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@skittish, well that depends on heights of the closure across its width, and whether DM is going for a discovery or well finished for production
@skittish, DM commented on an interesting spot adjacent to Tai-1, which I assume is the new base of lake bed target..
For some reason I am under the impression its to the SW of Tai's pad, have I picked that up from you..?
If you look at the seismics sections line 13/14, & map of faults, from the presentation/meeting pre-Tai drill, and then look at the latest presentation for same images, they don't look the same..??
Now DM stated the 3 way closure was about 2-3km wide, and 5km long.. I took closure to mean the size of the trap/seal..
If so I assume thats the Karoo closure, as post Tai interview he talks about the lake bed being a bit of a unexpected surprise...Although he seem excited about both targets previously..
Anyway assuming the karoo closure is 2-3km wide along the SW line, I would be expecting stacked targets as long as the new lake bed target is above that closure, ?????
Skittish did DM not say just before the hole collapse that HE1 were looking to talk to end users which must have meant that they were pretty certain of a discovery at the time of the collapse.
@Skittish
I agree with your cash assessment, I did some estimates of my own which assumed they might have tightened the G&A + Salary budget while 'in limbo' so to speak. I came to a figure of around $6.5-7m - very similar to yours. I do however think a raise might be on the cards, subject to share price movement in relation to the upcoming drill news. I have seen people on the board saying they think the company won't be able to facilitate a raise, I looked into this and contacted a friend within that side of the industry, he outlined to me that these claims are false (if I'm honest I wouldn't be able to repeat and explain the reasons why - this is outside my area of knowledge to fully understand).
I disagree with the one well theory - I think it will be two. One testing the deep karoo play and one testing the untested lake bed closure play. I believe it has been stated they will drill to 1300m which means they must be drilling the northern extension of Tai, and not the original Tai site. Having looked at the 6 new northern targets, there doesn't appear to be a cross-straigraphic group stacked target (just the proposed stacked lake bed closure) at any of these northern extension sites, and therefore are (in my opinion) likely to be running two drills. in regards to time given the rough rig parameters, it should be possible to drill down 1300m in ~2 weeks, test in 1 week and then move onto the lakebed play very quickly.
Also for anyone interested here are a couple of views of Tai-1.
This was taken on 26-5-2022 (2 days ago) Tai-1 is the light brown area immediately to the NW of the red dot.
https://www.flickr.com/photos/194934344@N06/52105115900/in/dateposted-public/
This was Tai-1 a couple of weeks earlier on 6-5-2022
https://www.flickr.com/photos/194934344@N06/52104860019/in/dateposted-public/
Comparing the two images it is easy to see that the dry season has already started, and the area is becoming far less lush.
And this is an image from 26-5-2021, showing the drilling pad under construction.
https://www.flickr.com/photos/194934344@N06/52104932794/in/dateposted-public/
That day they tweeted a video showing the gravel being spread, and the next day the completed gravel pad. So I suspect we will not have to rely on satellite imagery to follow progress as the He1 twitter feed will be much more active come end September/beginning of October.
Will keep an eye out though for any obvious and untweeted changes.
Been thinking about what DM has been saying in the interviews and the news released last week, and FWIW these are my thoughts - subject to change if new information comes in - but I don't think it will change that much.
As always the starting point is finance, at year end they had $9.7M in the bank. In the 6 month period that they were drilling last year covered by June to December 2021 cash went down by $6.1m of which $1.7M was administrative expenses. So very roughly drilling and seismic cost $4.4M, and admin costs around $3.4M per year.
So to get through to December 2022 and admin is roughly the same, (I know they've hired a few new people, but most are probably not full time) then they'd have around $6.3M to cover the drilling (and anything else) in 2022.
Now DM said what I though were a few interesting things in the interviews, both of which were scripted along similar lines -
1. "We know that (Tai) it's got excellent quality reservoirs" - now if there is a reservoir there it must contain something. He doesn't say there "appears" to be reservoirs or the "anticipated" reservoir, he refers to reservoir.
2. "Maintain razor sharp focus on a discovery" - that is the focus, that is all that matters. Not exploration, not appraisal, not "defining the extent" of - but "discovery", and that is all that matters to Helium One.
