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Yes, the permits for well design all look very similar across the flat land there, 2,500 ft vertical and cased to about half way down

Might have forgotten to factor in the assumed 1.9% helium concentration and used raw gas volume instead? But it looks more like one decimal place than two. Either way, we already know what income HE1 project from the first phase wells, plus CO2, so just extrapolate from there.

If you don’t know why confirmation of drilling a first production well derisks an O&G explorer then you shouldn’t be investing in O&G explorers (but I know you know anyway).

300,000 scf of gas (300 Mscf) at 1.9% would be 5,700 scf of helium per day, or about 2,000,000 scf (2,000 Mscf) per year, or c$800k. With luck, if things go well, you could project maybe $1m per year per well (gross helium revenue) minus opex, plus any CO2 revenue. So, again with some luck, that might yield say $1m net overall per well, in very rough ballpark figures (but lots of ifs). Half proceeds to HE1. So, very roughly indeed, they might perhaps see $3m per year from 6 wells of that type, of $7m from 15 wells, or $15m from 30 wells.

I have no idea where you’re getting multi millions per month, unless it’s a decimal place error?

"Can you explain the share price movements the day before an RNS is realesed?"

Don't believe any nonsense about some drill rigger's best friend's mate insider trading, there's no way that moves the price with six billion shares in issue. It's AIM, every listed company has to be advised and regulated by bigger fish. The draft text RNS goes past the Nomad for approval the day before. The Nomad is of course obliged to maintain confidentiality, even if they do share an office with the joint share broker and MM ;-)

Had them for months on the pc, makes a complete mess of reading and writing here. Emailed their support desk and they knew there was a problem, sent them browser code but no resolution until this week (ads moved a bit to the side of the messages now)

Not much chance of setting cement in those temperatures. Daytime due to warm up a bit now.

When there’s delay short traders will take a punt, it’s risky when news can break at any time but not surprising on AIM

The feasibility study isn’t a public document and won’t be published but there are details within it that should be published if the licence is awarded, e.g. revised estimates of recoverable and contingent reserves analysed in a competent person’s report.

Ouch, good luck to all involved

Possibly so, just remember to factor in any off taker’s discount (for transporting from source) plus loan repayments as part of project finance. For example, if they raised $50m from loans and $50m from farm in equity and then maybe paid off the loan within the licence period at say $5-10m a year. Say $10m a year including both debt repayment and annual opex costs, then taking a half share of remainder, increasing after loan repaid.

Plus Colorado, plus other future global project acquisitions, and new exploration, one step at a time, all in the right direction

“ So is it your belief the the southern Rukwa Helium Project is just double the size of our interest in Colorado?”

I have no idea how big it is but I assume the NAV is larger than Galactica-Pegasus (could be much larger). The Hannam research note in 2021 priced an initial discovery of 1bcf (from gross 138bcf prospective) and an eventual ~5bcf recoverable once fully derisked (but a lot has happened since then without much update).

I don’t know which prospect area are included in the 25-30 well development proposal. I don’t know what flow rates they can get from each well (we know what they think they might get from Itumbula if optimised with artificial lift). I don’t know the extraction capacity and processing rate of their proposed plant (but we know how much fluid might come from one well at ITW1).

Do we assume 30 wells flowing similar to ITW1, or is there reason to believe they’d be more or less productive (if similar, then just extrapolate the EWT numbers x30). We know they believe the project is profitable at that scale. I’m not sure what else we have to go on at the moment, until they publish some revised estimates.

They’ve used the same contractor previously, only needs a truck mounted water well rig for these drills. 750m vertical, hopefully straight forward 🤞

You can make guesses based on what we know but at the moment that knowledge is limited (we don’t have any estimate of recoverable or contingent reserves). We do have some broad prospective NAV estimates from 2021 (before drilling Tai and Itumbula) and we have some flow data from the EWT at Itumbula.

What you cannot do is start projecting revenue from prospective resource estimates. You cannot in any scenario expect to commercialise 138bcf of helium. The pre-drill NAV estimate for HE1’s licences in the Rukwa region was around 25bcf, of which some licences have been since relinquished as non commercial. The 2021 prospective NAV estimate for Itumbula was 5.4bcf gross, and 5.9bcf for Tai (before data from deep drilling). Even then, that’s gross “prospective” resource estimates not “recoverable” reserve estimates (we don’t know what those are).

In terms of revenue, it might be easier to start from the other end and work back from the known flow rates at Itumbula (maybe using the unproven optimal flow estimates) and scale that up to the known number of wells in the proposal (25-30). There are a lot of ifs there but, for example, it might be prudent to assume $1m gross revenue per well per year, plus any bonus from hydrogen (could be more). And maybe assume there’s at least enough supply there for the ten year ML period (could be longer).

You’ve already factored that the government takes a 16% stake in the project, but what about the financial partners (banks)? As reported at the AGM, it’s likely there will be a split of debt and equity partnership to fund the project (farm in / JV?). So maybe assume that HE1 retains a 50% stake in the project after farm in (like BNL do in Colorado).

So let’s say, for example, the 30 wells might produce $30m a year revenue per year, $20m net (after opex and debt payments), with half going to HE1, just as a starting point (could be more). It’s going to be a valuable commercial project but it’s not going to be “billions” per year in any scenario. I could be miles out of course but we wait for the CPR.

Dickie - those numbers are ridiculous

We haven’t any confirmed estimate of helium reserves, or how much is commercially recoverable, or at what cost, over what time period. You don’t value a company on the NAV, you want to know what future earnings it might generate. For example, if you believe HE1 can make $20m a year over a ten year period then you have a starting point for a valuation. Knowing there might be 1, 2, or 138bcf under the ground doesn’t help much (we know the theoretical potential, it’s the actual that matters).

20% correction to back around the 1p mark seems reasonable for confirmation that the first development wells are actually now going ahead this quarter. Given the weather there was always some uncertainty remaining until the drill hits the ground. Hopefully a successful drill to TD on the first one will add further confidence, then all eyes on the test results. As long as it’s similar or better than State-16 then each well is money in the bank from here. But unlikely to complete five drills without hitting a snag or a delay somewhere along the line, so be prepared for that too.

Leveraged shorts replaced by new leveraged longs, watch out for the P&D crew

Just ignore any ‘NT’ notifications on HL, they have constant glitches filling quotes. There is never any shortage of HE1 shares.