Our opinion on the current state of RENERGEN(REN)

Renergen (REN) brands itself as an "integrated alternative energy business" focused on renewable energy projects in Africa. Listed on the JSE in June 2015, the company has incurred consistent losses, contributing to its declining share price. Investing in liquefied natural gas (LNG) and helium, Renergen accessed additional funding through a R125 million rights issue and a R218 million loan facility. Its IPO on the Australian Stock Exchange (ASX) was oversubscribed by over two times. The company claims proven helium reserves exceeding 6 billion cubic feet. Helium was identified as a critical resource for U.S. national security in 2018, significantly boosting prices.

In 2020, Renergen announced the development of an aluminum case capable of maintaining vaccines at low temperatures for up to 30 days, which has the potential to be a significant innovation. The company also reported a 1.1% helium discovery at Evander in June 2021 and a major gas strike in the Karoo in March 2021. Additionally, in April 2021, it secured its first helium sales deal. In November 2021, a 620% increase in 1P helium reserves was announced, leading to a spike in the share price.

Despite these positive developments, Renergen's share price remains in a long-term downtrend. Further funding of $750 million was secured in June 2023 for the Virginia Gas project (VGP), which is its primary asset. In its latest financial results for the year ending February 29, 2024, the company reported a 128.4% increase in revenue but a headline loss of 75.07 cents per share, compared to a 19.89 cents loss previously.

Renergen acknowledged operational challenges at the VGP, which remains risky and volatile. Investors should approach with caution and consider a break above the long-term downward trendline before delving further, though such a breakout does not appear imminent.