Renergen Limited (JSE:REN) News - Central Energy Fund to Invest R1bn in Virginia Gas Project

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”)

CENTRAL ENERGY FUND TO INVEST R1BN IN VIRGINIA GAS PROJECT

   •   Non-binding term sheet signed with State-owned Central Energy Fund to sell 10% of
       subsidiary company Tetra4, 100% owner of Virginia Gas Project for R1bn (A$91.3mn)
   •   Transaction is subject to completion of conditions precedent listed below
   •   The parties have 141 days to execute binding agreements and following completion
       Renergen has the right to renegotiate price
   •   Proceeds from the Central Energy Fund subscription will be used to progress
       development of Phase II of the Virginia Gas Project by Renergen
   •   Investment by CEF will provide exposure to economic participation in South Africa’s
       first and only onshore petroleum production right
   •   Agreement between parties, follows strategic partnership announced between
       Renergen and Ivanhoe Mines, as the Company approaches commencement of Phase
       1 operations

Renergen is pleased to announce that following negotiations with the Central Energy Fund, a
term sheet has been agreed between the parties, which if binding agreements are executed
within the stipulated time-period, will see the Central Energy Fund invest R1bn into Tetra4
Proprietary Limited. The major investment will see Central Energy Fund take a 10% stake in
Tetra4.

If binding contracts have not been executed after 141 days, the purchase price shall be
renegotiated in good faith.

Central Energy Fund is a State-owned diversified energy company with an investment
mandate focused on contributing to the energy security of South Africa. The agreement
between Renergen and Central Energy Fund, follows the strategic partnership announced last
week between Renergen and the Robert Friedland-led Ivanhoe Mines and comes at an
exciting time for the Company, with Phase 1 operations at Virginia Gas Project (“Virginia”)
due to commence in April.

“Renergen and the CEF’s relationship goes back many years. Importantly, during this time
Renergen has successfully grown Virginia in a size and scale, highlighted by the growth both
of our helium and methane reserves, which have finally reached the critical mass to enjoy
CEF’s involvement. Today’s investment commitment is a result of long-term discussions
between CEF and Renergen and during this time the CEF team have been amazing to deal
with and I am very pleased to be able welcome them as a major investor in our future.

“I along with the Renergen Board and management team look forward to building on the strong
strategic partnership with CEF as we embark on Phase 1 operations in April and establishing
Virginia as a significant domestic and global gas producer.
“The future is extremely bright for Renergen and shareholders should be very excited by what
we are building. To sign CEF and Ivanhoe Mines in the space of two weeks as major investors
and strategic partners, highlights the significant growth of the Company and the critical role
Virginia will play in the future supply of clean energy as well as in-demand helium.” said
Stefano Marani, CEO of Renergen.

“Our participation in the Renergen project is in line with the newly adopted strategy of being a
“strategic investor” in the energy value chain that is geared to support the region’s energy
needs, leading the energy security and just transition programme for South Africa,” said CEF
CEO Dr Ishmael Poolo.

1.   TRANSACTION

     The Company’s, wholly-owned subsidiary Tetra4 Proprietary Limited (“Tetra4”), entered
     into a term sheet (“Term Sheet”) with Central Energy Fund SOC Ltd (“CEF” or the
     “Purchaser”), in terms of which CEF will make a strategic investment into Tetra4 by way
     of a fresh issue of shares by Tetra4 to CEF, resulting in CEF becoming a 10% shareholder
     in Tetra4 for a total subscription consideration of R1 billion, or A$91.3 million equivalent
     (“Subscription Consideration”) (“Subscription”).

2.   RATIONALE FOR THE SUBSCRIPTION

     The proceeds from the Subscription will be used to progress the development of Phase II
     of the Virginia Gas Project by Renergen. The transaction will introduce State participation
     into the Virginia Gas Project, which will strengthen Renergen’s strategic position locally
     as a domestic energy producer and broaden the positive relationship Renergen enjoys
     with the South African government at all levels.

     The transaction will also give the CEF economic participation in South Africa’s first and
     only onshore petroleum production right, signalling the state’s entry into the country’s
     maiden commercial liquefied natural gas (“LNG”) production.

3.   CONDITIONS PRECEDENT

     The Subscription is subject to the fulfilment of the following conditions precedent
     (“Conditions Precedent”):

     - Successful completion of a technical, commercial, financial, legal and tax due diligence;
     - internal CEF approval;
     - Department of Minerals and Energy ministerial approval;
     - National Treasury approval; and
     - signing of binding legal agreements.

     The Conditions Precedent must be fulfilled by not later than 141 days from the signature
     of the Term sheet, which date may be extended by the parties in writing.

Johannesburg
28 March 2022

Authorised by: Stefano Marani
Chief Executive Officer

Transaction Advisor: Gneiss Energy

Designated Advisor and corporate advisor
PSG Capital

For Australian Investors & Media, contact Citadel-MAGNUS
Cameron Gilenko, 0466 984 953
www.renergen.co.za

Date: 28-03-2022 08:00:00
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