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Proven reserves is what they need to advance discussions with financiers, as the CEO says in the latest interview and the previous interview. Hopefully the appraisal phase achieves that.

Why on earth would MMs be ‘loading up’ when they’re looking at possibly billions of new shares coming at them down the tracks? It makes no sense.

Still too much uncertainty for me at this point. I’d like to hear details of the actual investment path to first production in Colorado - what are we getting for the money and when - number of wells, agreed spec for the production plant, sequence of works, how much helium and CO2, what gross/net return on investment in what timescale.

0.006/0.007 is the spread, it just depends if the day ends on a buy or sell. The SP is so low they have run out of decimal places, which leads to a wide % spread per digit (for a while they were on a 20-25% spread at 0.004/0.005). But they have gone up which is something.

We already know from the EWT that the best optimal flow rate for Itumbula is modelled at 6Mscf/d (similar to State 16), from 20,000bbl of water, if the pump can deliver that. We also know from the CPR that they have a more cautious model based on lower and declining flow rates. The CPR chooses the lower for caution. Presumably, ‘good’ looks like anything better than the CPR and ‘very good’ looks like the company’s estimate?

Yes, I got nervous as soon as they announced the Colorado production was delayed by two quarters, without a clear explanation (the explanation being that they needed more cash). They covered it by saying the processing plant was still at the design stage (possibly true but the site permit was already cleared for install). It now seems as though they delayed because they needed more money so they’ve been a bit economical with the news flow. It’s not a great look but these things happen.

I hope there’s more transparency at the meeting about how exactly the additional Colorado budget is to be spent. They’ve doubled the budget ostensibly to get to first production at the same date (which is already delayed 6 months). She mentioned some overspends, CO2 processing, phase two wells, and developing Pegasus but it was unclear which if any of these items are to be funded from the raise. Hopefully there’s a meeting presentation with some project budget breakdowns.

Yep, companies either raise or die on AIM so it makes sense for a growth company without revenue to play this hand at this time. And there are plenty of venture capital institutions prepared to play along. Whether it makes sense for retail shareholders is a different consideration.

Authority to issue "up to 4,000,000,000 equity shares in the Company (representing approximately two-thirds of the issued share capital)" but the actual proportion of dilution will not be known by the time of the retail participation opportunity, which means retail will be playing their hand in the dark while the institutions can see their cards?

Has anyone checked if these the same list of tenders previously issued by Helium One (Ngozi), now reissued by Songwe Helium as the new operating company, or has the list of services also been modified?

Interesting perspective. Galactica remains a more commercial prospect than Rukwa for the moment (subject to the further appraisal phase). Why would they sell it when they could have an interest in maybe 30 wells there producing a similar daily gas flow at a fraction of recovery cost in Rukwa? For a few years anyway. Wouldn’t the company be worth more in the market with the diversification and surety of Galactica revenue than relying only on the prospective best case (low probability) odds of long term success in Rukwa? I could imagine the possibility of borrowing against Galactica for development once in full production perhaps, if needed. It might well produce enough to fund a decent amount of loan interest. If the Itumbula pump delivers the best modelled flow rate then that’s great news for future scenario planning in Rukwa, but Galactica already has that flow rate without artificial lift, it has the well locations all mapped out, with approved permits, ready to bring to market (pending a processing plant solution). For a small company like HE1, Rukwa is a big and hungry project while a global acquisition strategy for near market projects like Galactica might yield more stable growth for the company perhaps? Personally, I’d probably err towards selling Rukwa (after proving its true value) and buying more projects like Galactica, rather than the other way around. But I guess we have to wait for more information to assess that kind of risk balance.

Let’s hope so. It would be good news if the funds accelerated the 9 additional wells slated for phase two, or expanded the number of wells in phase one. But only if that secures the primary business objective of near term commercial production in 2025, which is already six months later than the last ‘fully funded’ raise promised to deliver (and with no subsequent notifications of any significant delay or overspend). It would be a breach of market rules to have spent the last raise other than advised to market, and the CFO said it was ring fenced at the AGM. So, what happened? Did the expected costs double? Were they underestimated in the due diligence? Are we taking on BNL’s share because they can’t afford it? Is the new combined He/CO2 processing plant going to cost much more? Do they need to drill more infill wells to make that work? They really need to explain in detail at the meeting what this new £4.5m ($6m) is for and why.

Much as I would love to see future institutional investors and smart money coming into the projects (and I do believe we may see that once Colorado is in production and Rukwa successfully appraised), what we have currently are institutional lenders providing a cash advance at 12% interest, repayable within 12 months, which can be called in for shares, at a 20% discount, whenever they choose, with no lock in period. I'm honestly not sure this qualifies as 'investment' or 'conviction'.

I appreciate that they are the share broker and are taking an optimistic view, which I would be keen to see, but it’s very unorthodox to quote P10/3U estimates just because they’re larger. The CPR is giving those numbers a 10% chance (90% odds against). I think that’s conservative but it’s still wrong to present Sproule’s best case scenario as if it was their considered opinion, when they clearly state their opinion that the most likely case is a fraction, at this stage, prior to appraisal.

Sorry, I meant 2C obviously 😊

The CPR gives a 2U estimate of contingent resources for the first ten years of 78,668 Mscf, if proven through appraisal (22,414 from the five EPS wells, and 56,254 from the additional CPF development).

It looks like someone doesn’t know the difference between mmscf and Mscf, or the difference between P10 and P50, or the difference between 2U and 2P. How unfortunate . Did he copy that from the erroneous LinkedIn post that was hastily removed?

I agree the CPR is very conservative in its conclusions but to quote those numbers as if they reflect the CPR is misleading at best.

Notice of meeting and resolution posted to registered shareholders 18 July, so they should pass that on to retail clients shortly where applicable.

Certainly no way of knowing at this point. As a general rule of thumb for AIM, it would be somewhat extraordinary if retail did better from a raise than institutional lenders but you never know.

Beesty - “You do realise existing shareholders get the same deal as the investors in what price they pay for them?”

With respect, no they don’t. They get a retail offer “using the same price structure” not necessarily the same price. The company picks the date for the retail offer and you get the discount on the ten days prior. The investors pick the date for their own share conversions, whenever they want, so they get the discount on the ten days prior to their chosen dates. If they choose a date prior to which the price has dipped then they get 20% less than that dip.