PERTH (miningweekly.com) – ASX-listed Metgasco on Tuesday unveiled a staged acquisition of renewable hydrogen and energy developer Patriot Hydrogen.
Metgasco told shareholders that the acquisition formed part of the company’s diversification strategy, delivering a sustainable, commercially attractive and carbon net zero opportunity while potentially offsetting emissions associated with the company’s core natural gas production assets.
“This deal marks an important step for Metgasco as it commences its journey to becoming a leading low-emissions, multi-fuel producer. With completion of the recent Cooper Basin sub-surface program and gas production at Vali due to start in the fourth quarter of this year, the acquisition of Patriot should enable us to offset these emissions while also delivering a compelling standalone commercial opportunity,” said Metgasco MD Ken Aitken.
Patriot has a framework agreement, including Australian market exclusivity undertakings, with a regional technology partner to develop hydrogen production projects in Australia, with proven market demand.
The company’s first commercial plant commissioning, for Kimberley Clean Energy, (KCE), is expected in the fourth quarter of 2022, part of a comprehensive memorandum of understanding to deliver up to 75 units to KCE in support of remote power needs in Northern Australia.
Stage 1 of Metgasco’s acquisition is linked to the delivery of equipment to KCE, with Metgasco to provide Patriot with certain logistical and financial support to provide for plant shipment and delivery.
Stage 2 of Metgasco’s investment in Patriot would be subject to the delivery of milestones, with Metgasco to undertake a A$750 000 equity investment into Patriot as the first stage of an option to acquire 100% of the company, on the same valuation as the final acquisition.
This funding is expected to take Patriot’s KCE project to first commercial gas and revenue.
Stage 3 would entail an all-scrip acquisition of 100% of Patriot at agreed valuation.
Subject to remaining conditions precedent, which include project and commercial outcomes, Metgasco has the right to purchase 100% of Patriot via an all-scrip acquisition at a valuation of A$5.9-million, subject to a number of conditions, including meeting all project deadlines over a six-month period, Patriot confirming to Metgasco’s satisfaction execution of relevant purchase power agreement and feedstock contracts for a second energy project, and subject to Metgasco obtaining shareholder approval at the 2022 annual general meeting for the issuance of shares to the value of the transaction.