BPH Energy Advances Hydrogen Tech Amid PEP-11 Permit Setback and Capital Raise

Capital Raising and Option Issuances

BPH Energy Limited secured fresh capital in the December 2024 quarter by issuing over 576 million listed options at a nominal price, raising approximately $566,000 before costs. This placement was approved by shareholders in October and executed in early November, reflecting the company's ongoing need to bolster working capital amid operational expenditures. Additional free attaching and broker options were also issued in relation to an earlier share placement, while a director received unlisted options as part of remuneration, underscoring the company’s efforts to incentivize leadership.

Strategic Investments in Hydrogen Technology

BPH increased its direct interest in Clean Hydrogen Technologies to 16.3%, following the conversion of a $950,000 loan into equity. This move aligns with BPH’s strategic focus on proprietary hydrogen production technology, including the development of a reactor capable of producing up to 15 kilograms of hydrogen per hour. The investee company is also pursuing new patents related to this technology, signaling potential intellectual property value. BPH exercised a portion of share options in Clean Hydrogen during the quarter, further cementing its commitment to this emerging sector.

Regulatory Setbacks with PEP-11 Permit

Advent Energy, in which BPH holds a 35.8% interest, faced significant regulatory challenges as the Joint Authority refused applications related to the PEP-11 offshore petroleum exploration permit. This decision, communicated in January 2025, follows a protracted review process including a Federal Court judicial review application and a preliminary refusal stance by the Minister for Industry and Science. The permit remains valid for two months post-notice, during which the Joint Venture is exploring legal avenues to challenge the refusal. This regulatory uncertainty poses a material risk to the company’s exploration ambitions.

Advancements in Medical Device Technology

BPH’s investment in Cortical Dynamics Limited, a neurotechnology company developing the BARM™ EEG brain function monitor, continues to show promise. Cortical was selected for a prestigious Biomedical AI Sprints Accelerator grant, positioning it to leverage artificial intelligence and data analytics to enhance perioperative anaesthetic management. This diversification into medical technology complements BPH’s energy sector activities and may offer new growth avenues.

Financial Position and Cash Flow

Despite operational cash outflows of $170,000 for the quarter and investing cash outflows exceeding $1.1 million, BPH maintained a robust cash balance of $5.3 million at quarter-end. Financing activities, including equity raises and borrowings, contributed positively to liquidity. The company estimates it has over 31 quarters of funding available at current operating cash burn rates, providing a significant buffer to support ongoing activities and strategic investments.