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Yes, I'd guess the latest big tranche has been worked through now. With any luck that could account for more than £2m and see half the debt now washed clean on conversion. By holding off for the past couple of days the VWAP should step down fairly suddenly now as the higher price days from end August roll out of the ten day window. It was stabilising around 0.3p but if we finish today around this price then it will have dropped around 0.28p tomorrow, which should bring all those recent blocks sold at 0.3p into profit (c. £230k profit per 100m shares, which is roughly what I think they've been managing per day). Or they could just choose to push on deeper after a pause.

Marex will certainly try to avoid being left holding the bags when the music stops. They’ll monitor their inventory to ensure they’re moving enough shares in the market before feeding the next round. If the price falls too rapidly the proliferation of shares starts to become unmanageable. Stabilising the price optics also helps to encourage new buyer liquidity.

The debt funds don’t hold shares, and their fund rules probably prohibit holding AIM shares anyway. Their role is just to monetize capital events for profit in a timely way with minimal risk. A fund may borrow shares from the broker/MM and sells them into the market, the CLN holder then converts sufficient debt to return shares to the broker and cover the deal with profit.

VWAP is all that counts for the moment.

The UT gives the impression that the daily price is bottoming but if you look across the whole day the VWAP continued to drop a little, bring the available conversion price closer to 0.3p

Sorry no, I just meant they gave us ball park estimate for the capex at the AGM, after the engineer studies for the feasibility study and noting it was cheaper than expected.

It's certainly theoretically possible. The challenge is how to do it at scale and to make a profit while doing it. The process stages require the water removal first, then deoxygenation and membrane separation, before the helium pressure swing absorption stage, compressing the helium gas, and filling up the tanker truck for the long drive to DES. The early stage production model suggests first building capacity to handle 100,000 barrels of water a day (20,000 barrels from five wells), with a daily gas processing capacity of 500 Mscf, in order to extract somewhere in the region of 25-30 Mscf helium (you could do the maths on gross revenue assumptions perhaps and hazard some guesses about potential opex and capex).

The German scientists are in field trials, although not at commercial scale, but also targeting a geothermal power plant approach.

Yes Stockwell, the Sinopec commercial pilot project is the one to watch. They've been running helium extraction as a byproduct from their geothermal power plan over the summer non-heating season (and using the same dual technology combination that HE1 propose). Hopefully they'll report on how successful that's been in the coming months.

I would say you are wrong Stamford, although I think it's fair also to say there was some economy in presentation. But just to pick over this. No-one has speculated about 138bcf for years, apart from on this board and in some outdated media articles, that's from prospective guesstimates before drilling Tai. On the water, the CEO was very clear in interviews when talking about artificial lift that the fractured basement play was always a geothermal fluid play (that was the whole point of it). At the same time, they are still prospecting for potential free gas reservoirs at intermediate levels, so we can't rule that out. But anyway, we knew the flow estimates directly from the EWT results at ITW1, which were reported immediately end of August last year (that's why the SP dropped then). The only thing the CPR changed was the confidence level in that best case scenario unless/until proven through appraisal. It was always clear that a well like ITW1 'might' (if proven) produce roughly the same amount of helium as a well like State-16 in Colorado, but with higher extraction, processing and transport costs (and therefore lower profit margin). What they were perhaps economical in explaining from the outset was that the 'novel' element of the play also relies on the fact that no-one else had done it because the processing plant technology was not wholly proven at commercial scale (although the Chinese may be doing it since then, but in context of a commercial geothermal energy plant). They did hint fairly strongly at the challenges and looking at different developments around the world, but they also commissioned a proper study and provided outline costings and design drawings. I don't think they actively hid any of this, but you would just need to be aware of it.

Sure, directors have a responsibility to manage the company in the long term interest of the shareholders (the enlightened shareholder perspective) but if the choice is between growing the business on unfavourable short term finance terms or ceasing to trade then that implies only one choice really.

I think the approach of the CLN holders suggests a much more aggressive conversion than that. At this rate I wouldn’t be surprised if they clean the slate before the Q4 operations commence.

Toffers - the board are managing a pre-revenue helium exploration company not managing your share portfolio. You are responsible for your own investment decisions as long as the company has provided price relevant information to the market in a timely manner, which they appear to have done on this occasion.

There was a shareholder meeting a month ago, and a vote. Shareholders voted for the CLN agreement and for board authority to issue billions of shares

The opposition is barred so I don’t think the result is in much doubt.

The proposal was for the CLN agreement, which was voted at the shareholder meeting. In the event of a no vote they had already announced the default would be a cash box structure. That would have been a one off event, although we don’t know at what discount. Either way, we can be fairly sure short term debt funds are not interested in shares. They need to monetise their return and exit with minimal risk. If they took all the shares in one go they would still feed them back to the market. You can only build an orderly share equity dilution if there are buyers for the shares. It appears the broker was unable to build that book.

It might turn out that way for those taking the gamble at 0.25p but you’re still taking the gamble at 0.9p. That’s the part that’s harder to understand.

I think it would be unusual to stack up the next conversion tranche for much longer. The primary objective for the CLN debt holders is to convert, monetise and exit and the broker will also have a view on the size of tranches they’re prepared to lend/absorb at each stage. But we’ll see.

Hard to predict how the CLN holders and brokers will play the remainder of the debt conversion. So far it looks like an aggressive short term conversion, and more aggressive than the norm. My gut feeling is that they're just going to push this through as fast as the market will take it. On the plus side, the faster they do that the more protective the ten day VWAP is. If the third tranche comes in as large as it looks then it could be 700m shares around 0.3p this week, leaving another £5m to convert. If they remain aggressive then they might even clear that overhang before planned Q4 operations begin. But that means selling maybe 2bn+ shares in 3-4 weeks, at 100m shares a day, downwards from 0.3p. Once the VWAP catches up over ten days it could result in final conversion prices of 0.25p or lower (unless block buyers/affiliates absorb stock off-market at pre-agreed levels above market price, as they appear to have done in early tranches). Way too many unknowns to make any predictions but they won't want to kill the SP off altogether, otherwise they just won't manage to digest the number of shares required to complete the final tranche conversions. Really just a wild guess at this point but 0.18–0.22p still feels like a bit of a theoretical floor and it might not get near that if there's enough demand liquidity around 0.25p.

I think that's very hard to say as some of the very large negotiated cross trades above market price would book huge paper profits that aren't real (e.g. using affiliate equity funds to stabilise price optics and internal accounting). I don't think 20-30% is out of the ball park though on the £10m cash advance.