Eastern Gas IPO to Raise $8–10 Million Backed by 453 Bcf Gas Resources

Strategic Spinout to Unlock Shareholder Value

Pure Hydrogen Corporation Limited (ASX: PH2) has announced a significant corporate restructuring with the planned spinout of its Australian natural gas assets into a newly formed entity, Eastern Gas Limited. This move is designed to crystallize value for Pure Hydrogen shareholders by creating a dedicated gas-focused company with a clear development mandate.

Shareholders of Pure Hydrogen will receive shares in Eastern Gas through an in-specie distribution, effectively granting them ownership in both companies post-IPO without requiring additional investment. The distribution ratio is proposed at one Eastern Gas share for every five Pure Hydrogen shares held, although the final ratio remains subject to confirmation.

Eastern Gas: Positioned for Growth in Queensland’s Gas Sector

Eastern Gas will hold 100% operated interests in two key Queensland gas projects: the ATP 927 Windorah Gas Project in the Cooper Basin and the ATP 2051 Project Venus in the Surat Basin. Collectively, these assets boast independently certified 2C contingent gas resources of approximately 453 billion cubic feet (Bcf), with substantial prospective resources underpinning future growth potential.

The company plans to use IPO proceeds, expected to be between $8 million and $10 million, to fund critical drilling, fracture stimulation, and flow testing activities aimed at advancing these projects toward commercial production. Both projects benefit from proximity to existing infrastructure and strong East Coast gas market fundamentals, including sustained high prices and forecasted supply shortfalls.

Capitalizing on East Coast Gas Market Dynamics

The East Coast Australian gas market is currently experiencing robust pricing, with LNG netback futures maintaining levels between $10 and $15 per gigajoule through to 2029. Regulatory and policy frameworks emphasize natural gas as a key transitional fuel, supporting energy security and lower emissions goals. Eastern Gas’s assets are well positioned to meet anticipated medium-term supply gaps projected as early as 2027.

With a strong and experienced board and management team, including industry veterans with decades of exploration and development expertise, Eastern Gas aims to leverage its strategic location and resource base to capture value amid tightening market conditions.

Implications for Pure Hydrogen Shareholders

Pure Hydrogen shareholders stand to benefit from this corporate action by gaining direct exposure to the gas assets’ upside through Eastern Gas shares, while retaining their existing hydrogen-focused investments. The spinout allows Pure Hydrogen to sharpen its focus on hydrogen production, equipment sales, and zero-emission vehicle technologies, while Eastern Gas concentrates on monetizing its natural gas portfolio.

The in-specie distribution requires no action from shareholders, who will automatically receive Eastern Gas shares credited to their existing holdings. Additionally, shareholders will have the option to participate in the Eastern Gas IPO to acquire further shares.

Looking Ahead

As Eastern Gas prepares for its IPO and subsequent development activities, market participants will be watching closely to assess the company’s ability to convert contingent resources into producing reserves and to navigate the evolving East Coast gas landscape. The spinout represents a pivotal step in Pure Hydrogen’s evolution and a potential catalyst for unlocking value in Australia’s energy transition.