• Pure Hydrogen selling 30% stake in Serowe CBM project to Botala Energy for $750,000 in cash and 14.5 million BTE shares
  • Sale increases company’s stake in BTE up from 16.5% to 23.2%
  • Both companies to continue advancing the Botswana H2 renewable energy joint venture

 

Special Report: Pure Hydrogen is divesting its 30% interest in the Serowe coalbed methane project in Botswana to operator Botala Energy for $750,000 in cash and 14.5 million Botala shares to focus on its hydrogen initiatives.

Serowe sits within a high-grade CBM region and hosts Project Pitse, the first commercial pilot project in the project area.

Project Pitse has independently certified 2C (best estimate) contingent resource of 317 billion cubic feet (Bcf) based off five historical exploration wells that all intersected 24-40m of net coal, including the prospecting Serowe and Upper Morupule formations.

One of these – Serowe 3.1 – was spudded back in July 2021 and already has flowed gas to surface, proving that target coals have opened up and are now degassing.

The remaining four wells in the pilot were drilled over the past couple of months and are collectively expected to generate revenue from gas production.

 

Still leveraged to the upside

For Pure Hydrogen (ASX:PH2), the sale will increase its stake in Botala Energy (ASX:BTE) up from 16.5% to 23.2%, ensuring that it remains leveraged to the success upside at Serowe while removing the requirement to invest in its ongoing development at the asset level.

The two companies will also continue to advance their Botswana H2 joint venture, which seeks to produce 50MW of power generation from hydrogen, solar and other green energy projects.

The divestment unlocks strategic capital for PH2 to accelerate development of its hydrogen-focused technologies and partnerships, including a network of hydrogen production and refuelling hubs and the supply of commercial vehicles and hydrogen-powered generators.

The planned hydrogen hub is expected to be one of the largest in Africa with the Botswana government signalling a significant commitment to developing clean energy projects.

“Converting our 30% interest in Serowe into an increased shareholding in Botala strengthens our equity interest in what is an excellent company and allows us simplify our activities and focus our efforts and funding commitments to our hydrogen business including Hdrive.,” PH2 managing director Scott Brown said.

“We have effectively minimised and limited our funding for this project, but still maintained an upside exposure to the Serowe Project through our shareholding in Botala.”

“We are excited by the rapid development of Botswana H2. We can very readily bring the best technologies to the joint venture in terms of hydrogen fuel production and all the associated transport infrastructure to develop the full value chain from fuel, refuelling infrastructure and commercial vehicles.”

“Botswana is strategically located in Africa and it is a great market to commence our operations here, underpinned by a government committed to developing clean energy projects.”

BTE chief executive officer Kris Martinick said the transaction allowed both companies to focus on their core objectives.

“Owning the project outright allows us to negotiate with potential partners for the next growth step in the project’s development,” he added.

 

This article was developed in collaboration with Pure Hydrogen, 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.

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