Member Info for andypaps

"Could I ask , when is the end of Q4?"

Though their first set of annual accounts will be made up to September 2024 (to be filed by 23rd March 2025), so their 2025 accounts will also be to September, therefore generally speaking to the lay person I think they are talking in traditional year quarters and not their financial quarters , hence Q4 production target starts 1st October 25 - to 31st Dec 2025.

Djm1 - I do think there is a chance that the presence of a deep-seated structure can lead to a continuous, albeit variable, production and movement of hydrogen from the Earth’s core and mantle toward the surface along fault zones.

I think the fault driven release act as pathways for hydrogen to migrate toward the surface. As you know these structures allow hydrogen to escape through weak points in the crust, especially during tectonic activities that generate new fractures or expand existing faults, which can periodically release hydrogen in pulses rather than a steady stream. However I think due to the size of the reservoir(s) it will always appear continuous.

Gold Hydrogen Ltd (GYH) are an Australian company exploring for Hydrogen & Helium. It was one of the companies I did a deep dive into looking at geology, newsflow and shareprice. This is one of the reasons I think 60% plus hydrogen concentrations are very possible when looking at this and the Outokumpu project in Eastern Finland.

GYH were formed in 2021 but I believe their newsflow profile from October 2023 to May 2024 is the timeline that most mirrors where Helix are now i.e Oct 2024 = GYH in Oct 2023. GHY were A$0.235 on 25th Oct 2023, by 2nd Nov A$0.48 and A$0.97 by 23rd Nov. From 23rd Nov 2023 to 22nd May 2024 when they peaked at $2.15 they actually went as low as A$0.64 intra-day (24th Jan 2024).

They never produced Helium or Hydrogen for market. They have larger potential reserves than Helix but the jurisdiction (their actual state compared to Montana) and board composition are not as good - the share price sits at A$0.735 today due to hydrogen being produced by serpentinization and the water not deep enough so as not be problematic in terms of cost.

I think we may have a deep-seated structure where streams of hydrogen arise from the Earth's core and mantle along faults as Ingomar is about 260 miles from the North Entrance of Yellowstone Park. If it is Sepentization then the water sits well below the hydrogen shows as the well's integrity was good not withstanding the shale issues.

It's generally accepted that there are four main reasons for not casing to Target Depth. I've considered the four below and arrived at reservoir access as being the most likely:

• Cost Considerations: Casing the full depth of a well can be expensive. The company may delay casing deeper sections until it confirms significant gas shows or other economic justifications for the expense. Unlikely to be the reason as plenty of money left and only 400 feet or so to case.

• Geological Challenges: The deeper sections may involve challenging formations, such as unstable rock or high-pressure zones, making casing difficult. Possibly a reason re. high pressure but I still don’t think this is the main reason.

• Testing and Evaluation: A company might want to conduct more tests to assess the hydrogen and helium concentrations before deciding whether casing the full depth is necessary. For example, elevated hydrogen and helium levels could be detected through mud analysis first, allowing decisions on further casing based on this data. In reality we have had this stage already.

• Reservoir Access: Leaving the lower section uncased might allow better access to the reservoir for testing gas flow characteristics. IMO this is likely to be the reason why casing wasn’t extend to the last 420 feet.

Excuse the long post – I don’t post too often! I found the RNS slightly unusual. The production casing and cementing nor actually any of the rest of the RNS needed reporting (as the casing & cementing was covered by other RNS and nothing went wrong). Also any exceptional results on testing would have to be reported to the market. So what is this RNS actually saying. Reading between the lines of this part

“If initial results of a perforation are positive the Company will report gas composition to the market and perform an extended well test on the interval before moving on to the next horizon.”

They know the very first horizon they test i.e the hydrogen/helium at the target depth will yield strong results that go straight to extended well testing. Having just hydrogen that flows at a decent concentration @10% opens just that part of the company to a £100m valuation i.e 80 pence per share. Valuation at this concentration level is not derived from production and the NPV but from being a flagship hydrogen project and that numerous entities will want to be associated with.

Having been a holder and continued buyer since May I have done a lot of research on this to the extent it is now 100% of my SIPP & ISA and 20% of the wife’s SIPP. It is not reckless as there are so many backstops in terms of assets. Ultra conservative figures for Rudyard gives me a 26p price (not a valuation but what the share price has to hit it for that part of the business if at all commercial) and Ingomar is 96p for the helium element. The hydrogen element as stated is 80p. Total £2.02!.

