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Paul - it makes complete sense for a small company like HE1 to go after the Galactica short term with a self-sustaining project from half a dozen wells in 6-9 months. That’s exactly what they were hoping for at Tai, as a first project within their scope and timeframe. As it’s turned out, Tai-Itumbula requires a larger scale project on a longer time scale. It’s not something a company like HE1 can bring on stream alone or wait long enough to realise without other revenue streams. It will be much better suited to a later stage project when they are on their own feet, or to sell on. They have licence options for development and expansion in Colorado, and they may have short term options as a drilling contractor/farm in partner to other prospects in Tanzania. They’ve given up all their TZ exploration licence areas now so the focus now is clearly on production and/or a rotation to explore in the US. One step at a time.

Paul - it makes complete sense for a small company like HE1 to go after the Galactica short term with a self-sustaining project from half a dozen wells in 6-9 months. That’s exactly what they were hoping for at Tai, as a first project within their scope and timeframe. As it’s turned out, Tai-Itumbula requires a larger scale project on a longer time scale. It’s not something a company like HE1 can bring on stream alone or wait long enough to realise without other revenue streams. It will be much better suited to a later stage project when they are on their own feet, or to sell on. They have licence options for development and expansion in Colorado, and they may have short term options as a drilling contractor/farm in partner to other prospects in Tanzania. They’ve given up all their TZ exploration licence areas now so the focus now is clearly on production and/or a rotation to explore in the US. One step at a time.

Galactica is not exploration, it’s a commercial development project, although not without risks. They’ve already flowed gas and the new wells will feed a production plant aiming to generate first revenue in the next 6-9 months.

Cat - this old contextual information is redundant to current knowledge and operations. HE1 has ended all its exploration licences in Rukwa and is focused now only on commercial production projects. We need to know the revised resource estimates for Itumbula-Tai not for the whole of Rukwa. The unproven estimate for Itumbula was around 5.4bcf with assumed 1bcf recoverable P50. The FS should include updated modelling estimates, which is what we need to know.

That’s what I mean. There’s no new information in the presentation. I do hope it works out for them. It would be awful for DM to be associated with another case of failed helium well conditions after what happened to him at HE1.

How’s that collapsed well looking over at Hex? Does anyone know the cost and length of delay needed to remedy that?

You will see the same block list RNS accounting for a similar amount following earlier raise in March.

It’s the admission yesterday of a share block raised in the last placement. It’s not new. The total number of shares remains unchanged at 5.9bn, no dilution.

Don’t be silly JC. You need to grasp that half the posters on this board are invested short not long, so they profit when the price goes down (using leveraged spread bets or CFDs). They’re not working for LSE any more than the rampy posters are. People make money in both directions, it’s completely normal.

“Its clear one well produce x amount”

It’s not clear, that’s not how it works. Drilling development wells is not like drilling exploration wells.

Yes, the implication of the brief comment in the RNS suggests they are modelling a larger commercial venture based on 20-30 wells to support the necessary infrastructure (rather than a 6-15 well project like Galactica). The Colorado project is funded and ready to go as soon as permits are approved. The Rukwa project will need a mining licence, planning for new infrastructure and major finance before any drilling starts.

Much easier to raise high risk capital on AIM than in Australia. Will be interesting to see who their Nomad and brokers will be if they get to IPO

Multiple posts before 7.30am and less than six hours sleep between logging off and on, are you going for some kind of endurance record? 🤣

“win-win for who?”

I would have thought both traders and investors would be happy enough. You’ve made some money on your short CFD. Long term investors look like they’re going to make money too. Win-win. The only people losing at the moment are short term rampers, but they’ll probably get their day soon enough.

Mullet - “would have thought we would be keeping rig ready for the extra drilling we require.”

There won’t be any development wells drilled at Rukwa this year. They no longer have an exploration licence and waiting for the mining licences, and then a finance deal, so it’s not likely they’ll be able to drill Rukwa on their own account before next season, mid 2025. The drilling action will be in Colorado. But the rig is certainly available if it’s worth the risk-benefit.

Likely it would be a mix of cash and shares/options (hypothetically). I’m not sure what the access is like between where the rig is parked now and NHE’s drill pad. The Predator isn’t permitted to drive on TZ highways without stripping it down into legal load weights (I think HE1 made their own access road to move it to ITW1). That would have to be factored into cost, along with any risks of getting stuck. Either way, it would be vastly cheaper for NHE than shipping a rig in from Australia, import permit delays, etc. The fact that HE1 have just given up all their exploration licences, no mining licence before the rains, and still have the rig hot stacked is interesting anyway.

“have you flipped?”

Not at all Cat, but I don’t think an ML approval (on its own, without any other context), would move the SP very significantly beyond the placing price at the moment. If the market thought the ML would not be awarded the SP would have collapsed by now and it’s held up quite well so far. Any sniff of partner investment to capitalise on the licence and it will shoot up, but the ML on its own gives them ten years to think about that. I think approval of drilling permits in Colorado, conclusion of that acquisition, and spud will be the next price catalyst. I don’t expect Rukwa news to have much impact before early 2025. I may be wrong.

They expect contractor to mobilise a rig and be onsite in rural Rukwa within 3-4 weeks of approval to issue a contract. The rig must be in country already for that to be possible, whoever is the contractor (and they’re not going to ship a rig around the world for ~150m shallow drill). Any bets? Are they using a water rig like HE1 started out with at Tai? Or are they using HE1’s Predator rig which is hot stacked on the neighbouring plot?

The ML could well be priced in somewhere around the placing price as that’s likely to be a done deal anyway. The commercial value lies more in securing project funders/partners after that. The more immediate uncertainties are around successful conclusion of the Colorado deal (October), pending permit approval, and its speedy implementation (drilling first five development wells). Should be a busy news period for the rest of the year anyway and SP should tick up with each milestone, if/when each is reached. Next fundraise maybe early 2025 on back of that.

Alternatively,

Working capital funded until June 2025

Mining licence by Christmas

Commercial helium production begins early 2025

No more exploration licences left to fund

🤷🏻‍♂️