Hannam & Partners - 60 page Renergen Research Report, page-7

Some extracts from the report:

"the higher than expected helium content and better than expected wells mean that Renergen could look to double its helium production after Phase 2 is operational."

"It is the only onshore natural gas producer in South Africa: an energy-scarce area, with high customer density and limited competition."

"Renergen’s CryoVacc business is early stage but has proved commerciality and there is the potential to scale up over the next year as it takes its product to the market, first to DPD Laser and withother potential customers in the pipeline. We currently carry no value for this business in our NAV."

"We have modelled out Phase 2, assuming FID is taken later this year. Total capex works out to around US$3/mcf of total gas recovered. We assume that production will start in 2024 and ramping up to around full capacity by 2026. At plateau we see the field generating around US$300mm of EBITDA."

So they see about US$300m/yr in EBITDA once Phase 2 is online. This number could be conservative potentially if for instance Renergen can get high premiums for the 35% of the helium to be sold to the spot market and when you consider also limited competition on the LNG side of the business.

Then there is the potential for helium production to double after Phase 2 is operational.

Also as I understand it for every 15000 units of the cryo-vacc Renergen can get in the field if it proves successful is equivalent to Phase 2's baseline or about another US$300m/yr. Noting the cryo-vacc wasn't included in H&P's calculations.

So overall US$300m/yr might be conservative once Phase 2 is operational and with some luck we could see a higher number. If for instance cryo-vacc is successful and Phase 2 helium output is doubled after its in production you might see revenues towards or exceeding US$1b/yr. I wonder what the market cap is for stocks on the ASX with revenues of US$1b/yr ?

Remembering today there is still only 123m shares on issue and management's goal per the recent FinMeUp interview is for dividends once Phase 2 is operational. So interesting to see how much dilution may need to occur to fund Phase 2. Figures of 25m - 75m additional shares were mentioned with the recent reserves update for Phase 2.