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Prae
DM’s biggest challenge will be choosing the best contracts from the onslaught of customers
looking for long-term sustainability from an unrivalled volume helium supplier.
In at sub 10p, the dividend could be worth more than the initial investment, that would be something :)
Dai, yeah if I remember right DM said that they just don't have the contacts nor the time to build up contacts so the best solution is just to go to the wholesale market although.. I would expect them to change their mind one day seeing as they'll be the world's largest supplier. Would seem very foolish if they didn't, especially given the price disparity.
It would be interesting though to one day see where the SP rises to and if dividends would be paid out!
@noob67
Not sure about his pricing, but he knows there is a big difference between wholesale and end customer prices..
And he is not keen on letting the wholesalers take the biggest slice.
$30/share and dividends, I hope he rubs off on our management, that would be good for us..
Trek and Deepbluediver could be buying super yachts on those prices.
Me a nice convertible, maybe a sinclair c5 on lipo
@Prae, Wholesale only, I guess they are going to have so much they can afford to miss out on direct sales..
But I do wonder if HE1 might think twice, especially since both DME and Renergen are taking advantage of the direct sales route.. Would be good for us...
I am wondering what excitement beholds us tomorrow morning after that OTC...
Dai, DM has said that HE1 will only sell to a wholesaler and never go direct. I think, could be wrong here, but I think he said that maybe one day that might look in to it but it'll take a lot of time and effort to build up a ledger of people to sell to. Also, $1100 is roughly the price the end user pays for the HE
Thanks, you are right on some of your items. I do think the Holbrook basin has produced hydrocarbons from other zones but not from the specific zones that have produced helium. There are 28 statigraphic intervals. There has been natural gas produced from other intervals, as well as natural gas and oil. The Holbrook helium (with minimal hydrocarbos) has been found specifically in the Fort Apache limestone and the Coconino sandstones. Helium was produced from those zones (22 wells in 3 fields) from 1961 to 1976 (9 BCF total with 6 BCF from one field called the Pinto Dome). The best well at Pinto Dome produced 300 MCF/day for 15 years, almost 2 BCF or 1/3 of the Pinto Some production. Production was stopped because of low helium prices and current high helium prices make it very economic again.
There are no faults in the area. Like all helium, the gas was produced by radioactive decay (uranium, thorium) deep in earth more than a billion years ago. There was just some very fortunate sealing that must have occurred at one particular time over the eons. As the gas was migrating toward surface.
This is all over my head in terms of geology but at least I have been reading about it and trying to understand what is unique about Holbrook basin and about Tanzania helium - and trying to understand it.
Could be the middle man bit I suppose, He1 selling to wholesaler..??
Interesting he was talking about polishing and selling gaseous helium , think he said $1100/mcf for balloon grade, ..as apposed to $280, I assume US.
DME Doc
"The company would have the option to be able to sell “crude” (or raw) helium which has fetched prices between US$200-300/Mcf (~$265-400/Mcf) .........
but its decision to move ahead and construct a helium refinery/liquefaction facility being able to sell directly to end users, management conservatively expects it would be able to sell purified gaseous helium for shielding gas (99.999% pure) for at least ~$550-600/Mcf, net of expenses.
HE1 reports suggests it is also going to produce 99.999% helium, liquid form, and uses just US$250 throughout..
Must be missing something???
Oiler, he is JR
Apologies for being a bit off topic, but cash position is another difference arguably between DME and HE1.
DME already have over C$13m in the bank, and, if their share price remains above C$3.50 for just two more business days, they can trigger warrants worth over C$16m. They claim that will give them enough money to get to first production—which is pretty remarkable given that they’d still have fewer than 80 million shares.
Noob67, Thanks for video,,makes up for the Sunday Papers, and my favorite subject at the moment :)
Needed reminding of the risks
Wild Cats
Majors average 30% success, and juniors 14-17%.
Seen that 14-17% quoted in docs produced for HE1 investors, makes you wonder if there was any actual risk calculations done, or if the figure was googled..
DME just 60M outstanding shares, 1/10 our new total..
DME est yearly production 2026 +300mmcf
HE1 est 2025/6 +650mmcf/y on 6bcf case, that could be just Itumbula
Thanks @rpoodle and @ Scott. Looks like DME need to hit a layer of gas bearing rock that has 'buckled slightly' to provide a good reservoir; so an 'easier' target than the trapping styles at Rukwa ? The Arizona basin doesn't have the obvious fault lines either ?
Just trying to work out my best strategy here, the recent raise gives the company leeway for a few misses before it has a hit, but its still high risk. GL
Scott22: there’s next to no hydrocarbons in DME’s acreage, and they’re not drilling horizontal wells. But the rest looked spot on to me.
I hold DME. There are some similarities and some differences.
In terms of similarities:
1) they’re both planning simple, vertical wells.
2) next to no hydrocarbons in both of their acreages—the main gas is expected to be nitrogen for HE1, as it has been thus far for DME.
3) Despite Holbrook’s helium history, DME is exploring various layers that have never produced before—so in a sense they’re both chasing wildcats
4) helium concentration--both companies are chasing levels of helium far above the norm (DME had 4% and 7% in its two tested wells, and HE1 could be chasing 10%—most helium is provided at levels below 1%)
Differences:
1) size—HE1 is chasing elephants, while DME’s targets are far more modest (though still very very attractive)
2) location— Big one this. DME is based in Arizona and all its clients could end up being within a 200 mile radius. HE1’s location is clearly less advantageous.
3) exploration risk—DME claims that it has hit three for three (their third well was not tested, however, but I heard that there was helium in the drilling fluids). Obviously HE1 is higher risk, but all that could change after one well of course ;0)
I hold them both, so I’m embracing the differences and similarities....
Differences in Holbrook basin: 1) there are hydrocarbons in stacked geological layers. 2) helium mainly found in one or two zones that can be drilled horizontally, 3) the reservoir has been tested and produced at high level some years back from several fields, there is more knowledge about porosity and permeability of the reservoir 4) there is a great seal with salt. At Rukwa they are looking for more conventional traps along path from deep and ancient source to the areas of seeps. There are no stacked zones and no hydrocarbons. THe1 does not have have a discovery well yet, there is only only speculation about presence of a suitable reservoir and how it will flow. Uncertain if the traps will have adequate seals. (Some of the other targets if Rukwa fails are in old lake bed and may have salt seals.)
Another difference is that He1 is hunting a much bigger total resource. Both companies are kind of exciting for different reasons. HBer1 has a bigger potential prize, but also a bigger chance of being a bust.
Just trying to do some research into this company and their drilling programme last year in Holbrook basin Arizona.
Looks like they were successful with the first 2 drills. Depths were a bit lower at 2790ft (837 m if my maths is right) and 6- 8 weeks to complete?
The question is : How comparable is the geology between Holbrook and Rukwa ?
I know some posters on this board hold or have held DME shares. What are the similarities/differences between the 2 plays ?DME have found HE mixed with 80% Nitrogen which they are venting off, so seems we may be able to make like for like comparisons ? Cheers