Hydrogen play Real Energy’s (ASX:RLE) ambition of becoming a significant gas operator has taken another step forward after its merger with delisted Strata-X Energy was heard by the Federal Court of Australia on 26 February.
While the Court requested for further information and adjourned the matter to 5 March, it still brings the merger closer towards completion.
The merger proposal was first announced in July last year, and represented a merger of equals where Real Energy shareholders will receive one new Strata X Energy share for every three Real Energy shares. The proposal was approved by both companies’ shareholders in December, with the combined company taking the name of Real’s subsidiary Pure Hydrogen.
Pure Hydrogen is scheduled to commence trading on the ASX on 18 March 2021.
Major player in eastern Australia
Pure Hydrogen, which is 100% owned by Real Energy, is currently managing five hydrogen projects, all located in the eastern coast of Australia.
The port hubs, including Project Saturn (in Miles), Project Jupiter (in Gladstone), Project Mars (in Mackay), Project Liberty North (Newcastle) and Project Liberty South (Port Anthony) – have been identified as the ideal locations for the company’s push into hydrogen manufacturing and fuel-cell technology.
The company is on track to build a significant hydrogen business from these bases, as it scours for new potential locations in the east coast of Australia.
Its recent deal in Port Anthony, for example, is targeting initial production of 20 tonnes per day, in which Pure Hydrogen owns a 70% stake. The Port Anthony site is said to be ideally suited to serve as a hydrogen hub given its proximity to major road routes – located less than 200km east of Melbourne in South Gippsland.
In addition to its hydrogen business, the company is also working on natural gas projects in Queensland and the Republic of Botswana. Its 100% owed Project Venus in Queensland’s Surat Basin is scheduled to commence in March 2021, and could offer the company early cash flow.
Its 51% interest in the Botswana Serowe CSG Project is also on track, with six test wells planned in 2021.
Merger benefits
Real Energy and Strata X Energy’s combined 100% interest in Project Venus means that the combined company will become a material gas operator in the east coast of Australia.
There are also a number of other benefits in merging, including cost savings from economies of scale.
Over the next 12 months, the combined companies plan to use innovative well completion and non-frack reservoir enhancement methods designed to prove commercial gas flows out of the Venus reservoir. These gas projects have ready gas markets in Australia