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Prospective Resources of Helium In Virginia Licence Area
RENERGEN LIMITED
Incorporated in the Republic of South Africa
(Registration number: 2014/195093/06)
JSE Share code: REN
A2X Share code: REN
ISIN: ZAE000202610
LEI: 378900B1512179F35A69
Australian Business Number (ABN): 93 998 352 675
ASX Share code: RLT
(“Renergen” or “the Company”)
PROSPECTIVE RESOURCES OF HELIUM IN VIRGINIA LICENCE AREA
As part of the Company's ongoing assessment and development of the Virginia Gas Project, Renergen
commissioned Dr Stuart Gilfillan (Senior Lecturer in Geochemistry) and Professor Finlay Stuart (Professor
of Isotope Geosciences) to conduct a conceptual study of the source abundance of helium, within the
Company's Virginia Production Right area (Report entitled “Conceptual study of helium in the Renergen
Virginia area, South Africa”, the "Edinburgh Report"). The Production Right area covers 187,000 hectares
in the Free State in South Africa around the towns of Welkom, Virginia and Theunissen, and the Company
has a valid licence over the area until 2042 (the “Production Right”). The Company holds 100% of the
economic interest in the Production Right.
With the benefit of this recently completed report, the Company requested its Reserves and Resources
accreditation agency Sproule (formerly known as MHA Petroleum Consultants) to review the report and
utilize it, if possible, to estimate helium Prospective Resources under the SPE PRMS standards. Sproule
has recently provided its report “Evaluation of Certain Helium Prospective Resources on the Tetra4
Virginia Gas Project, Free State, South Africa as of July 1, 2020” (“Sproule Report”). The following are two
extracts from the Sproule Report:
Extract 1
This evaluation, based on the analysis methodology described herein using technical data supplied by the
Company, has an effective date of July 1, 2020. The Prospective Resources presented in Table 1 below are
estimates of gross recoverable helium volumes which are undiscovered, but the likelihood of their
existence can be estimated. Following PRMS conventions, the 1U volume of Prospective Resources
represents the volume with a 90% chance of being recovered or exceeded, the P90 confidence level.
Similarly, the 2U volume corresponds to the median recovery, the P50 case. And the 3U volume is the
category for the largest 10% of the Prospective Resources, the P10 case.
TABLE 1 Prospective Helium Resources – Virginia Gas Project
Gross Recoverable Helium, Bcf 1U 2U 3U
Virginia Gas Project 32.52 106 344
Total Recoverable 32.52 106.28 344.22
The estimated quantities of helium resources that may potentially be recovered by the application of a future
development project(s) relate to undiscovered accumulations. These estimates have both an associated risk of
discovery and a risk of development. Further exploration appraisal and evaluation is required to estimate the
existence of a commercial quantity of potentially movable helium. Prospective Resources carry significant exploration
risk. All Prospective Resources volumes presented in this report are un-risked.
Previously Sproule (formerly known as MHA Petroleum Consultants) has evaluated the methane and
helium reserves and resources of the subject licences for Renergen in 2018 and 2019. Helium Reserves
and Contingent Resources were reported as components of the non-hydrocarbon gases of the project
however, no Prospective Helium Resources were assessed.
The independent resource and reserve estimates contained in this report are prepared in accordance with
the Society of Petroleum Engineers (SPE) Petroleum Resources Management (PRMS) guidance and
provides a Technical Value, defined as an assessment of a mineral asset’s future assessment at the
valuation date under a set of assumptions deemed most appropriate by a practitioner excluding any
premium or discount to account for market considerations. These estimates are also in accordance with
the Australian Stock Exchange (ASX) rules (specifically Chapter 05 for Oil and Gas Companies) and in
conjunction with the SPE PRMS guidance and specific additional rules. Our evaluation is based upon data
supplied by the Company, supplemented where necessary by Sproule’s corporate awareness of current
South Africa industry costs and best practices.
Extract 2
Methodology
Spoule evaluated the volumes of helium that are available for Prospective Resources in the Virginia Gas
Development Project by use of a probabilistic methodology to account for the early stage exploration
phase and the wide range of uncertainty in many variables. Technically recoverable helium resources
were calculated as the product of a) the range of volumes of helium generated as discussed in the
Edinburgh report, b) migration/entrapment factors to describe captured helium yet remaining in the
Project and, c) a recovery factors which represents the fraction of trapped helium which can be recovered
using current technology with no consideration of price.
