In a strategic move to sharpen its focus on hydrogen energy projects, Pure Hydrogen Corporation has announced the sale of its 30% interest in the Serowe Coalbed Methane (CBM) project in Botswana. This divestiture is made to Botala Energy, the project’s operator, for a consideration of $750,000 in cash and 14.5 million shares in Botala Energy. As a result of this transaction, Pure Hydrogen’s stake in Botala Energy will increase from 16.5% to 23.2%.
Key Points Overview:
- Strategic acquisition of Pure Hydrogen’s 30% Interest in Serowe CBM Project: Botala has executed an unconditional share sale agreement, making Botala the sole owner of this high-potential project.
- Strategic MOU with Pure Hydrogen: MOU with Pure Hydrogen solidifies the collaborative efforts to investigate and develop hydrogen projects, leveraging the Serowe Project for hydrogen production and refuelling business expansions.
- Share Issuance and Milestone Payment: As consideration for the acquisition, Botala will issue 14.5 million shares to Pure Hydrogen across two tranches, along with a milestone payment contingent on agreed reserve certifications.
- Joint Venture and Hydrogen Highway Development: Botala’s joint efforts with Pure Hydrogen in the Botswana H2 venture aim to establish a hydrogen and renewables joint venture to manufacture, store, market and distribute hydrogen and renewable energy in Southern Africa, based in Botswana.
- Conditions Precedent and Key Considerations: All agreements and ventures (other than the share sale agreement, which is unconditional) are subject to regulatory approvals, shareholder consent and other conditions as outlined in the respective agreements. The MOU remains subject to proving the Serowe CBM Project can deliver gas at an agreed price.
The Serowe CBM project, located in a prime CBM region of Botswana, is known for hosting Project Pitse, the area’s inaugural commercial pilot project. Project Pitse boasts a significant 2C contingent resource and has demonstrated promising gas flow from its exploratory wells, indicating a bright future for gas production revenue.
This divestment aligns with Pure Hydrogen’s strategic pivot towards advancing its hydrogen initiatives, including the development of hydrogen production and refueling hubs, as well as the supply of hydrogen-powered commercial vehicles and generators. The company remains committed to leveraging the upside potential of the Serowe project through its increased equity interest in Botala Energy, while reducing its direct investment requirements in the project’s ongoing development.
Furthermore, Pure Hydrogen and Botala Energy will continue their collaboration on the Botswana H2 joint venture, aiming to generate 50MW of power from hydrogen, solar, and other green energy sources. This venture is expected to establish one of Africa’s largest hydrogen hubs, supported by the Botswana government’s commitment to clean energy projects.
Scott Brown, Managing Director of Pure Hydrogen, commented on the transaction: “This strategic realignment enhances our focus on hydrogen energy, allowing us to dedicate more resources to the development of innovative hydrogen technologies and infrastructure. Our increased shareholding in Botala Energy not only strengthens our position but also ensures our continued exposure to the Serowe Project’s success.”
Kris Martinick, CEO of Botala, said: “This acquisition comes at an ideal time as we continue to advance the pilot project with the aim to convert to a commercial development upon success. PH2 have been an amazing partner from providing support in our IPO through to technical support and reviews of the exploration and appraisal programs. However, we have now come to a rational separation point for PH2 allowing both companies to focus on their core strengths and objectives. Owning the project outright allows us to negotiate with potential partners for the next growth step in the project’s development.”
Scott Brown, CEO of Pure Hydrogen, said: “Converting our 30% interest in Serowe into an increased shareholding in Botala strengthens our equity interest in what is an excellent company and allows us to simplify our activities and focus our efforts and funding commitments to our hydrogen business including Hdrive. We have effectively minimized and limited our funding for this project but still maintained an upside exposure to the Serowe Project through our shareholding in Botala. We are excited by the rapid development of Botswana H2. We can very readily bring the best technologies to the Joint Venture in terms of hydrogen fuel production and all the associated transport infrastructure to develop the full value chain from fuel, refueling infrastructure, and commercial vehicles. Botswana is strategically located in Africa and it is a great market to commence our operations here, underpinned by a government committed to developing clean energy projects. We will update shareholders on the JV’s progress as key events materialize.”
Renewal of Strategic MoU with Pure Hydrogen:
Pursuant to the MOU with Pure Hydrogen, the parties have agreed to modify certain project milestones to enable the parties to further investigate and develop hydrogen projects in Southern Africa, leveraging the expertise and technology of both companies. The revised steps are as follows:
- Phase 1 – design, finance and build an electrolyser Micro Hub as a commercial demonstration of a standalone H2 manufacturing and filling station.
- Phase 2 – to design, finance and build the core of a hydrogen highway for the region.
- Supply Commencement – first production of commercial production of Hydrogen.
The MOU is aimed at establishing a hydrogen and renewables joint venture to manufacture, store, market and distribute hydrogen and renewable energy in Southern Africa, based in Botswana.
The renewal emphasises the continuation of the Botswana H2 joint venture, aimed at assessing and developing a potential hydrogen highway and infrastructure that includes hydrogen production via solar electrolysis and the establishment of micro hubs.
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