Q1 Update and Corporate Strategy
27 April 2023
Oracle Power PLC
("Oracle" or the "Company")
Q1 Update and Corporate Strategy
Oracle Power PLC (AIM: ORCP), a developer of green energy projects, is pleased to provide the following update on activities during Q1 2023 and implementation of its realigned corporate strategy, which focuses on the development of renewable energy generation projects.
The Company made significant progress during the first quarter of 2023, developing a series of strategic industry partnerships as it advances the development of its flagship asset, the 400MW Green Hydrogen Project (the "Project" or "GHP") in Sindh, Pakistan, through its subsidiary Oracle Energy. It is targeting a total annual output of 55,000 tonnes of high purity green hydrogen to mainly export for use in industries, utilities and transportation sectors.
Highlights
· Signed a Memorandum of Understanding ("MoU") in February 2023 with Emirates Global Aluminium to jointly explore the supply of c.50,000 tonnes of green hydrogen. If successful, the offtake agreement would secure the majority of the GHP's output with an industry leader, significantly mitigating financing risk.
· Successfully raised gross proceeds of £500,000 in February 2023 via an oversubscribed placing of 294,117,647 new ordinary shares priced at 0.17p, to support ongoing development of GHP in a timely manner and with a view to begin construction in FY'24.
· Signed MoU with subsidiary of State Grid of China, China Electric Power and Technology Co., Ltd ("CET") in March 2023 to develop, finance, construct, operate and maintain the GHP; including the construction of a Hybrid Renewable Energy Production, Chemical Processing, and Storage facilities.
· Signed MoU in March 2023 with Doosan Fuel Cell Co., Ltd ("Doosan Fuel Cell"), the industry leading Korean fuel cell and hydrogen company, and HyAxiom Inc. ("HyAxiom"), a leading global fuel cell and hydrogen solution provider, to jointly explore fuel cell opportunities for industrial power generation in Pakistan.
· Land lease for GHP site formally awarded by the Government of Sindh's land registry and registered in March, completing the acquisition of the land package of 7,000 acres (announced in November 2022).
· Joined Dii Desert Energy as an Associate Partner in February 2023, an exclusive and highly influential independent network, whose mission is to harness emission-free energy from the Middle East and North African ("MENA") region and beyond.
The Company is mainly targeting markets in Asia including China, Japan, Korea, and Europe for export of the green hydrogen molecule in the form of liquid green ammonia or liquid hydrogen. Furthermore, the Company has also formed relationships to deploy green power solutions using hydrogen fuel engines, for large-scale industry and transport.
Oracle expects to progress these strategic relationships with industry leading partners in the coming months and looks forward to updating the market accordingly.
Thyssenkrupp Uhde ("Thyssenkrupp") is also progressing well with the commercial and technical feasibility work on the production of green hydrogen and green ammonia at the GHP with preliminary results due out in Q2 2023.
This study will help guide the Project's ongoing development and will provide a basis for understanding the key production metrics and expectations.
Following the signing of its MoU with the Company, CET has positioned its teams to commence its studies on power and transmission, which are expected to begin in Q2 2023. The results from these studies will serve to feed into Thyssenkrupp's modelling for the feasibility studies.
Corporate Strategy
Since COP26 in October 2021, there has been a significant focus from most governments, international business and global capital markets to accelerate the transition away from fossil fuel power generation in order to meet the ambitious 2050 Net Zero targets. With this pressure, the focus on renewable energy, as well as hydrogen as a solution, has highlighted the importance of Oracle's stated strategy of pivoting towards green energy power generation and away from hydrocarbon industries.
Successfully delivering GHP would propel Oracle to first mover status in the nascent green hydrogen sector in Pakistan with the 55,000tpa project the country's first and one of the largest such projects in the region. It is expected to deploy 700MW solar and 500MW wind power along with a battery station, to produce green hydrogen.
In addition, the global hydrogen production market is growing rapidly and was valued at US$130 billion in 2022 by the World Bank and anticipated to grow by over 9% per annum until 2030, which points to strong global demand for GHP's planned output. The Project is Oracle's first renewable energy project through its 30% shareholding in Oracle Energy - its JV with His Highness Sheikh Ahmed Dalmook Al Maktoum (via Kaheel Energy FZE, who owns the remaining 70%), a regional developer of green energy projects.
Oracle aims to leverage its significant shareholder's expertise, relationships and reputation as a strategic investor in energy across the MENA region, which will also be a potential focus of Oracle's operations. This will help achieve the Company's primary strategic goal of becoming a leading developer of renewable energy projects; as the originator of Pakistan's first commercial green hydrogen production facility.
The development of relationships with some of the largest utility providers in the world, including the co-operation agreement, announced post period end in April, with PowerChina to build a significant solar power generation plant on Oracle's Thar Block VI in Pakistan, underpins the ongoing transformation of the Company. These partnerships provide a key platform in making our vision into a reality. We will continue to refine our strategy in what is a rapidly changing environment, seek to monetise and divest of assets which are non-core, and focus on the comparative advantage of our expertise, relationships and quality assets in order to maximise returns to our stakeholders and partners.
Naheed Memon, CEO of Oracle, commented:
"Our first quarter of 2023 has witnessed several exciting developments through creating a strong network of industry partnerships with potential off-takers, project financiers and developers plus hydrogen fuel cell innovators, which further establishes our position in the global green hydrogen ecosystem, as a significant potential supplier of this renewable energy fuel.
The rapid developments in the global green hydrogen space are nothing short of amazing and we are witnessing a huge leap in the appetite for large-scale renewable energy in industry, transport and aviation at a time when 'traditional' energy costs are spiralling and becoming increasingly problematic due to climate change implications. Alternative sources of clean, green energy are badly needed globally."
Naheed Memon, CEO of Oracle, will be conducting a shareholder presentation and Q&A session via the Investor Meet Company platform on Thursday April 27th at 11am GMT.
The presentation is open to all existing and potential shareholders. Questions can be submitted pre-event via your Investor Meet Company dashboard up until 9.00 a.m. the day before the meeting or at any time during the live presentation. There is no guarantee that all questions will be discussed on the call given time limitations and/or specific sensitivities with respect to operations.
Investors can sign up to Investor Meet Company for free and add to meet Oracle Power PLC via:
https://www.investormeetcompany.com/oracle-power-plc/register-investor
Investors who already follow Oracle Power PLC on the Investor Meet Company platform will automatically be invited.
For further information:
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Oracle Power PLC Naheed Memon (Chief Executive Officer)
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+44 (0) 203 580 4314 |
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Strand Hanson Limited (Nominated Adviser & Broker) Rory Murphy, Matthew Chandler, Rob Patrick
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+44 (0) 20 7409 3494
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Buchanan Oonagh Reidy/ Abigail Gilchrist |
+44 (0) 20 7466 500 |
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