The Nuenergy Gas Ltd (ASX: NGY) share price is on fire today. And that's an understatement. Nuenergy shares are up an extraordinary 151.72% today (at the time of writing) to 7.3 cents a share. That's after opening at just 3.3 cents a share this morning.
As recently as January this year, Nuenergy was a 1 cent share.
So what on earth is causing this share price explosion for Nuenergy today?
Indonesian approval lights a rocket
Nuenergy's explosive opening this morning can be put down to an ASX release the company made today. It came out just before market open. In this announcement, Nuenergy stated that it had received an "advance notice" of a virtual ceremony that will take place on 17 June.
The company states that it "has been proposed" that the Indonesian government's Special Task Force for Upstream Oil and Gas Business Activities will grant approval for Nuenergy's Plan of Development 1 at its Tanjung Enim Block in South Sumatra.
The Tanjung Enim Block houses a deposit of coal bed methane, which Nuenergy is planning on developing. The company tells us that this will "mark the first grant of a plan of development for CBM in Indonesia. Nuenergy states that this announcement represents "an evolution from an exploration to a development phase" for the Tanjung Enim Block.
Nuenergy's chief executive officer, Dr Ian Wang stated that: "This development represents a major step for the company and Indonesia's CBM industry to transition from exploratory into a commercial phase."
Nuenergy has promised to make a further "detailed announcement" on 17 June. Depending on a final grant of approval, that is.
About the Nuenergy Gas share price
Nuenergy Gas is an ASX mining and exploration company that focuses on gas and ancillary power generation. It has a primary focus on Indonesia.
Even after today's explosive pricing developments, Nuenergy has struggled as a long-term investment. It's still around 77% below its share price peak of 33 cents a share that we saw all the way back in early 2006.
On current pricing, Nuenergy shares have a market capitalisation of $133.1 million and a price-to-earnings (P/E) ratio of 17.7.