3. Q - When are they drilling? A - Q3 - but DM said "end of Q3" is the target to drill - so any slippage is at least the end of September, possibly into October to start the drilling. Last year flush with cash, they got things together within a couple of months of the placing, rush rush, this year much more laboured and slower, maybe also a little cheaper, £ for £?
As I've said several times the company itself has deliberately ruled out a placing, they can't do it without a GM. A signal I think of their intent not to dilute.
In addition the rains should start around December, so they've left themselves a brief window of around 8-10 weeks (max), mid September to end of November to drill and then get all packed up.
So where does this leave things?
Cash is a little tight, there is a razor sharp focus on a single objective - discovery - they have only a brief time in which to do it around 8 - 10 weeks maximum, probably less in reality, but he also says
"When we deliver a discovery at Tai, we have a clear path to production."
To me that means that they intend drilling only one well, Tai-3, in the 2022 drilling campaign - but that is all that they need. This will get them the discovery, and after that all finance will be easily sorted.
Of course there is a flip side, if there were to be no discovery at Tai-3, but DM isn't bigging this up to raise, because we all know that he cannot. So no point in talking it up, as the drill bit will do all the talking.
So it is one well only, Tai-3, but everyone will be happy.
@Dai, yes, Skittish, thanks for that, good weekend , cheers
@Sinequanon, Skittish is the map detective :)
@Josh, appreciate all your replies..
@Sinequanon, I have an awful memory, so have go back and read things over time after time...
But DM did a detailed presentation on Tai...Multiple targets, in multiple horizons, So it was not all about the Karoo..
And he suspected the clay being as was..."areas which are in the red sandstone which might be bentonite beds"
"we've got you know nice repeating reservoir seal structures especially throughout the karoo "
There were 2 primary targets, obvious as DM described, 1 being at the base of the lake beds,(below), the other in the Karoo..
There is a slide showing the faults with a scale, and 2 seismic sections that show both targets. Using the scale you can see the highlighted targets are quite a width... They appear comparable in size if DM highlighted the actual areas, not wild circles...
Anyway after following other companies drills for gas, you get to notice differences in steps taken, may be just not mentioned...but I dont have the knowledge to know if thoughts are valid...but waiting would have been part of a step,
And it sure is obvious we don't get given the full picture, but I think thats all about the share price during times of inactivity...
Anyway fingers crossed on the rig tests, after that its a question of whether our bits and bobs have next day delivery and if we have an honest delivery driver ...
Agree with Dobbyy..Josh I reckon you're our resident expert! great to have your input
I think a lot of this comes down to if you believe what they have said about all the problems last time, helium shows but no calibration on the machine to prove it - not being able to test ect..
The fact that they are going back and re-drilling is a good sign for me.
Thanks for all the post Josh your updates here and the telegram group are very helpful.
@dai
We won’t be buying a rig and ancillaries - far too expensive for us I am sure.
@MRBENSON
I am involved in the environmental/ESG side of mining, across a few projects.I also have geo credits at UG level along with a very keen interest for the subject still!
Hi Josh, I was just wondering, do you have a background in this field, as you seem to have very good knowledge?
TAI :-3
The mk3 even looks friendlier ! #Tai :-3
@dai, those 25 steps lol unlucky indeed, you will remember as you have a superb memory, the discussions after the first drill duster how we heard first about Tai-1a, which then became Tai-2, and the chap on here that often does the painstaking map overlays ( respect to him, sorry I forget your name) etc says there has always been another ‘dot’ near Tai-1. It will be interesting to see in a few years time how many drills we actually sink at Tai, DM is so obviously enamored by it, Tai-2 I believe was drilled simply to collect a little data and fulfil Mitchells contract, the relationship deemed to have irreparably broken down, I believe they knew the seal pinched out there, I believe the pre mentioned ‘dot’ is a ‘few steps’ in the opposite direction ?
Third time lucky ;-)
@Josh. I was being sarcastic, like me, you have assumed it has been demobilized, DM has not said so, but he could have..
I doubt but may be its a purchase, on the condition it passes the MOT, A1 ready for a Tai discovery, and many more drills after..
I recently read an article where a company bought their rig, along with the required supporting packages for their drilling campaign, so its possible..
They did say they had options, which I assumed was different models of rigs, hired..
Well it was unlucky they moved 25 paces and pinched out..lol
Anyway I think they missed the sweet spot...we will see by how much in Q3...
