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EDISON INVESTMENT RESEARCH LIMITED Edison Investment Research Limited: Edison issues outlook on Renergen (RENJ)

Directive transparence : information réglementée

26/06/2019 12:07

Edison Investment Research Limited
Edison Investment Research Limited: Edison issues outlook on Renergen (RENJ)

26-Jun-2019 / 11:07 GMT/BST


London, UK, 26 June 2019

Edison issues outlook on Renergen (RENJ)

Renergen is fully funded for stage one development of its flagship Virginia Gas Project in South Africa. This initial phase of development will produce c 19k tons of LNG and c 112 tons of helium per year. We estimate cash flow from operations of c ZAR91.0m, after first production in FY22. We value Renergen based on the monetisation of the company's audited 2P reserve base, on the basis of staged development as set out in the company's ASX IPO prospectus. Key investment considerations include the pace of LNG adoption in the South African trucking market and realisable LNG prices. Our risked valuation, inclusive of the company's entire 2P reserve base (net 138.3bcf of methane and 3.3bcf of helium), is ZAR20.5/share.

Our base case valuation, based on net methane 2P reserves of c 138.3bcf and net helium 2P reserves of 3.3bcf, generates a NAV of ZAR20.5/share. This includes adjustments for commercial and development risk, potentially conservative long-term LNG price assumptions and a discount rate of 12.5%. Limiting our valuation only to stage one results in a valuation of ZAR6.2/share (A$0.63/share). Successful delivery of stage one should, in our view, de-risk further phases of development.

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About Edison: Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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For more information please contact Edison:

Sanjeev Bahl, +44 (0)20 3077 5700
Elaine Reynolds, +44 (0)20 3077 5713
Carlos Gomes, +44 (0)20 3077 5700
oilandgas@edisongroup.com

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831373  26-Jun-2019 

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