427

23,480

140,212

153,247

0

0

0

0

Movements in debt

0

0

0

5,149

520,547

0

0

0

0

Dividends paid

0

0

0

0

0

0

0

0

0

Other financing activities

(60,186)

0

558

(231)

(618)

0

0

0

0

Cash from financing activities (CFF)

12,771

13,427

24,038

145,130

673,176

0

0

0

0

Increase/(decrease) in cash and equivalents

41,103

(30,422)

(8,262)

94,919

412,628

(391,868)

2,464

144,588

101,428

Cash and equivalents at end of period

41,721

11,299

3,037

97,956

510,584

118,716

121,180

265,768

367,196

Net (debt) cash

15,109

(17,712)

(31,119)

48,272

(58,650)

(450,518)

(448,054)

(303,466)

(202,038)

Source: Renergen accounts, Edison Investment Research


General disclaimer and copyright

This report has been commissioned by Renergen and prepared and issued by Edison, in consideration of a fee payable by Renergen. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2020 Edison Investment Research Limited (Edison). All rights reserved FTSE International Limited (“FTSE”) © FTSE 2020. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Renergen and prepared and issued by Edison, in consideration of a fee payable by Renergen. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2020 Edison Investment Research Limited (Edison). All rights reserved FTSE International Limited (“FTSE”) © FTSE 2020. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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