I do wonder if that wait was longer than expected, and thats why we had the sell off..
AP could well be right with her hunch..
Good night :)
I will let you think about what does not get caught on ledges,
Yes, as makes sense? It may be easier if you state exactly what you're trying to imply instead of being so cryptic and maybe I can help you to understand further?
Running testing of O&G rig is very commonplace following the demobilisation from another project. It is my belief that the rig has become available recently (within the last 3 months or so) and therefore requires this testing before being shipped out to the outbacks of Tanzania, as also explained by David in the recent directors interview. It isn't a test to see if it's tough enough for the job, think of it more as a getting a service for your car before taking it abroad. Furthermore, it likely isn't damage as in someone has pulled something off of it, but more a test for wear and tear where the onus falls upon the provider.
In regards to for your Tai2 comment: It's not luck, it's the summation of multiple highly educated, seasoned geologists and engineers interpreting the geological data they had, in order to identify the confluence of structures they believe hold trapping/seal potential.
Tai-2 was just 25 foot steps from Tai-1, amazing luck they hit those shows then ;)
@Josh, You have a picture based on what you have been told, looking at the pieces placed in front of you...
A bit like we have a picture He1 have arranged some sort of endurance testing before deciding if the rig is tough enough for the job..
Its probably been stored away and requires some maintenance and certification by the owners,
If it had been damaged then I would have thought it was the responsibility of the previous users, but the just my assumptions..
As a point of clarification, I believe you are refer to the helium gas show within the red sandstone and are questioning why they didn't go that far on Tai2. Tai2 didn't sit upon a suitable trap and seal, so they wouldn't have expected to have found a helium show within the sandstone group at this site.
@Dai
In regards to Tai2, I believe they were doing both. They were testing the prospectivity of the lake bed formation as well as the localised clay dissemination (through wireline logging) as a proxy for understanding basin-wide seal and trapping potential of what is now known as the 'shallow targets'.
I am unsure what you are getting at with the second part of your post, but I will try answer it how I understand you comment. If you could elaborate about what extra data you think they were collecting, that would be interesting.
I believe the 8 day delay is likely accounted for by three main factors:
1. Unspecified uncertainty - given the evident unsuitability of the rig, they needed to come up with a plan on the fly.
2. Moving the drill rig
3. Pre-spud drill testing/ensuring the wireline tools were still functional (as is standard)
The reason they thought they had hit the big time was because they identified multiple helium shows across multiple distinct stratigraphic layers (a strong indicator that source rock and migration was no longer a risk). On top of this they noticed bubbling within the drilling mud, alongside helium shows on gas chromatography, which combined provides near certain qualitative proof of free-helium.
The target was always the Karoo as they had reason to believe (based on the geo work) that there was a claystone unit that may act as a seal (which they further went on to prove as the 130m thick layer). Therefore it makes sense they would want to go further down to the target site.
As for 'Not everything gets stuck on ledges..' - This comment has confused me, because this is exactly what happened with the wireline and accounts for why they couldn't test the 5 deeper karoo shows.
@Josh,
The RNS for Tai-2 stated they were going to test ONE OF the untested shows. On the other hand Ians interview suggested they were collecting data which is what your pointing out and turns out to be the case.
But have you considered they were collecting the extra date while waiting?
There is an article, where the guys thought they hit the big time, then the drill bit snapped, that was at 50% the depth that rig was rated for.. Those things happen.
Plus the news flow was always there is better below lets not stop, may be that was an error, who knows..
Not everything gets stuck on ledges...
Now I have not said anything for or against......
@Heliumbull, I am sat here thinking the same, DM gives me mood swings, I am not fan of his PR...
My last post is a positive, or a negative depending on a set of events, like the right wine with the right food or in my case larger with a curry, Ale with cheese, and never milk chocolate with any larger or Ale..
@Dai - What is missing from the story?
They didn't drill deeper for Tai2 because Tai2 was never designed to be a Karoo testing drill. They realised they didn't have the right drill to test an unconsolidated reservoir so they used Tai2 to get more detail on the stratigraphy at Tai (looking at clay sealing) and to test the shallow plays that hadn't been fully tested at Tai1. This also acted as a way to save money, as they were paying by the meter and not by the drill. This was all stated in the varying Tai2-associated RNSs at the time.