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“ how long does the CPR take”

How long’s a piece of string? My best guess would be it’ll take as long as it takes to get the Colorado project into production first, and raise the share price. I’m not sure if numbers from a CPR on the existing discovery well as is will add much. They might want to do some appraisal work on it first perhaps. No idea.

Read the AGM transcript in comments below. She did not say this.

No, I don’t think so. She said it was an ‘internal document’ and they were looking into doing an independent CPR on the discovery well, and when that’s done ‘we can potentially put some numbers out to the market’.

Then in the Q&A she repeated that ‘the numbers that fall out of the CPR will obviously be shared’ but no details from study would be released, at least before the award of licence (but no commitment that they would be released then).

The discovery and development wells are all marked on the project website map, if anyone wants to count them

https://www.helium-one.com/projects/galactica-pegasus-project/

The difference between free gas or not free gas isn’t ‘pedantic’, it’s fundamental to the entire commercial prospect! The whole project acquisition is based on there being free gas.

If you look on the Colorado project summary on the company website you can see that the discovery of free gas was a key selling point from the outset.

https://www.helium-one.com/projects/galactica-pegasus-project/

I agree that’s what she appears to say in the video but I think that might be a slip, as I’m pretty sure we were all expecting free gas and that’s what the RNS says?

Yes, it outperformed expectations for flow testing (and on the back of strengthening flow at State-16). All good. I just didn’t understand the suggestion that free gas wasn’t expected, it was, as that’s the whole basis of the discovery.

There isn’t a fall in share price, what are you on about?

I think 1.1p is still the price to beat, lots of offloading every time it’s hit that level recently but it should exhaust in the end.

The Jackson 31 RNS said…

“As expected, no water was encountered during drilling of the Lyons Sandstone with wireline logs confirming that the penetrated Lyons Sandstone Formation is of high-quality and gas saturated.”

Free flowing gas is expected from all of these wells at Galactica, free gas containing a mix of helium in mainly CO2. No water, no artificial stimulation. That’s the attraction.

Don’t be daft, of course it’s a positive update (drilling progressed successfully, approaching final stage). A positive de-risking of the development plan but just as expected, so not of great consequence. No drilling problems and on track to complete three commercial production wells by end of Q1. What’s not to like?

Of course free gas was expected in this field, what are talking about? The bonus was an improving flow rate.

They did not 'withhold' the FS, that's simply not a public document and was never going to be published. What they withheld is their own revised modelling estimate of the recoverable/contingent reserves, following the fractured basement discovery. I think they've been fairly honest that the modelling is complex and innovative (geologically unique) and would require independent validation by a suitable CP (probably a hydrologist) because it doesn't fit industry norms for reserve estimation. They have also stated that there's a confidentiality understanding with the government (although I suspect that's a convenience). Perhaps they could have explained more clearly but I think the implication's the same. It would be risky to publish unorthodox estimates and then have them criticised or revised down against industry norms.

One step at a time, in the first stage I’d be interested in the chances of grossing say $25-30m a year ($1m per well), and maybe netting $10m per year to HE1’s share in the project. That would be a good start in terms of commercial viability. 480km2 is then a lot to play with.

Oops, typo error 🤣

I think these estimates are way off, for the reasons mentioned. We shouldn’t confuse estimates of prospective resource with recoverable/contingent reserves, and we have to be realistic about the extraction and processing rates for helium in fluid versus free gas. Extracting 1bcf helium per day sounds wildly unrealistic. All we have to go on at the moment is a well test indicating potential for up to 6mcf per day with artificial lift (which still needs to be tested/appraised to prove that hypothesis). They might achieve more in the future after learning more about the geology but the first well sounds closer to $1m per year (maybe plus any potential revenue from the gold hydrogen, geothermal energy, or water). On the plus side, that’s still a multimillion dollar income across 30 or more wells with a long lifetime.

You can sell anytime you like. Simply being down isn’t a reason to hold, that would be gambling.

With luck, 9-12 months income from the first 6 wells should fund the next 9, and as each new well is tied in it will accelerate that timeline towards becoming cash positive.