The share price of Real Energy Corporation Ltd [ASX:RLE] are up 14.81% at time of writing.
A notable surge for this tiny gas explorer.
However, it isn’t gas that has sparked this uptick. Instead, the microcap is rising on news that it is planning to enter the hydrogen market.
A clean energy pivot
Dubbed ‘Pure Hydrogen’, this subsidiary of Real Energy was unveiled back in May.
Today the company detailed its bold plans for this arm of the business, showcasing how this hydrogen agenda will come into the fold.
This includes possible plants to scale the business into not only the domestic market, but also larger scale exports. As well as potential research for technological value-added production.
Right now though, transport — including trucking — is a big focus for the company.
Looking to provide a cleaner source of energy for vehicles. As well as the possibility of fuelling station infrastructure to make it accessible.
Furthermore, this announcement has come in the wake of a proposed merger of Real Energy with Strata-X Energy CDI [ASX:SXA]. With the pair soon set to become simply ‘Pure Energy’, which will no doubt place this Hydrogen business at the fore of their new operations.
Granted, that doesn’t mean that gas won’t still be their primary focus. It’s just that management clearly recognises the potential of this emerging hydrogen market. An avenue that they will be looking to capitalise upon.
As the company explained in their Scheme Booklet last month:
‘Real Energy’s Board has been assessing the opportunities for hydrogen following the publishing of the Federal Government’s road map for Australia’s National Hydrogen Strategy in November 2019.
‘Real Energy’s Pure Hydrogen Corporation has already made progress earmarking two potential sites in Queensland at which to establish a large-scale hydrogen fuel plant with a minimum annual production capacity of 36 million kilograms. A plant of this size has the ability to power 240,000 Hyundai Nexo’s for a year.’
So, with today’s update and presentation, it could be a hint that Real Energy is closer to finalising their operations.
At the very least, the market is certainly excited to see where this direction will lead.
What’s next for the Real Energy share price?
The main focus for Real Energy will now turn to finalising their merger. Officially wrapping up all the loose ends and starting afresh as Pure Energy.
Once that is all sorted (currently scheduled for 30 December), then the real work can begin. With the company likely to have more news to share on this hydrogen venture in the future.
For shareholders, that is something to keep an eye out for. Because if today’s market reaction is anything to go by, more gains may be on offer as further updates come forth.
If however you can’t wait that long, well we’ve got you covered.
Our latest ‘Renewables Revolution’ report details everything you need to know. Including our top tips on how to invest in this trend right now.
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For Money Morning