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Written text can be notoriously easy to misinterpret, so let me explain that I'm genuinely interested - no slant intended.
Adrian87 - what's your background ? You're clearly deeply knowledgeable in the field of geology and mining, but you've suddenly popped up here on HE1 with narey a post to your good name. I like that you're keeping our hopes in check (keeping them to more realistic expectations) so do keep it up. A share like HE1 will have a lot of rampers, several well-informed cheerleaders and needs a couple of counter-balances such as yours (IE: well informed, presenting evidence).
So I'm just interested to learn how you know as much as you do. Don't feel compelled to reply if it's intrusive, of course.
Hi deepbluediver,
I fully agree with you they badly need 3D seismic or at least additional infill 2D lines. Looking at their prospect map on page 106 of the pdf, it seems the spacing between the existing lines is around 4 km. It would have been ok if this was an exploration well in a simple large anticline, but we are dealing here with tilted fault blocks, lots of faults and structural complexity, a lot could be going on within those 4km that we don’t get to see. The seismic quality for what I can see looks ok, these are shallow structures and so imaging shouldn’t be a problem. What concerns me here is also being able to accurately tie the stratigraphy from the wells to the seismic, as there are only two wells at this stage. Again, that’s ok if you a targeting a simple bump, but with this degree of structural complexity, you may easily drill a well that is not in an optimal position.
Relooking at the helium play system model (page 96 of the pdf), I can’t make full sense of the trapping mechanism they are invoking. Clearly, they recognise that faults are a migration pathway for helium (from the basement where it’s generated up to the surface helium springs), yet at the same time these faults are also preventing helium to migrate to the surface just by the right amount to fill a trap. Faults can have a dual behaviour but typically during different geological events, providing a barrier when they are not active (and not always), allowing migration when they are active. The slightest movement along these faults would cause fracturing, and even the smallest fracture would be enough to make everything leak out…and again we know that helium is leaking to surface because of the seeps….
Hi GLA,
Thank you for your comments, glad to hear that you feel strong about the management. I don’t know them and I might be too critical here, but so far I see a lot of problems and significant risks, unless I’m missing something. I agree if the management is well experienced, and with the help of additional data, eventually they might be able to find something quite valuable, but it might be a long ride…perhaps at this stage makes sense to me to invest a small sum that I can afford to lose and see how things develop...
Hi Adrian87
Having read all you wrote - your concerns are all very valid and totally something any of us invested should research into (if not already done).
The reason why my mind still strongly feels this project is worth the risk (for me personally) is because of the skillset and experience of the people behind it - from the board of directors to the CEO down to even the drilling company being used. There is a wealth of experience, research, and care being taken by HE1 I feel that negates a lot of those concerns for me.
Could there be dust in the first drill? sure, anything is possible! The question is, does the company have the means and skill to find a viable reservoir within Rukwa before moving onto the other two locations? I strongly feel like they do and hence why I have put my capital into it.
Obviously, if anyone does have strong hesitations then they should only invest whatever they won't lose sleep over if things don't go as planned initially. For me, the company seems like a once-in-a-lifetime opportunity and something I simply can not ignore but as always DYOR!
GLA
Come on Elon. Give us a Twitter shoutout!
Sorry I gave the wrong page number, not sure how that happened as I looked at the cross-section to get the page number ?.
I was wondering about the faults reaching the surface while others end below the river bed, all I could find was some seal, while others allow migration. All learning for me..
So glad I asked.
Its interesting they have not chosen any of the sites where the faults a covered by the river bed.
Mbuni is not shown, would like to see that now. Its probably public information, I had a good search but failed..
Thanks, much appreciated..
Thanks Adrian87
Thats a good summary. Just to add, CoS is 20%, likely the Seal parameter weighing the CoS aggregate down. I didn't see the details anywhere of breakdown.
To add, Hannam & Partners ran their valuation using the risked volumes in their paper.
On risks, i would have preferred to see 3D seismic completed ahead of any drill campaign. Whats your take on the 2D seismic quality, from the limited screen grab you can see on the report?
The cross section shows that you can have a variety of different play types in this area which is good, however again I feel a bit uncomfortable about all this faulting. Most of these prospects seem to rely on sealing faults (providing an effective lateral barrier for the accumulation), however as you can see from this cross section some of these faults extend all the way up to the surface into young sediments, hence faulting has been active until very recently and may still be active at present day. In general, old faults that have not been active for a long time (geologically speaking) tend to provide better seals, hence again I see risk linked to leakage along faults, and the seeps whilst demonstrating the presence of helium, may also be indicative of a leaking system (at least around the big faults). In general, I feel these guys have done good technical work and have probably adequately captured the risk in the report, there is a case for being even more conservative but you can see from their work that the risked prospective resources are about a tenth of the non-risked resources, indicating that the chance of geological success here is just over 10%. Something that people don’t like to emphasize to shareholders but important to bear in mind when investing in this type of projects
@Adrian87
Have you looked at the Geological cross-section showing Itumbula and Kasuku?
Would be interested in what you think.
page 22
http://www.helium-one.com/wp-content/uploads/2020/11/259989-Project-Apollo-CLN-reduced-memory-Final-13.11.20.pdf
I know there is a lot of enthusiasm but I feel a bit more cautious about big helium discoveries here. I’m new to this, but having looked at their CPR, no doubt there is a lot of helium in this area seeping out everywhere but the problem is how you trap it with the right geological configuration (reservoir and especially seal). Most of their prospects (although not all) are 3 way dip closures meaning they rely on a fault seal in the 4th direction and that’s quite risky already with common oil and gas prospects and probably even more risky with helium which requires really good seals (generally evaporites) and we know that helium is leaking to surface through faults. I’m not saying it’s impossible but I see significant risk there. Having said that I see good potential for the share price in the short-medium term, I guess they will probably encounter helium shows in the mud system during drilling enough to generate a lot of enthusiasm, but then the real assessment will be the well testing…