03. November 2021 | 12:34 CET
Royal Helium, dynaCERT, Gazprom - What is next?
The oil and gas sector has long been a popular investment area. However, when it comes to gas, hydrogen company share certificates have been more in the spotlight in recent months. A more exciting and also little-noticed field is the noble gas helium. We take a broad look at the investment stories in the gas sector.
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ISIN: ROYAL HELIUM LTD. | CA78029U2056 , DYNACERT INC. | CA26780A1084 , GAZPROM ADR SP./2 RL 5L 5 | US3682872078
"[...] 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
Royal Helium - New milestone
Helium is a sought-after noble gas essential for numerous applications due to its outstanding chemical and physical properties. As a non-conductive, non-reactive coolant in medical laboratory equipment or for use in space rockets. The gas is also in demand in the electronics and nuclear industries. Helium is often a byproduct of oil and gas production. Despite being the second most abundant element in our universe, helium is relatively rare on Earth due to its low density.
The Canadian province of Saskatchewan has recently emerged as a particularly productive region. In this infrastructurally well-developed and exploration-friendly region, the helium explorer Royal Helium operates on its land area of almost 400,000 hectares. Canada is number 5 globally in terms of helium reserves, and demand for the noble gas is steadily increasing due to the wide range of applications in numerous industries.
The Company has already been able to report considerable successes with drilling at the Climax/Nazare field. Last month, Royal Helium received the licenses and permits for a new project. The first helium well is currently being drilled in the Ogema block. It was preceded by years of geological and geophysical investigations. There are many indications that exciting and trend-setting news can be expected soon. The Company is currently valued at CAD 75 million.
dynaCERT - What is behind the big jump in the share price?
The shareholders of the Canadian hydrogen pioneer dynaCERT did not have much to laugh about in the last 12 months - the shares corrected from over CAD 0.80 to a level of CAD 0.20. Now the share price has jumped significantly. The Company's stock market value is currently at prices around CAD 0.40 above the CAD 100 million mark at around CAD 153 million.
Currently, the Canadians are presenting their solutions at the UN Climate Change Conference 2021, internationally known as COP26, in Glasgow, Scotland. This and the latest corporate news have now kissed the share price awake. dynaCERT was able to announce the implementation of its flagship technology HydraGEN and its telematics technology HydraLytica by Sofina Foods Inc. in Canada. Sofina is thus expanding its dynaCERT installations from 4 to 20 units.
The dynaCERT HydraGEN technology enables significant efficiency improvements of diesel engines by injecting hydrogen produced by portable hydrolyzers. The offering is flanked by the HydraLYTICA telematics solution. In the medium term, dynaCERT's CO2 certificate trading will bring money into the Canadian Company's coffers when the CO2 savings determined by the HydraLYTICA solution can be converted into tradable certificates. Fleet operators can realize significant savings in this way. The Canadians have proved that the technology works within the scope of several pilot projects and cooperations. If one believes the analysts of GBC, the share should continue to rise. The experts have issued a price target of CAD 1.87 for the shares.
Gazprom - Recent price correction offers chances
Everything is ready to go, and the first gas transport from Russia through the Baltic Sea to Germany via Nord Stream 2 could occur. However, the German Federal Network Agency is currently still checking whether all the requirements for operation have been met, e.g. sufficient separation between the functional areas of pipeline operation and sales. The EU Gas Directive also requires this. Before final certification, a review by the European Commission must still take place. However, this can take up to four months, in which case the original schedule to supply gas this year would be invalidated. The recent price decline makes the stock even more attractive, with a 2022 P/E of 3.5 and a dividend yield of around 13%.
All three stocks presented have clear upside potential. Russian gas giant Gazprom stands out with a very low fundamental valuation. The investment case of Royal Helium is exciting with a large property and rising industrial demand. The momentum of the dynaCERT share is coloring positive again, supported by positive corporate news. Analysts see multiplication potential in the share price.