Company: Lion Energy Limited
ASX Code: LIO
Share Price: $0.075 (as at 21/11/21)
Morning Star Valuation: $0.12
Market Cap: $23m (as at 21/11/21)
Lion Energy Limited at a glance
• ASX listed oil and gas company with
conventional PSC’s in Indonesia.
• Focus on conventional oil and gas
production and development, appraisal
and step out exploration risk
• Exploring green hydrogen opportunities in
• Net production of around 37bopd from
the Seram PSC which also contains the
1.5TCF Lofin gas/condensate discovery.
• Leveraging synergies in conventional
assets and access to both infrastructure
• Executive team and strategic investors
with impressive track records for value
creation in Asia.
Lion Energy has conventional oil and gas exploration, development and production skills. It applies those skills to its Indonesian portfolio which is characterised by existing oil production, an exciting 1.5Tcf Lofin gas discovery and look-alike exploration opportunities both onshore and offshore Seram Island, in East Indonesia.
Lion is also applying these skills to exploring green hydrogen opportunities in Australia. Lion believes that managing resources, matching the right technology and producing and managing gas molecules close to market are skills that are in its upstream oil and gas DNA. Lion has assembled a team of experts, adopted a clear green hydrogen strategy and is actively executing that strategy.
29 October 2021 – Quarterly Report Highlights (1 July to 30 September 2021)
• Finalised the phase one GPA Engineering study into hydrogen production and refuelling and commenced a second phase.
• Developed a strong understanding of delivered green hydrogen costs in the Eastern States of Australia.
• Commenced evaluating the potential for building a network of modular hydrogen production and refueling stations in Australia.
• Progressed the Queensland University of Technology (QUT) study and it is expected to be completed in Q4.
• Commenced discussions with public transport authorities and fleet operators on the supply of green hydrogen.
• Obtained East Seram joint venture approval for shooting the largely partner-funded onshore 2D seismic program in the East Seram PSC in 2022.
• Approved the Seram (Non-Bula) 2022 work program and budget that includes a well test of the 1.5TCF Lofin gas discovery. Approval from Indonesian Government is expected in Q4.
• A crude oil lifting of 299,775 bbls was completed in July 2021, with proceeds net to Lion of USD486,392
17 November 2021 – Lion Energy receives firm commitments for $9.6m to increase focus on Green Hydrogen Strategy
Lion Energy Limited (“Lion” or “Company”; ASX: LIO) is pleased to announce that it received firm commitments for $9.6 million at 8 cents per ordinary share from sophisticated investors and directors.
Tom Soulsby, Lion’s Executive Chairman, said “we are pleased to work with the team at Peak again to support Lion’s potential foray in the green hydrogen business in Australia. Peak brings a wealth of experience in supporting companies with green hydrogen and renewable investment businesses in Australia. We will outline more details of our Australian hydrogen strategy to investors shortly.”
9 November 2021 – Lion Energy enters into MoU with BLK Auto
Lion Energy Limited (“Lion” or “Company”; ASX: LIO) is pleased to advise that it has signed a Memorandum of Understanding (MoU) with Queensland based BLK Auto Pty Ltd (“BLK Auto”) for a collaboration to assess
opportunities to grow Australia’s hydrogen transport and infrastructure capabilities.
BLK Auto is a specialist vehicle importer and distributor with more than six decades of experience and knowledge in specifying, engineering, complying, importing and selling commercial vehicles in Australia and New Zealand.
In October 2021, BLK Auto, in partnership with New York-based supplier of zero-emission, hydrogen fuel cell-powered commercial vehicles Hyzon Motors, unveiled Australia’s first hydrogen-powered coach, marking a milestone in the nation’s adoption of zero-emission vehicles.
Under the terms of the MoU, Lion and BLK Auto will collaborate on comarketing and joint commercialisation opportunities with a view to leveraging both companies’ capabilities to provide both hydrogen transport and hydrogen infrastructure opportunities for a wide range of Australian industries.
