Top End Energy gallops into Serpentine natural hydrogen project in Kansas

Top End Energy acquiring Serpentine natural hydrogen project in Kansas
Serpentine project sits on much sought after ground adjacent to areas with recent exploration
Company has raised $6m to fund acquisition and expand lease holding ahead of drilling in H2 2025

Special Report: Top End Energy is spreading its wings after locking in the opportunity to acquire a natural hydrogen exploration project at the heart of an active land rush in Kansas.

The ~20,000 acre Serpentine project in Marshall, Riley and Washington counties is at the heart of a land rush prompted by historical observations of natural hydrogen and a recent surge in exploration activity such as seismic, drilling and well testing.

Natural hydrogen is hydrogen that is produced by certain geological processes such as when water reacts with certain rocks deep in the subsurface, before being trapped in reservoirs akin to those that host oil and gas.

Highlighting just how much value has been flowing into the sector, Denver-based Koloma – a global natural hydrogen leader with a focus on the US Midwest – has raised over US$380m in three years from clean energy investors such as Bill Gates’ Breakthrough Energy, Khosla Ventures and Amazon Climate Fund.

It also secured a US$50m investment from Mitsubishi Heavy Industries and Osaka Gas in October.

Top End Energy (ASX:TEE) has also raised $6m through a placement of shares to existing and new sophisticated investors to expand the Serpentine lease holdings ahead of drilling by multiple third-party explorers in the area, as well as the company’s planned drilling in H2 2025.

Serpentine project

The wholly-owned leases that make up the Serpentine project are focused on areas adjacent to recent exploration drilling where leasing is highly competitive.

Serpentine also benefits from regional access to rail, road, and gas pipelines to enable the delivery of hydrogen feedstock to downstream customers to support clean ammonia production for local Midwest US demand.

Ammonia fertiliser requires significant amounts of hydrogen that is currently derived from fossil fuel feedstocks.

TEE is acquiring Serpentine Energy, which holds the project, for $300,000 in cash, 107m in shares and more than 26.75m options exercisable at 15c and expiring three years from the date of issue.

As part of the agreement, it is appointing Serpentine Energy founder Luke Velterop as its vice president US operations with responsibility for driving all aspects of the project’s development and the company’s US hydrogen operations generally.

“I’m thrilled to join forces with Top End Energy to build a successful and impactful clean energy business,” Velterop said.

“Our Serpentine project delivers a strategic foothold in one of the world’s most competitive and fast-moving plays for natural hydrogen.

“This sector is capturing the attention of major energy players, as an opportunity to discover and unlock the first new primary source of energy in nearly a century.”

Placement

TEE received firm commitments from sophisticated investors to raise $6 million through the placement of 60 million shares priced at 10c.

Proceeds will be used to increase lease holdings in Kansas, technical studies, exploration drilling preparation, and explore the potential for expansion to other US states.

This article was developed in collaboration with Top End 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.