Renergen reports increased interim taxed loss but advances in Virginia Gas Project

Renergen increased its taxed loss to R139.7 million from R70.4m for the six months to end-August 2025, but it was a period of many initiatives aimed at getting the helium and liquefied natural gas (LNG) Virginia Gas Project (VGP) to run at nameplate capacity.

Funding agreements were executed to complete Phase 1 of South Africa's only onshore gas mining project. Additional wells were drilled, and construction of the gas gathering pipeline was undertaken to connect the wells. The construction of a third compressor station was started, CEO Stefano Marani said in the half-year financial results released on Friday.

The share price closed a sharp18.8% higher at R16.38 on Friday on the JSE. 

In addition, continuous improvement initiatives were advanced in the LNG and liquefied helium operations, while the pre-development phase of Phase 2 of the VGP continued.

"As we continue to ramp up production and achieve nameplate capacity, we expect our financial performance to improve significantly with the fixed cost spread across a larger revenue base," said Marani.

The period also saw the approval by Renergen shareholders of the offer by Nasdaq-listed ASP Isotopes to acquire 100% of Renergen's shares, as well as the approval of the offer by the Competition Commission. A $30m loan was advanced by ASP Isotopes' South Africa.

Renergen’s first half LNG and liquefied helium production came to 2 287 tons and a minimal 52.6 kilograms respectively, with the first-time delivery of helium taking place in March 2025. This compared with 2 388 tons and nil kilograms respectively at the same time last year.

After first delivery of helium in March, production was "strategically halted" until feed gas volumes reached the minimum threshold to justify continued operations.

The He4u consortium, which comprises Chart Industries, WBHO, and Aurex Constructors, was awarded preferential bidder status for the design, procurement, delivery, construction, and commissioning of Phase 2 of the VGP.

The appointment of an EPC (engineering, procurement, and construction) contractor was a critical remaining condition for a Phase 2 loan to be granted by the US Development Finance Corporation.

Factors that resulted in the taxed loss included a gross loss of R28.7m versus a R0.9m loss at the same time last year, an increase in operating expenses to R112.1m from R80.6m, higher foreign exchange gains of R10.5m to R26.8m, a R50.2m increase in interest expense to R75.4m, and an increase of R30.3m in the deferred tax credit to R45.1m.

Two vertical seismic data sets were acquired during the period, and drilling had commenced with initial wells.

On the helium operations, the current focus was on completing the Phase 1C drilling and exploration program, concurrently with further optimisation to ensure efficient production and filling of ISO containers once nameplate capacity is achieved.

There had also been favourable litigation outcomes through the six months, including a beneficial financial settlement and co-existence agreement with Springbok Solar, as well as a positive resolution in a dispute with the National Energy Regulator of South Africa.

Looking ahead, key priorities were to finalise the ASP Isotopes offer conditions, complete Phase 1C drilling, the pipeline and third compressor station construction, ramp up LNG and helium production to nameplate capacity, increase the efficiency and reliability of operations, and finalise the Phase 2 pre-development permitting requirements.

ASP Isotopes, an advanced materials company, was listed on Nasdaq in November 2022 and has operations across multiple jurisdictions, primarily through its subsidiaries in Guernsey, South Africa, and the UK.

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