Another day, another company entering the green hydrogen space – today it was Indonesia-focused oil stock Lion Energy (ASX:LIO).

After years of discussions not backed up by the same amount of action (at least in Australia), the past several months has seen several ASX listed companies pivot into the space.

Green hydrogen burns cleanly and emits only water and has potential to bring down emissions in industries such as transport and manufacturing.

While the cost of production remains higher than fossil fuels, the future potential has been enough for any ASX stock to pivot into this space to be rewarded.

Ex-rare earths play Hexagon (ASX: HXG) has doubled since buying a hydrogen project in the Northern Territory late last year. Province Resources (ASX:PRL) is nearly a 10-bagger in as many weeks after acquiring projects in WA.

And today Lion Energy rose over 70 per cent, making it one of the ASX’s biggest winners this morning.

Lion Energy (ASX:LIO) share price chart


Big deal?

Lion Energy has committed to explore opportunities in green hydrogen in Australia as well as on Seram Island Indonesia where it currently has oil interests.

The company will raise $2.8 million to explore these opportunities and undertake hydrogen studies – hiring Peak Asset Management as lead manager.

Lion Energy chairman Tom Soulsby admitted the foray was only “potential” but it was a deliberate choice to hire Peak.

“Peak brings a wealth of experience in supporting companies with green hydrogen and renewable investment businesses in Australia,” he said.

And he is right. Peak’s clientele include Countrywide Renewable Energy – a private company that is eyeing an ASX listing in 2021.

The capital raise will be completed in three different tranches as the total amount is a higher proportion of Lion’s Energy market cap that can be raised without shareholder approval – 15 per cent.

All but $933,000 will be raised in the form of convertible notes.