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The CPR is prepared on the basis that "statistically there is a greater than 90% chance of exceeding the Total 1C and less than a 10% chance of exceeding the Total 3C", so the 2C is given a nominal 50% chance of success, subject to the development contingencies outlined. A lot hangs on the probabilities attached to the water production rate and gas water ratio, which hopefully the ESP appraisal will help to answer.

"Maybe BB and perhaps also a discussion of a JV with Sinopec too?"

The HE1 development plan for Rukwa does propose to use a very similar combination of processing to the Sinopec pilot plant in Xianyang (the first plant in the world that is attempting to commercially extract helium from geothermal fluids), so they would be an obvious source of learning and knowledge transfer, if they're willing to share their technical appraisal and first season results (which are not yet public). It really depends how that pilot plant performs. The key point is that Sinopec are bolting on the helium extraction to an already commercially viable geothermal energy plant, to see if it will yield a potentially lucrative byproduct during the summer non-heating season. It's not clear if HE1 are considering a geothermal energy model in Songwe (which definitely has some potential to support warm greenhouse farming projects, if not for electricity generation, and the same hot spring faults are exactly the ones HE1 are targeting). The water might not be as warm as in Xianyang but the Tanzania Geothermal Development Company (TGDC) is actively exploring Songwe as one of its strategic projects. Highly speculative but interesting to consider.

CenerTech is an obvious provider of ESPs for a project in East Africa, possibly water management and clean energy tech but they're focused more on wind and solar power.

Louise82 is Punter1234, OfficeCat, etc etc, had more account names removed and reincarnated than Budha

Interesting that staff travelled all the way to China to look at an electrical submersible pump. I wonder what else was on the itinerary, perhaps a visit to Sinopec’s commercial pilot plant for extracting helium from geothermal fluids? 🤔

The conversion is a conversion of debt notes into shares of relative value. The RNS details of the amount to be converted, the number of shares, and the anticipated date of their admission. The shares don’t exist until they are issued. The prior notice triggers the formula for calculating it but the actual conversion of debt into new shares cannot happen until the end date. However, market actors might well trade on shares of similar value in anticipation of new shares being issued.

The RNS comes after the notice of conversion is served, and the company has made an application for the admission of new shares, but before those new shares are issued to the CLN holder and into the market. But in all likelihood, the notice of conversion that precedes the RNS is only served after a corresponding value of shares has already been forward sold into the market. So, for the CLN holder, the monetisation of the debt conversion has already been covered before the RNS but for the market the dilutive shares only land after the RNS. Probably.

Without going too much over the market and the science, helium was primarily extracted as a byproduct of oil and gas production. Conventional wisdom was that helium could not accumulate in reserves without hydrocarbons. Dispersed surface seeps are of no use on a commercial basis, there has to be a reservoir to tap or another route to gas. Neither NHE or HE1 had much luck finding shallow trap reservoirs in Rukwa (although they continue to look) but the discovery is based on a novel prospect, extracting helium from geothermal fluids transporting helium from basement. That hasn't been done at commercial scale and the tech to do it is only still at trial stage now, so it's a punt albeit an increasingly well informed one. HE1 is a small cap early stage AIM company taking a risk in capital markets on a bright idea, it's not Exxon. To balance that, they have a commercially confident project in an established market in the USA. Seems a decently diversified strategy.

That's a bit disingenuous Offler. It really wasn't until the Oxford University group did survey and research on it that the anecdotal seepage evidence gained any commercial traction. HE1 was founded on that research basis in 2015 and did ten years of exploration work before applying for the mining licence. And yes there are other helium prospecting companies in the region, NHE is literally next door.

I think the flip is relevant as it effectively freezes the conversion price floor for the next week (due to the two remaining low days at 0.29p on 10-11 September), unless we get a few days above 0.35p

Today's update, and we've just flipped over again between the two CLN formula methods. The lowest day now appears higher than the discounted average of ten days. Not sure if that prompts a natural decision point.

