Today’s standout ASX gas stock was bioenergy play Delorean
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There were a handful of gas stocks with news this morning and the standout was biogas play Delorean (ASX:DEL).
Many oil and gas stocks have gained this year, many off the back of little to no news albeit with oil prices rising from the lows seen in 2020.
Monday is typically a busy morning for oil and gas stocks, with many – particularly those with operations in North America – opting to provide operational updates after Friday over there.
Today’s top performer was Delorean (ASX:DEL) which only listed on the ASX last month. The bioenergy company specialises in a process called anaerobic digestion which breaks down various wastes to output green power.
While it has operated one project in WA for a number of years it has others under development, one of which was the Sailsbury project South Australia. At the time of its IPO Delorean only owned 30 per cent of the project but today it has snapped up the other 70 per cent for $2.1 million.
The company says the project will be the first of its kind (“green gas to mains”) in Australia and it hopes to begin construction before September (and generate the first green gas 12 months thereafter) subject to obtaining finance and a Final Investment Decision (FID) in the affirmative.
“Renewable gas is key in decarbonising the gas network and we are pleased to be pioneering this with a project at commercial scale in Australia,” said Delorean managing director Joe Oliver.
Shares in the ASX biogas play rose by as much as 12 per cent in early trade. While shares are off their all time highs seen on its listing day, they are still above the IPO price.
Another ASX stock looking to eventually supply Australia’s gas network is Queensland focused Galilee Energy (ASX:GLL).
Galilee specialises in CSG which is a type of gas but is explored by pumping solid materials and fluids into the seam to induce fractures rather than by drilling into rock formations. But prior to gas extraction, the seam must be “de-watered” to reduce pressure before gas production.
Today it told shareholders it has produced 19,000 barrels of water per day and the natural gas rate was increasing. It’s currently 60 Mscfd.
It also said a pilot pump enhancement workover programme was nearing completion – in other words installing larger capacity pumps – and it had resulted in a water flow rate 30 per cent higher.
WA focused Strike Energy (ASX:STX) rounded out the list today.
Strike said it had begun drilling operations at West Eregulla (WE) 5 and completed drilling the first hole sections down to approximately 1,567 metres. Additionally it had begun flow testing at WE4.
The current campaign is an attempt to appraise the discovery made West Erregulla-2 which sent it and joint venture partner Warrego Energy (ASX:WGO) rocketing in the back half of 2019.