Renergen records a 24% increase in reserves
Renergen Limited reported its condensed consolidated interim report for the six month period ended 31 August 2016.
- First revenue generation due to completion of compression station.
- Supplied over 63,000 diesel litres equivalent to Megabus up to 31 August 2016.
- Independent Reserve Update indicate 24% increase of the total Proved and Probable Reserves to 100,927 million cubic feet (MMcf) from 2015.
- Independent reserve valuation now valued at R6.6 billion.
- Investigating meaningful base load power solutions to industrial companies in the Virginia area.
- Having delivered on our milestones to date, we have the pleasure to report our reserves are up 24%, losses per share are down by 95% as a result of our first revenue coming online, and operations are running smoothly.
- This has been a gratifying first six months with not only the plant coming into operation but also reserve valuations increasing on the back of additional gas discoveries from our drilling campaign. We expect the full-year will continue to be as eventful as we bulk up operations and prepare for bringing the whole field into full-scale production.
This is the first full six-month period, since the acquisition of Tetra4 Proprietary Limited (“Tetra4”), on which Renergen is reporting.
Production commenced on 24 May 2016 with compression taking place from the first of our current 12 wells. The buses commenced operation in two phases over the period of a month and saw the buses operating at capacity during June 2016, well ahead of our intended schedule. July, August, and September 2016 have seen all ten buses operating at full capacity.
A total capital expenditure of R11.4 million was incurred during the period relating to the construction of the compression facility.
The plant faced some early challenges after commissioning, which enabled us to test and implement our contingency measures to ensure that Megabus Proprietary Limited (“Megabus”) had a consistent gas supply.
The plant is now fully operational and operating according to design specifications.
As announced on SENS on 5 October 2016 significant work was done from a geological perspective which has resulted in a 24% increase in the total Proved and Probable Reserves to 100,927 MMcf in comparison to the Independent Reserves Update Report included in the circular distributed to shareholders on 28 October 2015 (“the 2015 Report”). Our independent reserve valuation is now valued at R6.6 billion based on current economic factors.
Renergen continues to operate as going concern despite the losses incurred in the six months to 31 August 2016. Total assets remain significantly higher than total liabilities. The board of directors of Renergen (“the Board”) has ensured that the Company has sufficient cash resources to meet its strategic objectives and financial obligations.
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