(Alliance News) - Helium One Global Ltd shares tumbled on Tuesday, after it said the Exalo drill rig in southern Africa will be unable to be mobilised for its Rukwa licence in early 2023.
Shares in the Tanzania-focused helium exploration company were down 24% to 5.37 pence each in London on Tuesday morning.
In November, London-based Helium One said it had signed a memorandum of understanding with Exalo Drilling SA for the supply of a drilling rig on the Rukwa licence in Tanzania.
At the time, the company said the Exalo rig was due to be mobilised to our Rukwa licence area in early 2023.
On Tuesday, however, Helium One said that the current operator of the Exalo drill rig in southern Africa has amended their contract with Exalo to allow for an extension of their operations for a period of up to 12 months.
"The company continued in good faith to negotiate detailed mobilisation and logistics arrangements until unexpectedly notified on January 2 that contract terms between Exalo and the operator had changed," the company continued.
Helium One noted that it is reviewing a number of alternative rig options for Phase II Tanzania drilling operations and will announce an updated timeline to drilling once new arrangements have been confirmed.
Chief Executive David Minchin said: "The decision by the current operator to pay rig retention costs rather than release the unit is both disappointing and frustrating. However, based on recent rig searches, the company is aware of a number of alternative rigs for our Phase II exploration drilling."
By Sophie Rose, Alliance News reporter
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Helium One (HE1)