The site of Renergen’s onshore liquid natural gas and helium production facility near Virginia in the Free State. Picture: supplied
The share price of helium and liquid natural gas (LNG) exploration company Renergen continued to fall on Thursday, by up to 3% to R4.44, bringing its slide to over 36% in only the first few days of 2025 amid speculation about the company’s gas reserves.
Thursday’s drop in the share price brings the slide over a 12-month period to over 66%, making it one of the worst performers on the JSE, even though the company’s management only days ago tried to address the volatility in the share price, which it said appeared to be driven by incorrect media and social media reports.
Renergen management said yesterday in response to Business Report questions that they did not wish to add to their previous statement, but they would update the market in “due course.”
They stated in a statement on January 10 that the Phase 1 plant was producing LNG from its well and was selling this LNG to its customers. The Phase 1 plant was also liquefying pure helium sourced from its wells.
Regarding the purity of its helium, something that has also been questioned in the media recently, it said its liquid helium achieved a purity of a minimum of 99.999%, as verified by two independent facilities, NECSA Laboratories, a subsidiary of the South African Nuclear Energy Corporation, and Air Products.
For shareholders, the current speculation will have compounded other pre-existing concerns at the company, such as environmental and regulatory objections, delays in the build-up to production, and the fact that the debt pile was building from the company having to spend more on operations than it has so far been able to produce from sales.
The company addressed the liquidity concerns in its recent quarterly report to December 31, where it said that it retains the ability to draw down on the funding if required, and it advised shareholders that it had not entered into business rescue proceedings.
Anthony Clark, a well-known independent analyst specialising in small to mid-cap listed company shares, said he could not comment as there was a “vacuum” of information on the company at present, and its share price seemed to have fallen prey to “short sellers and scandal mongers” on social media.
Thursday’s decline in the price came a day after Cilandia Capital investment manager Albie Cilliers, a well-known shareholder activist who has questioned various matters at Renergen for some time, was cited in the online Daily Investor publication and on the social media platform X, where he alleged that Renergen did not have the gas reserves it claims to have. The company has said that it relied on the reports of independent analysts to reach its reserves conclusions.
The company’s website says that while some producers struggled with concentrations as low as 0.04%, Renergen’s wells boasted concentrations exceeding 3%, with some reaching as high as 12%. Cilliers also questioned the ability of Renergen to sell LNG profitably.
Renergen’s results for the six months to August 31, 2024, saw revenue increase by 8% to R25.61 million. However, its costs increased by 90%, and its gross profit fell from R10.76m to R882 000. The operating loss deepened to R65.13m.
BUSINESS REPORT