Strike Energy has signed an MOU with Infinite Blue and ATCO to secure additional hydrogen for Project Haber urea. Macquarie observes the company is pursuing a net zero plan that will enhance its ESG profile and reduce dependence on imported urea.
Strike Energy requires 141,000tpa of hydrogen to run its urea plant in the Perth Basin and initially this will largely be sourced from Greater Erregulla natural gas feedstock.
Over time, as green hydrogen becomes available at lower prices from operators nearby, the company should be able to increase its green hydrogen ratio to 70% and Project Haber would become one of the largest industrial consumers of green hydrogen in Australia.
Macquarie retains an Outperform rating and $0.60 target.
Sector: Energy.
Target price is $0.60.Current Price is $0.30. Difference: $0.30 – (brackets indicate current price is over target). If STX meets the Macquarie target it will return approximately 50% (excluding dividends, fees and charges – negative figures indicate an expected loss).