For my valuations I’m using 0.9% helium for Rudyard (this is what I expect will be the companies final figure when redoing the NPV calculations even though “concentration flows of up to” would be higher), 1.5% Ingomar (though I think this will be 1.9%) and 10% for the hydrogen.

However my research points to Helium flows in the first target zone tested to be 60% plus. On a pure production basis based on P50 reserves this equates to £4.50 per share (NPV8) with the tax credits assumed to be the max at $3 per tonne. Therefore my ultra conservative price on this element of the business at 60% hydrogen concentration is £2.70.

Helium grade above 0.5% He is considered highly commercial by management

Source: Helix exploration website

https://www.helixexploration.com/project/ingomar/

"I can't help but think the real value would come from going in to production and paying dividends."

Fair point but £250m would equate to £1.99 share price with Rudyard still on hand. Production and dividends are realistically 24 months away. The opportunity cost of not taking the offer would be large for me as I have numerous plays that I'm looking to do over the coming weeks/months e.g RMR, MOS, PPP (when back from suspension), SCE etc with other new potential multibaggers always showing up.

Oberon are so far removed from Montana that the selling was just a case of de-risking. When you factor in that they made an operating loss of £43k in their last filed accounts having turned a £1.7m profit in the prior year I would say holding at least 7% at this stage is quite bullish for them given they were mainly in at IPO. Six of their directors hold trading accounts with the company (as the 7th director resigned in June but still is likley to have an account) and my gut says it's mainly their accounts holding the 7%.

EP(A) 155

Mosman has been advised by Georgina Energy plc ("Georgina") that the EP(A) 155 approval process is on track and the meeting with the Central Land Council ('CLC') took place as scheduled earlier this month. Mosman has 100% of EP(A) 155 which may reduce to 25% if Georgina meets certain farm-in conditions, and if Mosman elects to be carried through drilling this may reduce to 10%.

Bought another 37,500 as a top up at 18.40p at 11.36am with Interactive Investor. Expecting an RNS early next week. Irrespective it feels like a floor and whether I could get a penny or two better in future will have no bearing if this does what I expect it to do.

I thought I would join the party. Haven't done any due diligence but my investment reflects that. Plenty of profits and potential in my core holding(s) to treat this as a Grand National Runner.

An investor emails DM & BS. DM answers:

Investor: Just listened to the excellent interview with Zak Mir and noted that we didn’t hit the pre Cambrian with our first rig. Is there appetite to take the hole deeper with the new rig.

DM: Thank you for reaching out.

Yes we would absolutely take the hole deeper with the new rig although this depends on the condition of the well to be determined by the results of the wireline.

If everything looks OK then we will have the equipment on site to take the well all the way to pre Cambrian basement. However if we think it is safer to get the reservoir behind casing and flow test what we have already identified we will do that in preference to deepening the well. The continuation of this system below 8000 feet isn't going anywhere and we can happily test that with subsequent drilling so it is about making the right call at the right time with the data in our hands.

Sorry I'm not following you so I doubt tis answers your question but the initial rig will go to Rudyard (my guess in a month or so after its prebooked jobs finished) as even now it could not go directly to Rudyard even though the use of it has finished quicker than anticipated as it would ikely overlap wth the rigs next booked job.

"So once again ... why do they have to finish ops at Clink 1 before they move on to Rudyard ?? That answer still stands so I feel you need to do some more research IMHO"

They would not if the drill rig they were using was not booked. It has a couple of jobs before it goes to Rudyard. As it's a 8,000 feet rig you would imagine it would be digging deep on the other two jobs otherwise a or smaller one would be being used. Reading between the lines of Bo's Proactive interview (about 3 weeks ago )I think it would be the best part of a month before it's at Rudyard ...

I saw some discussions on this board as to why HEX valuation was a lot less than HE1. My two pence worth is that HE1 has been going 9 years and has a "cult" following. It has raised over £50m in that time so a lot of people are emotionally invested. HEX hasn't even been going 9 months.

I watched Lorna's HE1 video from this morning (CEO HE1) that slightly spiked the HE1 price. I found it disingenuous on 2 or 3 fronts, especially where she talked about artificial lift verbatim "almost probably 50% of all wells on production will use some form of artificial lift, across oil and gas sector, helium......"

