Pure Hydrogen Corporation Limited (ASX: PH2) Announces Spinout of Gas Assets
Overview of the Spinout
Pure Hydrogen Corporation Limited (ASX: PH2) has announced its plans to demerge its portfolio of Australian natural gas assets into a newly listed entity called Eastern Gas Limited. This strategic decision aims to create enhanced value for its shareholders while allowing both entities to focus on their core operations.
Shareholder Benefits
All existing Pure Hydrogen shareholders are entitled to an in-specie distribution of shares in Eastern Gas. For every five shares held in Pure Hydrogen, shareholders will receive one share in the new entity. The IPO for Eastern Gas is expected to raise between $8 million and $10 million.
Operational Strengths
Eastern Gas holds a 100% operated interest in significant Australian east coast natural gas assets, including the ATP 927 Windorah and ATP 2051 Venus projects, which have independently certified contingent gas resources of 453 BCF. The company plans to undertake a well-defined drilling and testing programme to optimise the development of these resources.
Market Context
Pure Hydrogen is positioned strategically within a favourable market context. The current East Coast gas market is experiencing sustained pricing, with expectations of favourable conditions continuing. The ACCC has underscored the critical role of natural gas in providing energy security and facilitating an orderly transition to a lower emissions economy.
Next Steps for Shareholders
Shareholders do not need to take any action to receive their new shares in Eastern Gas, as the shares will be automatically allocated based on their current holdings in Pure Hydrogen. Furthermore, shareholders will retain their Pure Hydrogen shares following the spinout.
Motley Fool contributor Abbie Stokes has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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