Our opinion on the current state of RENERGEN(REN)
Renergen (REN) is an integrated alternative energy company focused on renewable energy projects in Africa, particularly in liquified natural gas (LNG) and helium. Listed on the JSE in June 2015, Renergen has faced ongoing financial challenges, reflected in consistent losses and a falling share price. Despite this, the company has been making strategic investments to position itself as a key player in the energy and helium sectors.
The company raised R125 million through a fully underwritten rights issue, enabling access to a R218 million loan facility. Its initial public offering (IPO) on the Australian Stock Exchange (ASX) was more than twice oversubscribed. Renergen claims to have proven helium reserves of over 6 billion cubic feet, and the US government identified helium as critical to national security in 2018, driving up prices by 135%.
Notable developments include:
- 10th December 2020: Announcement of the development of an aluminium case that can keep vaccines cold for up to 30 days, a potential game-changer for the company.
- 21st June 2021: Helium discovery at Evander with a concentration of 1.1%.
- 9th March 2021: Significant gas strike in the Karoo.
- 12th April 2021: First deal to sell helium was concluded.
- 3rd November 2021: A 620% increase in 1P helium reserves was announced, causing a share price spike.
- 7th June 2023: Renergen secured $750 million in additional funding from Standard Bank and the International Development Finance Corporation for the Virginia Gas Project (VGP).
In its results for the year ending 29th February 2024, Renergen reported revenue growth of 128.4%, but a headline loss of 75.07c per share, up from a loss of 19.89c in the previous period. The company cited unexpected operational challenges at the VGP, its primary asset, related to LNG and helium operations. Despite these challenges, the company now holds 94.5% of the VGP after selling a 5.5% stake to MGE.
For the six months ending 31st August 2024, Renergen projected a headline loss of between 42.7c and 48.7c per share, compared with a loss of 29.87c in the previous period. The company remains a speculative investment, given its volatility and the operational risks it faces.
On 12th August 2024, Renergen announced that it was fully online and producing liquid helium for sale, which caused the share price to jump and break above its long-term downward trendline. However, this break was short-lived, and the stock remains in a volatile and uncertain position.
Investors should exercise caution, particularly in the short term, and consider waiting for more stable signals of growth before further investigation. Renergen may offer speculative opportunities, but its risks are significant.
The company raised R125 million through a fully underwritten rights issue, enabling access to a R218 million loan facility. Its initial public offering (IPO) on the Australian Stock Exchange (ASX) was more than twice oversubscribed. Renergen claims to have proven helium reserves of over 6 billion cubic feet, and the US government identified helium as critical to national security in 2018, driving up prices by 135%.
Notable developments include:
- 10th December 2020: Announcement of the development of an aluminium case that can keep vaccines cold for up to 30 days, a potential game-changer for the company.
- 21st June 2021: Helium discovery at Evander with a concentration of 1.1%.
- 9th March 2021: Significant gas strike in the Karoo.
- 12th April 2021: First deal to sell helium was concluded.
- 3rd November 2021: A 620% increase in 1P helium reserves was announced, causing a share price spike.
- 7th June 2023: Renergen secured $750 million in additional funding from Standard Bank and the International Development Finance Corporation for the Virginia Gas Project (VGP).
In its results for the year ending 29th February 2024, Renergen reported revenue growth of 128.4%, but a headline loss of 75.07c per share, up from a loss of 19.89c in the previous period. The company cited unexpected operational challenges at the VGP, its primary asset, related to LNG and helium operations. Despite these challenges, the company now holds 94.5% of the VGP after selling a 5.5% stake to MGE.
For the six months ending 31st August 2024, Renergen projected a headline loss of between 42.7c and 48.7c per share, compared with a loss of 29.87c in the previous period. The company remains a speculative investment, given its volatility and the operational risks it faces.
On 12th August 2024, Renergen announced that it was fully online and producing liquid helium for sale, which caused the share price to jump and break above its long-term downward trendline. However, this break was short-lived, and the stock remains in a volatile and uncertain position.
Investors should exercise caution, particularly in the short term, and consider waiting for more stable signals of growth before further investigation. Renergen may offer speculative opportunities, but its risks are significant.
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