Further details are included in the full copy of the report, which can be found on the Company’s website
https://www.renergen.co.za/wp-content/uploads/2020/07/2020-Helium-Prospective-Resources-Final-
signed-v21.pdf The Company has previously published helium reserves and resources estimated by
Sproule, reporting 6.8 BCF Proven and recoverable reserves, and 20.9 BCF of Contingent Resources (MHA
Petroleum Consultants’ Reserve and Resource Evaluation Report dated 1 March 2019
https://www.asx.com.au/asxpdf/20190605/pdf/445mnpv2g02vx7.pdf). Sproule has advised that it sees
the Edinburgh Report as substantiating their assumptions with regards to the origination and timing of
the helium volumes in the earlier reports (contingent resources and reserves). Sproule has used this new
information in association with the historic data to quantify these additional prospective helium resources
which have not been previously reported.
Overview of Reports
It is accepted that helium production in the Earth's crust is primarily controlled by the radioactive decay
of certain isotopes of uranium and thorium, so that the helium concentration in any rock or mineral
deposit is dependent on its radioelement concentration and the age of the deposit.
The Vredefort impact was a meteor strike in South Africa which occurred around 2 billion years ago, and
resulted in the largest known crater globally. This impact has been shown to have resulted in a complete
change of the landscape and ultimately resulted in the Witwatersrand basin. The Karoo sediments were
deposited after the impact, and it is these sediments which then acted as a trap to keep helium in situ.
The Edinburgh Report has been based on the geological history and stratigraphy of the Production Right
area at the Virginia Gas Project as detailed in a comprehensive report prepared by the Company's
geological consultants, Shango Solutions (the "Shango Report"). The Shango Report quantifies the
tonnage of high concentration uranium and thorium deposits within the Production Right area, their age
and structural configuration, based on an extensive database of drill intersections and other information
from the long history of exploration for, and production of, valuable minerals (precious metals, diamonds,
coal etc) in the area.The Edinburgh Report estimates helium generation historically, based on the average
uranium and thorium concentrations, mass, and estimated age of the principal source beds in the
Production Right area, together with established helium production rates cited in scientific literature. The
Sproule Report takes the Edinburgh Report’s estimates of volumes of helium generated post the
Vredefort impact event and from these estimates evaluates the volumes of helium that are available for
Prospective Resources in the project area using a probabilistic methodology to account for the early stage
exploration phase and the wide range of uncertainty in many variables.
The Sproule Report, the Edinburgh Report, and the Shango Report were prepared for the Company as
information sources to further develop an understanding of the origins of helium discovered in the area;
and to inform the optimisation of its production, based on postulated migratory mechanisms; and to
assist in planning for a material expansion (Phase 2) of the currently developing (Phase 1) gas project.
Further appraisal is required, and the Company intends to commence drilling a series of inclined wells to
intersect the gas-bearing faults and fissures to further appraise the full extent of the opportunity and the
economic recoverability.
Renergen has also retained Sproule to update the Company's Reserves and Resources following the
recent horizontal well, the Shango Report, the Edinburgh Report, the Sproule Report, and the results from
the impending inclined-well drilling programme when available.
Johannesburg
7 July 2020
Authorised by: Stefano Marani
Chief Executive Officer
Designated Advisor
PSG Capital
Competent Persons Statement
The Sproule Report was prepared by qualified reserves evaluators Jeffrey B. Aldrich (Sr. Geoscientist) and
John Seidle (Sr. Reservoir Engineer), who are both qualified in accordance with ASX Listing Rule 5.41. Mr
Aldrich and Mr Seidle consented to the inclusion of the information in this announcement in writing prior
to its release. The estimates included in the report have been compiled in accordance with the Society of
Petroleum Engineers (SPE) Petroleum Resources Management (PRMS) and South African Code for the
Reporting of Oil and Gas Resources (SAMOG).
For Australian Investors & Media, contact Citadel-MAGNUS
Cameron Gilenko, 0466 984 953
To readers reviewing this announcement on the Stock Exchange News Service (SENS), this announcement
may contain graphics and/or images which can be found in the PDF version posted on the Company’s
website.
To readers reviewing this announcement who wish to find out more about LNG, watch our LNG video,
which is posted on the Company’s website https://www.renergen.co.za/videos/
www.renergen.co.za
For South African investor inquiries, contact Renergen
info@renergen.co.za
+2710 045 6000
For South African media enquiries, contact OwnAlchemy
Michael Rubenstein
+2782 903 7797
michael@ownalchemy.com
About Renergen
Renergen is an emerging producer of helium and liquefied natural gas (LNG), with existing production and
sales of gas to buses in the Free State. Renergen was listed on Johannesburg’s AltX securities exchange in
June 2015 as South Africa’s first listed alternative and renewable energy company. Renergen listed on the
Australian Securities Exchange (ASX) on the 6th June 2019, with the code RLT. Renergen’s principal asset
is its 100% shareholding in Tetra4, which holds the first and only onshore petroleum production right in
South Africa, giving it first mover advantage on distribution of domestic natural gas, along with the
potential to become one of the major global helium suppliers, making South Africa only the 8th country in
the world to export this extremely rare gas.
Date: 07-07-2020 08:30:00
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