Leigh Creek Energy Limited (ASX: LCK) is an explorer and developer of Energy and Minerals. Electricity, methane, and fertilizer is the focus of the company, with its Leigh Creek project in Australia.
The company recently announced to have made significant progress at the Leigh Creek, pre-commercial demonstration (PCD). Earlier the company has reported the initial results related to three phases of the gasification process. The gasification has an ignition phase, with a second phase involving pyrolysis and the final phase of commercialization.
The company reported data and results of production which indicates that the LCEP has successfully reached stable production within the gasification phase while operating at low flow rates. The company is working on the improvement of flow rates for the In-Situ-Gasification.
Below are the listed milestones in the Gas Production:
- The generator is operating within expected parameters indicating a significant decline in oxygen in the syngas.
- Results as per December 29, 2018 indicated that the PCD was producing all the gases needed to make ammonia and urea.
- Results as of January 7, 2019 showed that the same gases were still being generated and methane production has currently reached 20% of the total produced gas.
The pre-commercial development results indicate that the In-Situ-Gasification has the potential to enable a shift in the cost economics of Fertilizer production.
Ammonia and urea are created by reformation of Natural Gas into synthesis gas or syngas. The process in Australia involves fertilizer producers to purchase natural gas at prices between $8 and $12 per GJ and then reform that gas incurring an extra cost to produce the syngas. The syngas is needed as the feedstock for ammonia and urea production. The only current producer of Urea in Australia has recently stated that every $1 increase in gas feedstock cost reduces their profitability by A$14m and hence it lowers the economic viability of the company.
The Managing Director of the company Phil Staveley commented that after careful and expert management of the gasifier, the production of gases needed for ammonia and urea is currently taking place. The process of achieving the commercial quality of syngas production is a proof of lower technical risks of operating in-situ gasifiers at the Leigh Creek site, and it states the expertise of the company to the industry and stakeholders. Once, the company achieves commercial rates of gas flow and associated data, and they will provide further details on the pathway to commercialization.
Now, let us quickly look at the performance of Leigh Creek Energy’s stock and the return it has posted over the last few months. The stock of Leigh is currently trading at $0.120. It opened at $0.120 and posted a day’s high of $0.120, with touching a day’s low of $0.115. The stock increased by 4.348% approximately during the day’s trade. The company posted a negative YTD return of 4.17% and produced a negative return of 32.35% over the last six months period. It has a 52-week high price of $0.340 and a 52-week low price of $0.085.