In South Africa, AltX-listed Renergen has secured the first and only local onshore natural gas rights, by paying ZAR650 million ($50.3 million) to buy 90% of Australia’s Molopo South Africa, reported the Business Report on Tuesday.
Molopo secured the natural gas rights, via Molopo South Africa Exploration, for over 200,000 hectares of land in the Free State province in 2012.
Renergen recently acquired the asset through its acquisition of Molopo South Africa, just three months after it listed on the Johannesburg Stock Exchange’s AltX.
According to the Business Report, the asset has proven reserves worth ZAR2.2 billion ($170.5 million).
Investment in natural gas rights
In a statement to Renergen shareholders, chairman Brett Kimber notes the company – previously known as Dominica Trade – sees Molopo as an “attractive renewable energy opportunity”.
Molopo is building a vertically integrated business model aimed at offering “wellhead to tank” solutions for clients in the Free State province.
Windfall Energy had previously bought the asset in 2013 and developed it to its current state as part of a portfolio of assets, which include farm-in rights to two other natural gas assets in South Africa.
Renergen aims to provide compressed natural gas to the auto, industrial and specialised markets as well as sell liquefied helium.
Renewable energy opportunities
Renergen explained it purchased Molopo because it wants to “capitalise on the current undersupply of alternative and renewable energy”.
It says the asset, which includes natural gas rights, can be integrated into its supply chain in South Africa and sub-Saharan Africa.
“Molopo’s assets have been brought up from initially an exploration asset to production status and are close to production,” said a company statement.
Renergen is a special purpose acquisition company focused on the alternative and renewable energy sectors in South Africa and sub-Saharan Africa, reported the Business Report.
It raised ZAR74 million ($5.7 million) through a private placement with investors including its directors, who hold 5% among themselves.
Mazi Capital currently owns 67.6% of the company, while Sanlam Investment Management and BCI Institutional Worldwide Flexible Fund own 6.8% each.
Kimber adds the company will achieve “another significant milestone” once Molopo starts generating revenue in the first half of 2016.
The deal, which is subject to customary conditions, will be paid for through the issue of 70 million shares and ZAR5 million in cash.