Lowest daily VWAP 0.29p

Average of 10 daily VWAPs 0.31073

92.5% of Average 0.28742525

Higher of lowest day versus 92.5% Avg 0.29p

Conversion Price (80%) 0.232p

"1. do you really think conversions only occur after an RNS drops?"

The CLN holder delivers a conversion notice and the company issues an RNS at the earliest opportunity. The RNS gives the future date and price of the conversion. The conversion then takes place when the new shares are issued, after the RNS.

Yes, after today would be an opportune time to convert if they're ready to do so as the VWAP levels out, although there's still scope to wait if they want to.

And you think this buyer is holding those shares and not distributing them back to the market?

Thanks for the reply and hypothesis. So you think these are placements of shares with a very large buyer? Interesting.

Should we assume you have no explanation or that you need to consult before replying?

Interesting, so you think they're going to clear most (more than £3.6m) if not all (£7.25m) of the remaining debt in the next tranche? What makes you think that?

I have no idea what is exposed. As you know, I'm not interested in buying shares at any price until the CLN overhang has been cleared or until there's significant news to outweigh that price risk. I'm interested in trying to understand how and when the CLNs are likely to be converted, that's it really for the moment. I'm not suggesting any foul play and I do agree that formally loaning shares is not essential to the scenario, but I am interested in your superior knowledge and experience of CLNs, so far as explaining how you view the above market large blocks traded on 20 August (0.68p when trading at 0.56p) and 4 September (0.59p when trading c. 0.41p). Who do you believe overpaid for these hundreds of millions of shares during a falling price trend, without having any impact on that price trend? Interested in all theories.

And what carve outs are those exactly? Just to reiterate, the 'investors' (i.e. the CLN holders / short term debt funds) are not the ones shorting the stock. That's the point.

"I was told the CLN deal specifically mentioned that they must NOT short the stock."

How very reassuring. Was this the same boozy lunch advice on which you advised everyone here that the CLN holders could not possibly sell down from 0.6p, and that anyone here who suggested otherwise did not understand how markets work?

The above market negotiated cross trades are clear to see on two occasions now. They actually do the opposite of shorting by making the price optics and the moving averages look better. There are various scenarios but, just for example, let's say the broker knows the CLN holder has sufficient debt security to cover a significant block of shares (let's say £2m worth) so they are happy to lend them those shares against future convert shares at the end of the month, whether the price goes up or down. The CLN holder also commits not to short those shares. Instead they sell them for an above market consideration. The broker books a negotiated block trade from the CLN holder (short term debt fund) to an affiliate/associate (equity fund). Far from shorting, this has the opposite effect on market price optics, very generous of them, and the short term debt fund also books a fast and healthy paper profit. The equity fund has overpaid for the shares but if they're part of the same financial group then the paper loss is an internal accounting imbalance that can be smoothed out later. The equity fund drips the shares back into the market, trades them, holds them against a future news driven price rise, or places them with an arranged buyer (depending on your preferred hypothesis). Once sufficient shares have been distributed the debt fund then calls a conversion and receives enough newly issued shares to cover the broker, plus a large bonus of extra shares resulting from the price drop (e.g. the original 300m shares are now 700-800m shares). Those shares also need to be distributed, or they can be used to cover additional shares that the equity fund borrowed/accumulated to forward sell alongside the crossed block (and that margin of extra shares can reconcile the initial accounting imbalance of overpayment). It's not the only scenario, just a hypothetical illustration.

The predictive (guess) part of the thread was speculating on the timing and amount of next CLN conversion. It's been quite a long time coming. No-one knows except the holders but I think the gist was that the debt holders may be sitting on proceeds of £2m or more in forward traded stock, and by waiting until today (or after close today) they would optimise their discount price to cover due to the ten day conversion formula (somewhere slightly above 0.23p). My guess is the broker or affiliated fund has been working an amount of debt booked initially as negotiated cross trade of blocks above market price on 4 September (more than £2m booked at 0.58p when the market was trading at 0.4p). That would echo the pattern of previous conversion. But just a guess.