RENERGEN LIMITED - Updated Reserve and Evaluation Report

Updated Reserve and Evaluation Report

RENERGEN LIMITED
Incorporated in the Republic of South Africa
(Registration number: 2014/195093/06)
Share code: REN ISIN: ZAE000202610
(“Renergen” or “the Company”)

UPDATED RESERVE AND EVALUATION REPORT

Shareholders are referred to the Reserve Review Results released
on SENS on 5 October 2016 (“Reserve Review”) which was prepared by
Venmyn Deloitte, and are hereby advised of the results of the
latest independent reserve review compiled by MHA Petroleum
Consultants LLC from the United States of America in respect of
the Virginia Project held by the Company’s subsidiary Tetra4
Proprietary Limited (“Tetra4”), dated 7 March 2018 (“MHA Update”).

Tetra4, the first and only South African company which holds an
onshore petroleum production license, is now included as part of a
small group of companies capable of producing helium, and has the
capacity to help South Africa become a net exporter of helium.
Helium is important in the use of space exploration and high-level
science and plays an important role in use of MRI’s and the
manufacturing of semiconductors.

Of primary importance in the MHA Update is the upgrading and
relative significance of the helium reserves as a component of the
overall gas reserve, which amount to 6.21 billion cubic feet on a
discovered commercial basis, or 3P. The contingent resources, or
3C amount to 24.6 billion cubic feet. The following table outlines
Tetra4’s methane and helium reserves as per the MHA Update:


             Total    Probable     Proved   Possible    Proved,
            Proved                    and              Probable
                                 Probable                   and
                                                       Possible
              (1P)                  (2P)                   (3P)

 Methane     36.36      91.03     127.34     141.66      269.05
   (BCF)

  Helium      0.87       2.12       2.99       3.22        6.21
   (BCF)

ECONOMIC ASSESSMENT
The MHA Update includes a revised reserve evaluation which has
resulted in an updated economic assessment of Tetra4’s assets as
set out below in ZAR million:


Discount Proved    Probable    Proved  Possible Proved,
  rate                          and             Probable
                              Probable            and
                                                Possible
           (1P)                 (2P)             (3P)

   0%     11,251   62,055     62,117   112,413   167,413


   5%     5,226    24,067     25,516    37,812   59,873


   8%     3,576    16,012     17,037    24,024   38,514


   10%    2,849    12,812     13,358    18,815   30,124


   15%    1,726     8,258      8,407    11,675   18,290


   20%    1,112     5,935      5,731    8,156    12,339


   30%     494      3,648      3,097    4,778      6,631

The Reserve Review had previously estimated the valuation of
Tetra4’s Virginia Project at R6.6bn using 10% discount rate on P1
and 20% discount rate on P2. Based on the MHA Update, and using a
blended 15% discount for 2P above shows a new valuation of R8.4bn,
or an increase of 27%. This increase is made up of numerous
contributors, including increased helium reserves, a more
favourable oil price and a more formal evaluation of the helium
reserves.

The above reserve estimates were signed off on 1 March 2018 by a
qualified reserves evaluator, Mr Jeffrey B. Aldrich, and is based
on assumptions including USD/ZAR of 12 and a gas sales price of
ZAR 227/GJ. Mr Aldrich has approved the information contained in
this announcement in writing prior to the release thereof. The
reserve estimates have been compiled in accordance with the South
African Code for the Reporting of Oil and Gas Resources (SAMOG).

“We are very pleased with the positive results from the
independent reserve review compiled by MHA Petroleum Consultants
LLC. When compared to the United States Bureau of Land
Management’s Helium Reserve of 5 billion cubic feet, our helium
reserves of approximately 6.2 billion cubic feet certainly
differentiates us as a force to be reckoned with in a global
context,” said Stefano Marani(CEO).

Email investor queries to investorrelations@renergen.co.za

Johannesburg
8 March 2018

Designated Adviser
PSG Capital

Independent Techno Economic Advisor
MHA Petroleum Consultants LLC

Date: 08/03/2018 11:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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