Renergen - OPIC funding a key endorsement

Edison Investment Research - Oil & gas - Renergen: 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.

ISIN: ZAE000202610

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