Natural gas and helium group Renergen’s share jumped as much as 10.7% on Tuesday morning after it reported a gas strike during exploration efforts in the Free State.
The well was drilled to inform the group about possible resources for phase two of its Virginia Gas Project in the Free State, SA’s only onshore petroleum development and which contains one of the richest helium concentrations recorded globally.
The success of the well, P007, is significant, as it is in an area outside the primary focus area for reserves to be exploited in phase one development, which is under construction, Renergen said on Tuesday. Importantly, is in proximity to the phase one gas-gathering system.
The current flow recorded more than 200,000 cubic feet a day, Renergen said.
“This is a truly spectacular result, with flow rates higher than almost all other wells in the existing areas,” said CEO Stefano Marani. “What makes the gas strike at P007 even more impressive is that it was one of our wild-card exploration wells,” he said.
Gas samples have been collected to determine gas composition, including helium concentration.
Helium is important for the medical industry and is used for cooling in magnetic resonance imaging (MRI) machines. It is also needed for the manufacture of fibreoptic cables, cooling during the production of nuclear power and the propulsion of rockets into space. It is a key input for the defence industry, as well as for balloons.
In morning trade on Tuesday, Renergen’s share was up 8.27% to R20.03, having earlier risen to as much as R20.49. The group, which is valued at R2.35bn on the JSE, has seen its share rise 58% so far in 2021.
9 March 2021