HyTerra receives $21.9m cornerstone investment from Fortescue Future Industries Technologies
HyTerra (ASX: HYT) is to receive a $21.9 million cornerstone investment from Fortescue Future Industries Technologies (FFIT) to pursue white hydrogen at its 100%-owned Nemaha project in Kansas.
Upon completion of the transaction, FFIT will become HyTerra’s largest shareholder.
HyTerra and Fortescue have also agreed to a strategic alliance agreement that will allow for collaboration on the Nemaha project and exploration of new global opportunities.
Largest shareholder
The investment will see FFIT subscribe to 644 million shares in HyTerra at $0.034 each for a total 39.8% interest, plus 322 million free-attaching options exercisable at $0.051, subject to shareholder approval.
Proceeds will be used to fully fund expanded exploration at prospects in several identified geological play areas and to expand HyTerra’s upcoming two-well drilling campaign to six wells.
The expanded program is expected to enhance HyTerra’s ability to unlock commercial opportunities in the US midwest region.
Global decarbonisation
HyTerra executive director Benjamin Mee said the investment would enable it to accelerate global decarbonisation efforts.
“It will enable us to have a strong financial position going forward and the possibility of propelling the global decarbonisation journey with such a visionary company is truly exciting,” he said.
“An investment by Fortescue is a testimony to the hard work and delivery performance of the HyTerra team, the diverse geological plays available within our Nemaha project leases and our global growth opportunities in the pipeline.”
White hydrogen
White hydrogen is a naturally occurring resource extracted from underground by conventional oil and gas techniques, with potentially much lower production costs and carbon emissions than man-made hydrogen.
HyTerra is exploring for white hydrogen within its wholly-owned and -operated Nemaha project.
Nemaha, which spans 128.8 square kilometres between Kansas City and Wichita, is located in the centre of a major industrial and manufacturing hub.
The project has a P50 net hydrogen prospective resource of 105.5 billion cubic feet and a P50 net helium prospective resource of 0.59Bcf.
It contains leases with historic wells comprising more than 10 hydrogen and helium occurrences grading up to 92% hydrogen and 3% helium.