President Energy Announces Northern European Green Hydrogen Co Acquisition

Source: www.gulfoilandgas.com 7/9/2021, Location: Europe

President Energy (PPC), the energy company with a diverse portfolio of production and exploration assets, announces a further significant new development with regards to Atome, the Company's hydrogen and ammonia production subsidiary.

Highlights

- Atome has acquired a 75% interest in a Northern European based green hydrogen and ammonia Company ("HCO") for nominal share value

- The acquisition reflects Atome's strategic desire of being a player in the European market for the supply of green hydrogen and ammonia

- Whilst HCO has no tangible assets at present, it has experienced local management with a reputable CEO in the country where the business is located

- Whilst yet to start production, HCO is currently in discussions with the respective National power company for power supply as well as a recognised world leader in original equipment manufacturing for the production of green hydrogen and ammonia

- HCO is optimistic that an appropriate power purchase agreement ("PPA") can be satisfactorily concluded to progress a necessary pilot programme for hydrogen production in the relevant country projected during, at, or around end of 2023 with, subject to that success, a targeted estimated second phase industrial production of 80,000 metric tonnes ("MT") of ammonia production per year around the middle of the decade

- With the Americas Project, announced on 1 July 2021, Atome has now two separate spheres of interest which, if they both progress to an industrial production stage, have the potential to generate over 250,000MT per year of green ammonia by the end of the decade

- Atome will be responsible for providing a line of credit of up to US$20 million to fund the pilot programme which is currently projected to cost US$12 million and, upon success Atome will lead the mobilisation of funding for the industrial production phase, all being subject to, inter alia, a satisfactory PPA and equipment supply agreement being in place

- This represents the second concrete step by Atome in pursuit of its stated business objectives and adds diversified geographical focus to its initial portfolio

Peter Levine, Chairman, commented

"The announcement today further reinforces the determination of President's subsidiary, Atome, to fulfil its strategic objective to geographically expand its green hydrogen and ammonia portfolio to the important European market ahead of the targeted listing of Atome's shares on the London Stock Exchange later in the year.

"Although at an early stage, discussions are underway in relation to both the purchasing of power and the sourcing of relevant hardware.

"This latest development underlines the present and potential future material shareholder value in Atome which we expect the projected forthcoming flotation to realise and unlock for President's own shareholders as well as providing those coming in on the listing with significant upside in a sector of increasing importance in the drive towards a carbon neutral future."

Share acquisition by Atome

Atome, a hydrogen and ammonia business in which President has an 85 per cent shareholding, has acquired, for a nominal consideration, a 75 per cent interest in a Northern European based green hydrogen and ammonia Company ("HCO").

The acquisition provides the opportunity for Atome to supply green hydrogen and ammonia to European markets as part of President's strategic interest to be present in the European market in addition to its Americas centric Project.

Whilst the identity of HCO and the country in which it is located must at this stage remain confidential for commercial reasons, the existing and local, experienced management with a reputable CEO who retain 25% of the company are in the process of detailed discussions with both the National provider of green renewable energy in the relevant country and one of the world's leading original equipment manufacturers.

Combined with the international expertise, financial support and footprint of President and its leading shareholders, the objective of HCO is to expeditiously become the relevant country's first and leading industrial scale hydrogen and ammonia producer utilising the green renewable energy produced there, followed by export and worldwide sale and distribution of the products.

Atome's entry into HCO provides that company with immediate in-depth experience in management, planning and execution of major projects, all of which is required by the prospective stakeholders in the project being inter alia the power and equipment suppliers.

The current business plan for HCO contemplates a two phased approach to production. The first phase being completion of a proof of concept pilot (demonstration) programme at an estimated cost of some US$12 million targeted to be achieved during 2023 and projected to produce 500 tons of ammonia per year and the second phase, an industrial roll-out using up to 75 MW with the objective to produce 230 tons of ammonia (NH3) per day (or 80,000 tons per year) by 2025.

Atome has, subject to a satisfactory PPA being in place, undertaken to provide a line of credit for up to US$20m to fund the first pilot phase of the project and a further line of credit of US$20 million towards the cost of the second phase subject to the pilot programme being successful with Atome leading and mobilising the financial package for that phase. It is estimated that the pilot programme would be completed at or around end 2023 with the second industrial production phase targeted for the middle of the decade.

Having had pre contract engagement with the existing management of HCO, President and Atome are optimistic that a fit for the purpose PPA can be concluded to facilitate the successful pursuit of the first phase pilot programme of HCO and establish grounds to extend arrangements to enable the second phase of industrial production to commence.

This is the second concrete agreement entered into by Atome and diversifies its region focus to provide a more balanced and stable portfolio. Accordingly, so far Atome has now under its auspices two projects which if they both progress to an industrial production stage have the potential to generate over 250,000MT of ammonia per year by the end of the decade.

Work now continues on both Projects as well as the listing of Atome's shares on the standard list of the London Stock Exchange targeted for later this year.


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