{"id":258,"date":"2021-03-02T01:00:00","date_gmt":"2021-03-02T01:00:00","guid":{"rendered":"http:\/\/bluegemresearch.co.za\/?p=258"},"modified":"2021-03-01T12:08:13","modified_gmt":"2021-03-01T12:08:13","slug":"renergen-initiation-of-coverage-lighter-than-air-falling-to-the-bottom-line","status":"publish","type":"post","link":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/?p=258","title":{"rendered":"Renergen &#8211; Initiation of Coverage &#8211; Lighter-than-Air Falling to the Bottom-Line"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><em>Share Code: REN \u2013 Market Cap: R2.3bn \u2013 PE: -34.9x \u2013 DY: 0.0%<\/em><\/p>\n\n\n\n<div class=\"wp-block-file\"><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2021\/03\/Renergen_Initiation-of-Coverage-1.pdf\">Renergen &#8211; Initiation of Coverage<\/a><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2021\/03\/Renergen_Initiation-of-Coverage-1.pdf\" class=\"wp-block-file__button\" download>Download<\/a><\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Business Overview: Near-term Helium &amp; LNG Producer<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Renergen owns an onshore petroleum production right to the \u201cVirginia Gas Project\u201d that is rich in methane (LNG) and helium and the Group is developing in a two-phased approach.<\/li><li>Renergen is in a formidable position to move up the value-curve as Phase One nears first-production.<\/li><li>Importantly, the Virginia\u2019s Phase Two could be multiples the size of Phase One and unlock staggering value in the Group.<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>LNG &amp; Helium Markets: Attractive Prospects<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>South Africa is an energy-scarce economic region with both a good potential LNG demand and a potential supply deficit of the gas in its near-future as some existing assets come offline.<\/li><li>The global helium market is opaquer, but the recent drop-off in USA supply and uncertainty around Russia\u2019s planned supply growth combine to imply tight(er) helium supplies post-pandemic. Finally, the major consumers of helium (aerospace, semiconductors &amp; MRIs) are all above-average growth vectors and cannot substitute helium for anything else.<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Forecast, Valuation and Implied Return: Upside Apparent<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Our DCF-driven sum-of-the-parts (SOTP) valuation for Renergen implies Phase One &amp; Two\u2014offset by central costs, debt and (potential) dilution\u2014are worth 3539cps. After options for Evander and Cryo-Vacc are added, we see Renergen\u2019s share as potentially worth c.4247cps.<\/li><li>Rolled-forward by CoE, our 12m TP is 4977cps.<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Key Up- &amp; Downside Risks: Lots of Moving Parts<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Running a sensitivity analysis on our model highlights that Renergen\u2019s valuation is more sensitive to helium than LNG, but both prices are ultimately sensitive to the USD\/ZAR rate.<\/li><li>Inflation, production, and resource risks also exist here.<\/li><\/ul>\n\n\n\n<div class=\"wp-block-file\"><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2021\/03\/Renergen_Initiation-of-Coverage-1.pdf\">Renergen &#8211; Initiation of Coverage<\/a><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2021\/03\/Renergen_Initiation-of-Coverage-1.pdf\" class=\"wp-block-file__button\" download>Download<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Share Code: REN \u2013 Market Cap: R2.3bn \u2013 PE: -34.9x \u2013 DY: 0.0% Business Overview: Near-term Helium &amp; LNG Producer Renergen owns an onshore petroleum production right to the \u201cVirginia Gas Project\u201d that is rich in methane (LNG) and helium and the Group is developing in a two-phased approach. Renergen is in a formidable position [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[100],"tags":[108,106,103,80,109,102,101,16,110],"class_list":["post-258","post","type-post","status-publish","format-standard","hentry","category-renergen-ren","tag-energy","tag-gas-play","tag-helium","tag-investment","tag-production","tag-ren","tag-renergen","tag-south-africa","tag-virginia-gas-project"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/258","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=258"}],"version-history":[{"count":2,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/258\/revisions"}],"predecessor-version":[{"id":263,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/258\/revisions\/263"}],"wp:attachment":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=258"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=258"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=258"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}