Proactive investors..19 Feb 2025 14:34
..apologies if already posted
HeLIX Exploration PLC
(
AIM:HEX
)
Savvy Helix Exploration on track to move from IPO to cash flow in less than 18 months
Published: 09:52 18 Feb 2025 GMT
HeLIX Exploration PLC -
It is rare for a natural resources company to progress from exploration to production, and then onto cash generation, in less than 18 months from its stock market debut. But that is exactly what Helix Exploration PLC (AIM:HEX) appears to be doing after listing in April last year.
Under the leadership of chief executive Bo Sears and chairman David Minchin, the company has swiftly established the commercial potential of its Montana helium assets. Sears’ initial thesis - that the inert gas was present in quantities and concentrations that made extraction commercially viable - has been quickly validated.
Helium is a critical element in several high-tech industries. It cools the superconducting magnets in MRI machines, plays a key role in semiconductor manufacturing, and is used to pressurise rocket fuel tanks. It is also essential in scientific research, including cryogenics and nuclear magnetic resonance spectroscopy.
With global demand for helium growing, the market is expected to expand from $4.2 billion to around $7.47 billion by 2034, an annual increase of 6.7%.
Progress maker
Against this backdrop, Helix’s progress has caught the market’s attention.
The company raised £5 million in January to advance its flagship Rudyard Project, where it has already drilled its first well. Darwin #1 uncovered a 236-foot gas column that flowed at 2.75 million cubic feet per day, with a helium concentration of 1.1% - comfortably above the 0.5%threshold considered commercially viable.
Each well at Rudyard has the potential to generate around $4 million in pre-tax cash flow annually, with the site able to accommodate eight to 12 wells. The main constraint is funding the drilling programme quickly enough to accelerate production, although with each well costing only $1.2 million to drill the company has stated it will look to self-finance growth through early cash flow.
A key component of the plan is a processing plant, which Sears acquired for a relatively low cost of $500,000. The final piece of the puzzle is securing a membrane system to separate the helium. With these in place, production is expected to start by early summer.
Flexible approach
Helix is taking a flexible approach to sales, engaging multiple buyers rather than locking itself into a long-term contract at a fixed price. “We are gathering off-takers right now,” says Sears. “I don’t think we’ll have too many issues with that.”
While Rudyard is the immediate focus, Helix has also been advancing its Ingomar Dome Project, another significant helium asset in Montana. Engineers will soon begin acidising the Clink #1 well, a process that will clear near-wellhead damage before testing the Charles Formation.
A second target, the Flathea
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