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looks like more people are finding out about this project. Drilling a $38 Billion asset and a tiny market cap of $60 million. Drilling starts in 3 or 4 few weeks. amazing...
@british_mike..
Out of interest what is it about Miombo you like, is it the trap below the karoo section in the basement/source rock, or maybe that the fault line does not reach the surface? just fishing for info, not challenging..
Noticed that the shown exploration prospects have fault lines that reach the surface, while Miombo and others don't..?
Need to do some research, I see a lot more detail now, so need to find out what it all means,
There's some helium pricing info in DME's document, page 13..maybe more on other pages..
Courtesy of noob67
https://dashboard.cormark.com/servlet/display.pdf?repid=mmueller%40cormark%2Ecom_20201026113550930&userid=don%40desertmountainenergy%2Ecom
DeepBlueDivers CoS Explanation..
CoS - very simple term mathematically (and many ways to do it, for example, weighted vs unweighted) but can be misleading and confusing. An exploration CoS takes into account the probability of several terms for example, probability of Source, of Migration, of Trap, of Containment (sometimes you can also see Reservoir term but lets leave it out for simplicity).
Lets use an example, say we give each term a 70% probability - none of the terms can be 100% at exploration phase, 70% is pretty good. So, that's 70% probability each on "Source", "Migration", "Trap" and "Containment". In the most simplest math (no weighting), the overall CoS in aggregate is 0.241. (70% x 70% x 70% x 70%). So the aggregate can be low even though each term on its own is 70%. To bring the aggregate CoS down to ~0.2, all you need is to have two terms at 0.65 (65%), rest at 70% PoS if you consider only 4 parameters. In general cases where 5 parameters are considered instead of 4, then each parameter will need higher value (>0.7 or >70% probability) to bring the aggregate down to 0.2 (20%)
CoS,
DeepBlueDiver posted a simplified explanation of the CoS calculation as lots were asking how everything sounds good in the report until you read the CoS.
Its worth reading, still does not change anything as we have not seen the individual score for each of the risks in the calculation(source,trap,seal etc)
@britishmike,
Not sure which will be the first well, not seen any info on mbuni, just kasuku and Itumbula.
As shown in the geological cross section..
At first I was thinking Itumbula would be my first choice, then thought about Kasuku having a shallower depth.. I also wonder if the layers are thinner due to compression which I assume would make it harder for gas to reach the surface.. All guess work..
And I dont know very much, just read and put a question on the BB as sometimes I get some great replies..
@PersianTrader
Many thanks for the youtube videos. Very enlightening and good to get more background on the company. Sounds like it’s worth taking a risk with - no guarantee they’ll strike helium, but if they do, then big bucks.
Not sure about Kasuku - is that the first well?
Itumbula looks a good play... tests upper trap and some nice deeper tilted plays that could be sealed good and close to basement. Miombo looks tastey also.
Welcome to exploration drilling then, if it’s too hot for you and you can’t stand the heat - get out
Risk quite high then. chance of success not great
Kasuku shows 3 stack traps, each with faults on 2 sides, the upper trap appears to have a crest.
So I am guessing the lowest may be spilling and filling the upper two, and the crest could be a sealing structure.. But one of the faults may not be sealing and a path for a leak..
Any thoughts?
I think the biggest risk with the drill is if there's a decent reservoir seal. Yes, 10% helium seeping from the ground hints it's there and good quality but seeping from the ground is the migration trapped?
Oil and gas traps require seal but helium is soo light and can escape from any weakness in seal quality. The Crux interview suggested if all the wells fail on this campaign thd option B is the salt seal plays that are currently less researched at this stage
Welcome to the party Persian :) Your recent revelation regarding HE1 is the same one many of us have had over the last few months!
