Natural hydrogen company chaired by Alexander Downer, Gold Hydrogen, debuts on ASX

Chaired by former leader of the Australian Liberal Party and former Minister for Foreign Affairs Alexander Downer, Gold Hydrogen is exploring 75,332 square kilometres of land in order to develop natural hydrogen gas projects.

The company debuted on the boards today at 11.00am AEDT following a $20 million Initial Public Offering (IPO) whereby GHY issued 40 million fully paid ordinary shares at a price of 50 cents each, giving it an indicative value of $70 million.

Immediately prior to the IPO 100 million shares were issued, and there are a further 4 million unlisted options on issue which are all held by board and management - 900,000 of which are attributed to Downer - and escrowed for a period of 24 months.

South Australian-born Downer, who was the sitting member for the Federal seat of Mayo in his state from 1984 to 2008, said Gold Hydrogen’s natural hydrogen ambitions would be a boon for the nation.

“To know we have the support of so many people in the hunt for low carbon energy sources, and that the search starts in my own state, is incredibly humbling,” Downer said.

“This is an Australian first, and very exciting for South Australia and Australia.

“We need real solutions to decarbonise in ways that keep the lights on, and innovators like Gold Hydrogen will be essential to those goals.”

Natural hydrogen, also known as ‘gold’ or ‘white’ hydrogen, is one of the many types of hydrogen classifications as part of the ‘hydrogen rainbow’ spectrum which breaks down types into the greenhouse gas emission profile of the energy source.

Of all the types of hydrogen, natural hydrogen is reportedly among the cleanest and is rare in its natural form, compared to brown or black hydrogen which is made from coal gasification, yellow hydrogen which is the result of direct water splitting, and purple/pink hydrogen which comes from nuclear power. Green hydrogen is currently established as the most environmentally friendly in the market, derived from renewable energy sources such as solar and wind.

Fellow Australian companies have also been exploring the potential of other types of hydrogen energy, including LINE Hydrogen which is looking to build an $83 million green hydrogen production facility in Tasmania. 

Since February 2021, the South Australian Government has permitted companies to apply to explore for natural hydrogen, and the transmission of hydrogen or compounds of it is permissible under the transmission pipeline licensing provisions of the South Australian Petroleum and Geothermal Energy Regulations.

According to Gold Hydrogen, the company has only recently identified the potential of the South Australian regions for the state's ‘extensive’ natural hydrogen presence. The company hopes global demand, combined with new natural hydrogen exploration techniques, will grant it an opportunity to ‘define and ultimately develop a new natural hydrogen gas province’.

GHY holds one granted petroleum exploration licence, and its two 100 per cent owned subsidiaries White Hydrogen Australia and Byrock Resources hold an additional seven applications for natural hydrogen exploration within South Australia.

The company’s main project is called the ‘Ramsay Project’, and covers 7,820 square kilometres on the Yorke Peninsula and Kangaroo Island. Following the exploration project, it is the company’s intention to drill production wells and install surface facilities for delivery to market, and produce natural hydrogen for sale to consumers.

Gold Hydrogen is also the preferred applicant for four gas storage exploration licenses applications covering an additional 8,107 square kilometres within a renewable energy zone of the Yorke Peninsula.

More than half of the company’s shares (55 per cent) are held by the Michell Simonds Family and  NFM Enterprises (27.5 per cent each), with HSBC Australia the third largest shareholder with 6.14 per cent of total issued capital.

According to the company’s prospectus, early investors are joining the company on its mission to build a natural hydrogen industry in South Australia which is still in nascent stages.

“The demand for a hydrogen market is largely underpinned by the push from governments and investors to decarbonise industries and economies. Tougher regulations and national emission reduction targets are prompting the exploration of alternatives to fossil fuels for power or heat, supporting a more favourable policy for the hydrogen industry,” GHY said in its Prospectus.

“Demand for hydrogen grew 50 per cent between 2000 and 2020, and in the net zero emissions by 2050 scenario, is forecast to grow from 90 megatonnes (Mt) in 2020 to over 200 Mt by 2030 and close to 530 Mt by 2050. Global annual investment in hydrogen and its derivatives is projected to grow to $629 billion by 2050.

“Natural Hydrogen, in particular, as a low/zero carbon emitting source that can be supplied at a very low price point, presents a very attractive opportunity to facilitate decarbonisation.”

Beyond the company’s main priorities, Gold Hydrogen says it is planning on conducting further non-invasive natural hydrogen gas soil surveys with the CSIRO in March/April of this year.

“Up to 100 soil survey locations have been identified to explore areas associated with potential natural hydrogen surface seeps sometimes referred to as fairy circles,” Gold Hydrogen said.

“The company is planning to twin where possible historic wells that have reported natural hydrogen occurrences. Exploration drilling is scheduled to commence in Q3 2023 with three exploration wells currently being planned.”

In the short time since its debut, shares in GHY are up 4 per cent to $0.52 per share - two cents higher than the company’s listing price.