- Renergen (RLT) spikes in early trade after striking gas in another of its key Johannesburg wells
- The C3PO well struck an “exceptional” helium concentration of 1.7 per cent, according to Renergen, which is above company expectations
- Meanwhile, the nearby R2D2 well is showing promise, too, with Renergen reporting prelimiary helium readings of between one per cent and 2.5 per cent
- Renergen had just shy of R125 million (A$11.6 million) worth of funding for future exploration and development work available at the end of May
- Shares in Renergen are up 3.61 per cent and trading at $1.72 each at 10:35 am AEST
Natural gas and helium company Renergen (RLT) has spiked in early trade after striking gas in another of its key Johannesburg wells.
Dubbed C3PO, the well struck an “exceptional” helium concentration of 1.7 per cent — slightly above pre-drill expectations, according to Renergen.
The company said the well is currently waterlogged so that standard electronic wireline logs can be run through, but even with the water load, C3PO has started producing over 30,000 standard cubic feet of gas per day with 1.7 per cent helium and 95 per cent methane.
Renergen said it plans to case and cement the well shortly before draining all water and updating the flow readings from the well.
Meanwhile, the nearby R2D2 well is showing promise, too, with Renergen reporting prelimiary helium readings of between one per cent and 2.5 per cent.
Further, the company explained that the reading close to one per cent helium came despite the sample being diluted with air, suggesting R2D2 is in line with company pre-drill expectations.
Renergen CEO Stefano Marani described the drilling program in South African as a “big success” given four out of the six planned wells struck gas.
“What is amazing is the wells never disappoint in delivering high helium concentrations, and we now have developed a good roadmap on how to target the gas bearing structures most effectively,” Mr Marani said.
The two wells that didn’t strike gas, known as P10 and P12, will now be plugged and abandoned, though Renergen said the data gathered from these two wells was still valuable for refining future targets.
Alongside the drilling results from the Johannesburg wells, Renergen also released its latest quarterly financial report this morning.
In the report, the company said it is continuing to work towards marketing the helium from its South African gas operations, though there are no new updates at this point in time.
Between its operating and exploration work, the company posted net cash outflows of R$27 million (A$2.5 million). This does not include the R$69.5 million (A$6.5 million) the company spent as investments into its property, plant, and equipment.
Nevertheless, the company still had just shy of R125 million (A$11.6 million) worth of funding available at the end of May, meaning if spending remains consistent, Renergen still has over a year left of cash and debt available.
Shares in Renergen were up 3.61 per cent and trading at $1.72 each at 10:35 am AEST. The company has a $210 million market cap.