29. October 2021 | 10:23 CET
NEL, Plug Power, Royal Helium - Hydrogen rally, now it's rolling!
Only months ago, the comparatively expensive production of green hydrogen was put side by side with cheap Russian gas. Things can move that fast! The gas price has risen by 500% within 3 months, and the calculations are being recalculated. The explosive development of prices in the last 12 months shows how strongly shortages can affect the raw materials market. On average, known commodities increased by at least 25%, metals by 60-80% and energy doubled just like that. However, gas takes the cake with plus 600% in just 6 months, which gets the hydrogen industry buzzing. We take a closer look.
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ISIN: NEL ASA NK-_20 | NO0010081235 , PLUG POWER INC. DL-_01 | US72919P2020 , ROYAL HELIUM LTD. | CA78029U2056
"[...] We expect the first three wells to be drilled, cased, completed and tested by the second week of March [...]" Andrew Davidson, CEO, Royal Helium Limited
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Nel ASA - Astonishing comeback in a short time
Nel ASA, one of the major protagonists in hydrogen, can come back from its lows after its operating figures had repeatedly disappointed until mid-year. Last week, however, the share was literally flushed upwards by surprisingly good business figures for the third quarter and can now even register investor interest again.
The good mood is probably also due to an improving order situation. The North American subsidiary Nel Hydrogen US has received an order from a global fuel cell manufacturer. The order is for equipment with Nel's PEM electrolyzer. Nel did not disclose the name of the client, nor were the reasons disclosed. However, according to the Company, the deal amounts to about USD 2.6 million.
So, in the short term, excellent news for Nel. Looking at the chart of the Norwegians, the breakout above EUR 1.50 certainly gives hope, but the next resistance is already at EUR 1.85. If this line also falls, the way is free to the last high at around EUR 2.10. However, the falling 200-day line at around EUR 1.95 is still negative. We remain on the ball. The medium-term stop should be tightened to EUR 1.65.
Royal Helium - Start of drilling in Saskatchewan
In the field of technical gases, the Canadian Royal Helium Ltd. (RHC) is making a name for itself. The Company is focused on the exploration and development of a major helium production project in southern Saskatchewan. With over 400,000 hectares of prospective acreage held under permits and leases, RHC is one of the largest helium producers in North America. Canada has the fifth-largest helium reserves globally and is increasingly in the spotlight of international technology producers.
In October, it has now received licenses and permits for its first helium well in the Ogema Block, scheduled to begin on November 1. Panther Drilling's rig is currently making its way to Ogema-1, located about 80 kilometers west of Weyburn in southeast Saskatchewan. Once drilling is completed on Ogema-1, the rig will be moved to Ogema-2, which is currently being licensed and permitted. Ogema is the first helium-specific drilling program ever undertaken in southeast Saskatchewan. It has some of the highest historical helium gas occurrences ever tested in the province.
The Climax/Nazare completion plan is well underway, with two additional production wells currently being licensed and permitted. For Royal Helium, the first well drilled on the Ogema project is the culmination of years of geological and geophysical investigation. Due to the size of the project, RHC is now moving beyond conventional development and is planning a program of multiple vertical and horizontal wells. Progress sounds good throughout, and the project is right on schedule. We look forward to seeing the results.
RHC shares have bounced back in recent weeks and are now hovering between CAD 0.54-0.60. With a market cap of just under CAD 82 million, the stock could soon come into the focus of larger institutional investors.
Plug Power - The green hydrogen starts to run
If you search in the extended peer group of technical gases, you will quickly come across the US hydrogen expert Plug Power. After the hype at the beginning of 2021, when Plug Power announced the cooperation with the Korean SK Group, the stock fell by a full 70%. The comeback seems to have begun because the value rose in October alone by a full 50% to currently EUR 30.
Progress is now being reported from Korea: The cooperation with SK Group is based on the formation of a strategic partnership to accelerate the expansion of the hydrogen economy throughout Asia. On October 6, Plug Power and SK E&S executives gathered for a signing ceremony. Here, Choo Hyeongwook, President and Chief Executive Officer of SK E&S, said, "The formation of the joint venture is of great significance as it lays the foundation for Plug Power to enter the Asian market with its core hydrogen technologies. It provides SK E&S with a unique opportunity to work with Plug Power to build a powerful hydrogen ecosystem, including the production of green hydrogen using electrolyzer technology." The expansion into Asia has thus been successfully completed.
Currently, however, the Company can also look forward to a good order situation in the West. It recently entered into another partnership with France's Lhyfe to develop green hydrogen production facilities throughout Europe. The initiative reportedly aims to build a total capacity of 300 megawatts.
Plug Power continues to make progress in terms of collaborations and business expansion. That is bringing the share back into the spotlight, as evidenced by its recent performance. If the share price also clears the hurdle of EUR 30, it should continue to climb briskly. The stop should be strategically raised to EUR 28.50 to avoid succumbing to another bull trap.
High prices for fossil energy play into the cards of H2 producers, and the production of green hydrogen is getting off the ground. Industrial gases have been essential in technological processes for decades, especially true of scarce helium. Canada's Royal Helium is moving forward step by step to deliver in a few years.