Investors back Pilot Energy’s diversification into hydrogen
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New and existing shareholders are clearly on board with Pilot Energy’s strategic plan to establish itself as a leading oil & gas, hydrogen and renewables supplier to the Mid-West and South-West regions of Western Australia.
Pilot Energy (ASX:PGY) is advancing towards reinstatement on the ASX and, subject to ASX approvals, realising its ambitions of diversifying into the hydrogen and renewable energy sectors, having now secured firm commitments for an $8m placement arranged by Bridge Street Capital.
The company has a stake in the existing oil production from WA’s Cliff Head offshore field and has also identified new business opportunities in renewable energy sources.
These include the option of developing a renewable energy and hydrogen project in Mid-West WA, and a hydrogen and carbon capture and storage project in South-West WA.
Both locations are attractive for wind power generation due to the relatively high speed of coastal winds along the WA coastline.
To fund its oil, gas and hydrogen projects and feasibility studies into renewable projects, Pilot will undertake a placement of 133 million shares at 6c each to sophisticated, institutional and professional investors to raise the $8m.
“The company is very pleased with the strong backing from existing and new shareholders in supporting the capital raise and the exciting business plan going forward,” executive chairman Brad Lingo said.
“The next phase of the feasibility studies is crucially important to enabling Pilot to implement its strategic plans and become a leading energy provider of oil & gas, hydrogen and renewables to the Mid-West and South-West regions of Western Australia.”
Pilot is set to commence several detailed feasibility studies covering the potential development of large-scale renewable wind and solar power generation, clean hydrogen production and carbon management carbon capture and storage projects in the Mid-West and South-West of Western Australia.
Pilot’s proposal is to develop a large-scale renewable energy project utilising its existing oil and gas infrastructure and tenures in Western Australia’s Mid-West and South-West as anchor points for these potential developments.
Provided it is feasible, being able to reconfigure existing oil and gas facilities to also support renewables can save significantly on upfront capital for wind and solar farms and help to extend the operational lifespan of the existing infrastructure.
Pilot is also investigating carbon capture & storage and hydrogen projects in WA’s Mid-West and South-West, with wind, solar and green hydrogen proposals all being evaluated.
The energy transition is accelerating with the advancement of projects like the Oakajee Strategic Industrial Area renewable hydrogen project and the formation of the Fortescue Metals Group (ASX:FMG)-Kawasaki Heavy Industries global liquid hydrogen consortium to develop the Australia-Japan supply chain.
Technological advances have dramatically reduced the cost of solar and wind power projects and made them attractive for investment.
Hydrogen is also becoming a low-cost source for power generation with its cost falling below that of coal and natural gas.
Pilot has a new executive management team headed by experienced oil and gas professionals, Brad Lingo, executive chairman, and Tony Strasser, managing director. Both have extensive experience and successful track records in the development and project management of complex oil and gas projects, M&A and financing.
This article was developed in collaboration with Pilot Energy, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.