Gas to be converted to Hydrogen under Project Saturn Pure Hydrogen’s (ASX:PH2) upbeat gas flow results take share price zooming
September 16, 2021 11:22 AM AEST
Pure Hydrogen Corporation Limited confirms gas flow testing of Venus 1 Pilot Image source: Representation of gas emission. Source: © Logoboom | Megapixl.com
Highlights
Pure Hydrogen’s Venus-1 Pilot Well Test has served positive gas flow results.
The Venus pilot has proved gas breakout after 50 barrels of water production with continued gas pressure.
Gas from Venus to be converted to Hydrogen under Project Saturn.
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Australian East Coast Clean Energy Company, Pure Hydrogen Corporation Limited (ASX:PH2), on Thursday, confirmed the initial gas flow testing of its Venus 1 Pilot Well located on Project Venus in central Queensland. PH2 has shared that the project has now been completed with very encouraging results thus far.
Pure Hydrogen has also shared that the Well has now been shut-in. The Company’s technical team and third-party consultants will now focus on getting relevant approvals from the Queensland Government to carry out the proposed stimulation of the target coals to prove commercial gas flow rates.
Results from Project Venus:
The announcement has revealed that the project Venus contained high-quality Coal Seam Gas with very prospective acreage covering 154kmsq which falls within the main Walloon CSG Fairway and is also close to gas infrastructure. The maiden Venus 1 pilot well was drilled late last year and completed an initial flow test in late May 2021.
PH2 has also announced that the initial Venus pilot well test has proved gas breakout after 50 barrels of water production with continued gas pressure. It was built up and bleed off over the 3-month test period.
The initial gas breakout has proven the interpreted high gas saturation of the target upper Walloon coals seams. The flow test data analysis and modeling have shown that a more aggressive stimulation method needs to be applied to the target coals for achieving commercial gas flow rates. Hence, enabling the conversion of Contingent Resources to Reserves.
About Pure Hydrogen:
Pure Hydrogen Corporation Limited is an Australia-based clean energy company. It deals mainly in the Hydrogen and Gas production business.
Meanwhile, on the ASX, the PH2 stock was spotted trading 5.882% higher at AU$ 0.270 per share at 10:30 AM AEST.
Bottom line
The above-mentioned encouraging results from Project Venus have paved the way for the Company towards commercial gas flows and certification of the material gas project. In addition, it has opened up several opportunity doors for the Company’s future growth.
Pure Hydrogen’s unique technology for producing turquoise hydrogen with carbon by-products are what Pitt Street Research believes are significant competitive advantages.
In its research report, Pitt Street analysts Stuart Roberts and Cheng Ge highlighted the company’s technology advantages such as a modular plant that ensures production scalability and ability to relocate.
Pure Hydogen’s (ASX:PH2) unique methane pyrolysis method also is capable of producing about 1,500kg of turquoise hydrogen per day from methane at a lower cost than green hydrogen competitors using renewable energy to power electrolysers that split water into hydrogen and oxygen.
Adding further interest, the ability to produce high-value, solid carbon by-product such as graphite and carbon nanotubes, which are currently experiencing high demand due to their use in rapidly growing markets such as electric vehicle batteries, adds further to this competitive advantage.
The technology is also well-proven, enabling Pure Hydrogen to be an early mover in the sector.
This is highlighted by the company working on five hydrogen projects with a near term focus on achieving commercial production at its initial hub at Miles, Queensland, as early as the second half of 2022.
Unconventional gas value
Adding further value is what Pitt Street describes as an “underappreciated gas business” consisting of a portfolio of unconventional gas resources in Australia and Botswana.
These have a combined best estimate contingent resource of about 460 petajoules.
At least part of this resource can be converted into proved and probable reserves in the near-term when and if commercial gas flows can be proved from the ongoing testing of Pure Hydrogen’s Project Venus pilot well.
With the gas market on Australia’s east coast expected to experience a supply gap by 2023, Pitt Street noted in its paid report that the gas resource would be a positive for Pure Hydrogen.
This gas resource could also be used as feedstock for the company’s hydrogen production, which would further de-risk the gas projects.
Pitt Street believes that these competitive advantages value Pure Hydrogen at about 60c per share on a base case and 83c per share on a bullish case using a sum-of-the-parts approach.
Importantly its hydrogen business alone would justify a share price of about 21c, just above the current price of 20c.