4 October 2021 – Update on Hydrogen Roadmap
• Set against a backdrop of Australian low emission goals and further government support for the hydrogen industry, Lion is positioning itself to be an early mover in green hydrogen production in Australia.
• Based on ongoing analysis of the hydrogen value chain potential, Lion is initially focusing its strategy on a decentralised, low capital intensive and shorter lead time part of the green hydrogen chain. That is, green hydrogen and refuelling infrastructure attached to the national energy market for the domestic heavy mobility market (buses and trucks).
• With the objective to deliver green hydrogen at the pump at a price close to diesel price parity outlined by our studies, Lion is evaluating the potential for building a network of modular hydrogen production and refuelling stations across Australia, with an initial focus on Queensland.
• In parallel to further technical work undertaken with GPA Engineering (“GPA”), Lion is currently undertaking preliminary discussions on the supply of green hydrogen to fleet operators and public agencies in Australia, with a focus on Queensland, intended to lead to the identification of the location for the first hydrogen production and
refuelling station by year-end.
• Lion is aiming to be at the forefront of producing and delivering hydrogen to meet the impending demand from bus fleet operators and will update investors on investment scope and scale in due course.
5 May 2021 – Embracing the Energy Market Disruptor: Green Hydrogen
Lion Energy is positioning itself in the production of green hydrogen at the critical juncture of resources, markets and technology.
The strategy overview is attached to this release and it highlights the following provisional roadmap:
- The establishment of a team of hydrogen experts, which will form a Hydrogen Advisory Board
- The appointment of experts to systemically analyse optimal electrolyser locations in Australia
- The securing of land rights, subject to available renewable energy supply and hydrogen or ammonia market potential
- The determination of best value and fit for purpose solar, wind and electrolyser technology
- The appointment of a feasibility study consultant with appropriate experience.
- Establish joint ventures with global players to build large scale solar/wind farms and relevant energy storage facilities to produce green hydrogen at lowest cost for domestic and export markets
- The potential co-investment in the downstream to enable H2 markets such as the distribution of H2 to Heavy vehicles
What is Green Hydrogen?
Hydrogen is the universe’s most abundant element, but here on Earth it doesn’t appear pure in nature, and requires energy to separate. The most common technique is to extract hydrogen from water, which is two parts hydrogen and one part oxygen (hence H20). You can use heat and chemical reactions to release hydrogen from organic materials such as fossil fuels, however this is enormously polluting.
There is a cleaner and more environmentally friendly way of getting hydrogen where a strong electrical current passed through a tank of water splits the molecule into its two constituent elements. This is called electrolysis. If the electricity is generated from renewable sources such as solar or wind, production of hydrogen in this way emits no greenhouse gases.
This is how we come to all the different shades of hydrogen:
- brown hydrogen is produced using coal where the emissions are released to the air
- grey hydrogen is produced from natural gas where the associated emissions are released to the air
- blue hydrogen is produced from natural gas, where the emissions are captured using carbon capture and storage
- green hydrogen is produced from electrolysis powered by renewable electricity.
Hydrogen can be used in broadly two ways. It can be burnt to produce heat or fed into a fuel cell to make electricity.
The potential applications for green hydrogen are;
- fuel-cell hydrogen electric cars and trucks
- container ships powered by liquid ammonia made from hydrogen
- “green steel” refineries burning hydrogen as a heat source rather than coal
- hydrogen-powered electricity turbines that can generate electricity at times of peak demand to help firm the electricity grid
- as a substitute for natural gas for cooking and heating in homes.
By 2050, according to investment management firm Goldman Sachs, green hydrogen could supply up to 25 per cent of the world’s energy needs and become a US$10 trillion ($13 trillion) market.
Lion Energy is one of the only listed companies in the world that aims to produce green hydrogen for heavy mobility, with their aim for production being late 2022/early 2023. Highly cashed with profitable oil and gas projects in place, things are looking opportunistic for this ASX Small Cap gem positioning itself to be an early mover in green hydrogen production in Australia.