Others things to add are:
Most of the helium currently supplied to the market is as a by-product of oil and gas drillings and they'll slowly be taken offline over time and as Dai mentioned, the US has restricted their federal production to themselves (not sure whether any helium produced in the US is restricted for US use only, I highly doubt it given the country that the US is). On top of that, other helium up and coming players are only drilling for a tiny fraction that HE1 is. I think Blue Star Helium's best care scenario is still 5x worse than our worst case scenario.
HE1 is a company that'll be able to supply eco-friendly helium to an ever-growing market for the next century. That's a century of, presumably, straight, high profits. During which they'll explore for more helium, maybe like with oil and gas as demand grows the search intensity for helium grows too.
And since they'll be such a big player and one of the very few, I would assume they could dictate the price a bit more. I think even the price of helium is more like $350 - $400 now tbh.
The pricing is expected to go to 20p pre-drill and £1 post-drill. But remember, that £1 is only off of 3/4 drills that equate to only 18 BCF or so (the 18 is based on only the 3 drills, not sure how much the 4th will equate to). 18 BCF might be eye watering for the likes of Desert Mountain and Blue Star, but it's still only a fraction for us. And £500 mil mcap for the world's largest helium reserve? That sounds incredibly cheap. As I've said previously on here, IMHO, even £10 doesn't sound like a crazy number.
All I would say is, and this goes to everyone, buy as much as you can and sit on it. The more we all buy, the more we all hold, the more the price goes up and the more we all benefit.
@persiantrader..
Good videos, I had not seen one of them, here is a very good video you may have not seen since was not in your posts..looks like your 40m video to start with, as another great crux video..
https://www.youtube.com/watch?v=jqU0GhmCEhM
The CoS on the 3 exploration well combined has been given as 10-14% competent persons report
or 20% He1..
"In aggregate the competent person reports see 10-14% chance of success for the 2021 target prospects, although each prospect has multiple targets. However, HE1 sees around a 20% geological chance of success."
or
"We use the geological risking contained in the recent prospectus of between 10-17% for the prospects; however, we see this as conservative given the company believes that a 20% chance of success is more realistic. "
Whats success rate on this drill
DM mentions completing discovery drilling and field evaluation 2nd half of this year..
But i can only guess at all the steps involved,
I guess the field evaluation may include the other rukwa sites, 3D seismic,
I would love a big tree shake monday.
I am expecting a little delay at the first well,
it will take a day or two, at least,
I think, to get things back on track,
some recovery time after
the party hangover
but I bet those guys can drink a well dry
Fingers crossed, and wishing those guys the best of luck..
Any idea how long each well will take to drill ?
Correct Persian, but expect MM games as they love a stock that can and will return a handsome profit and will stretch to lots of dirty tricks to scare them out of P.I's hands. Would not be surprised to see a big treeshake from Monday morning as the price held up magnificently well above the placing price of 10p.
Yes this is a super amazing project ! Actually this is the very best in depth video on explaining the project https://www.youtube.com/watch?v=ZhGrrxAi5qE
And this video is very good on an analyst talking about the Value of HE1. They reckon if they hit just 1 well then the value of HE1 surpasses £1 a share on very conservative estimates. https://www.youtube.com/watch?v=lEfp3UCN20k
.....thing is they are drilling soon, its possible to have x9 in 2 months.. that's absolutely barking crazy
I will also note that drilling for helium is a walk in the park compared to drilling for oil.
this whole project is mind blowing to think they are going for the no1 helium reserve in the world, they have the cash now for all the drilling and its kicking off now. the news flow will be constant and the attention will grow...
So they are drilling for 138 Billion Cubic Feet of Helium Gas, Today's helium price of $280 per Mcf (1000 cubic feet) = $38 Billion Asset. Take a look for yourselves the CEO said it https://youtu.be/NMNTd0HJ3vM?t=630 And HE1 market cap is only £56 million ? I suspect this could jump to at least £150 Million market cap in the next few weeks while drilling is set up which is 35p. People have a small window of time left to get insane value. the other 3 helium companies he mentioned (at 5 min 50 secs) have +1000% of value due to helium price increase and shortage of helium.