Synertec’s multi-channel clean technology strategy validated after signing an MOU with Santos and completing strategic $7m cap raise
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The funds raised will give SOP the balance sheet strength to advance its projects through their next stage of development.
Diversified technology company Synertec Corp (ASX:SOP) has laid the foundations for its next phase of growth, after successfully executing on a strategic $7.1m share placement.
The capital raising announcement was accompanied this morning by a string of exciting operational updates, as the company builds momentum across its portfolio of ESG-focused technologies.
And with its latest funding round, SOP is positioned to continue the development of its IP as it capitalises on the global shift towards clean energy solutions, with an existing suite of tier-one clients and R&D partnerships with a number of multinational energy companies.
SOP confirmed that it’s received binding commitments to raise $7.1m via the issue of 71.4m shares at 10c.
The offer price marks a 9% discount to Synertec’s last traded price of 11c. The placement was corner-stoned by tier one institutional investors Perennial Value Management and SG Hiscock, providing a strong endorsement for the company’s prospects.
The funds raised will give Synertec the balance sheet strength to fund two core initiatives; scaling up its expanding portfolio of ESG-focused technology for the energy sector, and its growing portfolio of engineering solutions for a blue-chip customer base.
Synertec Chair Dennis Lin said the extra funding comes at a crucial time for the company, as it looks to capitalise on its diversified growth strategy centred around “energy-focused, environmentally-friendly technologies which we are developing with our strong engineering team”.
Accompanying its capital raise announcement, Synertec provided an update on its project with oil & gas major Santos – a long-term client of the company.
The two sides have signed a Memorandum of Understanding (MoU) for Synertec to develop a renewable energy power system based on solar and battery inputs.
The power system is being designed to meet the energy requirements for sustainable well de-watering at Santos’ Myalla coal-seam-gas development in Roma, Queensland.
Under the terms of the MoU, which was effective from last Friday, Synertec will progress development of the solar energy power system, including in-field testing.
“Santos will support these activities by providing pilot field site access, inputs into the project design, technical information pertaining to the pilot field sites, and technical and other engineering resources,” the company said.
Commercial terms will be negotiated over the course of the next 12 months, based on the achievement of key development milestones, SOP said.
“We are excited to work with Santos, a long-time customer of Synertec, on this advanced energy infrastructure project,” Carroll said.
He added that the sustainable energy solution forms a key part of Synertec’s product suite, alongside its CDP processing technology.
Along with its capital raise, Synertec flagged an important step forward in the development of its composite dry powder (CDP) technology.
The company holds an exclusive worldwide license agreement with China-based green energy company Sichuan GreenTech Environmental Co, to develop and commercialise GreenTech’s CDP technology used in the treatment of hydrocarbon drilling mud.
And this morning, Synertec advised that it has excercised it’s right to extended that licence for another 12 months (to September 2022).
Managing director Michael Carroll said the development is the result of months of hard work amid complications from the global pandemic.
“Since we commenced our partnership with GreenTech in 2020, Synertec has been increasingly impressed by the trial results, industry feedback and commercial potential displayed by CDP,” Carroll said.
“It’s also a logical and sensible progression of the CDP technology for our respective companies as the world continues to battle the challenges of COVID-19.”
Lastly, SOP provided an operational update on the development of its unique CTS technology – the company’s solution to address inaccuracies in LNG sampling systems on board gas carriers.
Development is progressing “as planned” with Synertec’s strategic partner, which is one the “the world’s largest providers of LNG shipping solutions and services”, the company said.
Accredited registrar group DNV GL, headquartered in Norway, has now completed an international Hazard and Operability study (HAZOP) based on Synertec’s design, and SOP “expects this design to be fully certified by DNV in the current quarter”.
As a result, it’s now on track to achieve certified development status for a crucial piece of LNG and technology, designed specifically to prevent the escape of greenhouse gas emissions during the gas sampling process.
When deployed, Synertec’s customers will benefit from a reduction in sampling inaccuracy in low-pressure LNG environments, which are most common in ship-to-ship transfer scenarios.
We continue to see demand growing for this environmentally friendly technology, both in Australia and globally, as newly-imposed marine regulations are driving a long-term transition towards LNG as the marine fuel of choice for cleaner sea vessels and coastal LNG storage and regasification facilities,” Carroll said.
“All three of the technologies in our current portfolio are now evenly poised at the starting line and offer exciting potential for commercialisation in FY22.”
This article was developed in collaboration with Synertec Corporation, 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.