The actual percentage of helium exploration companies using artificial lift is likely very low—probably less than 5%. Artificial lift might only be used in specific cases, such as in wells that encounter water accumulation or declining pressures in aging reservoirs, similar to how it is sometimes used in natural gas wells.

In my book HE1 can't be commercially viable using artificial lift with its unique geological nature - and to a degree I believe the acquisition of Blue Star Helium was perfectly timed to create a smoke screen. Cult status means that HE1 could come out tomorrow and say Tanzania isn't commercial and they are pulling the plug on the Blue Star deal and it would still be worth £21m MC (same as HEX at this point), as their crowd would be pumping on Reverse Takeovers etc.

It's all very amusing if it wasn't for the fact that AIM investors in their SIPPS and ISAs have been stuffed at the expense of HE1s board and cronies. This is too common on AIM especially among the exploratory companies. The expertise of the HEX board and their 11.8% shareholding (DM & Bo) is worth its weight in gold so I'm fully invested.

Historically this will become one of the companies that will get case studied at business school when looking at exploratory companies . There has been so much going on over the years.

Funding Challenges: The company has raised funds multiple times, but critics argue that it has not always optimized the timing or amount. This has led to shareholder dilution and concerns over its long-term financial sustainability.

Operational Missteps: There have been delays and setbacks in their exploration activities, leading to skepticism about their ability to achieve commercial production.

Investor Confidence: Fluctuations in the share price and inconsistent communication have eroded trust among investors.

I always say that to be a good CEO at a listed company you have had to be a trader to understand all the nuances in investor sentiment and communication.

This is te area of concern and why the share would be selling off:

"with the addition of artificial lift in the production phase this becomes a globally significant helium project in southern Rukwa."

It reads as though it can only be economically viable with artificial lift.

Artificial lift in the context helium production refers to a set of techniques used to increase the flow of fluid or helium from a well when the natural pressure is insufficient to bring the hydrocarbons to the surface. What is strange is that is usually happens as a well matures, the natural reservoir pressure decreases, making it harder for fluids & helium to flow naturally. Artificial lift systems are deployed to sustain production and maximize the recovery.

The cost of artificial lift systems can vary widely depending on the type, complexity of the well, and other factors like location, depth, and the required production rate.

Electric Submersible Pumps (ESP): More expensive, with installation costs between $100,000 and $500,000. ESPs are also energy-intensive, leading to higher operating costs.

Gas Lift: Generally has lower installation costs compared to ESPs, but it requires a steady supply of injection gas. Initial installation may cost $20,000 to $100,000, with ongoing costs for gas supply and compression.

Progressing Cavity Pumps (PCP): Installation costs range from $30,000 to $150,000, with moderate maintenance costs.

Hydraulic Pumps: Similar to PCPs, with costs between $50,000 to $200,000 for installation, plus operating costs related to the pressurized fluid.

Given the context of twenty to thirty development wells, the overall cost for artificial lift systems can be significant, potentially ranging from several hundred thousand to millions of dollars per well, depending on the chosen method. However, the alluded to positive economics mentioned suggest that the expected production increase and revenue from using artificial lift justify these costs.

If I trusted the board and their history was not so tainted I would suggest a play but at these levels there are better helium plays. DYOR just my opinion.

The most significant aspect of the RNS was the "significant shows in the Flathead". A prior RNS had already updated significant shows in Amsden & Charles but was a touch quiet about the Flathead beyond helium shows at all layers due to the talk of hydrogen. The Flathead per the admissions documents had the biggest reserves in the good and best cases so significant helium shows here in a new RNS is major.

"has encountered significant shows of helium and hydrogen gas in the Amsden, Charles, and Flathead formations."

The use of casing through shale is not just common but is also an industry standard in many regions, particularly in North America, where shale gas and oil operations are prevalent. HE1 in Tanzania lacked the expertise and equipment (cost issue as so remote) to attempt it. Funds were used for further drilling and they never wirelined the Karoo Sands area in the end.

This is nothing like the Tai-1A where Helium One encountered significant challenges during the drilling of their well due to the Karoo sands in Tanzania. Our geology is completely different and numerous wireline drilling in the province prove it.