Metgasco has announced the purchase of sustainable hydrogen and energy producer Patriot Hydrogen in stages.
Metgasco informed its shareholders that the acquisition was part of the company’s diversification strategy, offering a sustainable, economically viable, carbon-neutral opportunity while possibly offsetting emissions from the company’s main natural gas production assets.
“This transaction represents a significant milestone for Metgasco as it embarks on its road to become a major low-emissions, multi-fuel producer. With the recent completion of the Cooper Basin sub-surface program and gas production at Vali slated to begin in the fourth quarter of this year, the acquisition of Patriot should allow Metgasco to offset these emissions while also providing a compelling commercial opportunity, according to Metgasco’s managing director Ken Aitken.
Patriot has a framework agreement with a regional technology partner, which includes market exclusivity commitments for the Australian market, to construct hydrogen production projects in Australia with proven market demand.
The business expects to launch its first commercial plant for Kimberley Clean Energy (KCE) in the fourth quarter of 2022, as part of a comprehensive memorandum of understanding to provide up to 75 units to KCE to address distant power demands in Northern Australia.
Stage 1 of Metgasco’s purchase is contingent on the delivery of equipment to KCE, with Metgasco providing Patriot with logistical and financial support for the transport and delivery of the plant.
Metgasco would make a $750,000 equity investment in Patriot as the first stage of an option to purchase 100% of the firm at the same valuation as the ultimate acquisition, contingent on the achievement of milestones.
This money is anticipated to bring the KCE project of Patriot to first commercial gas and income.
Stage 3 would involve an all-stock acquisition of Patriot for an agreed-upon price.
Metgasco has the right to acquire 100% of Patriot via an all-scrip acquisition at a valuation of A$5.9 million, subject to a number of conditions, such as 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 obligor approval.
