focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
Approximately 1 billion shares in circulation. Approximately $1 billion per bcf. So each bcf about $1 a share. Potential reserves over 100 bcf.
Debating whether the share price will be 6p next week or 10p is so missing the point of this stock.
Drilling starts in one week and is pretty much derisked up to the point of discovery. I know the bet is somewhat reckless, however so much to like about it.
If there is a successful outcome the BOD will go all out to sell the story .
The Company is currently fully funded, as a result of the fundraise completed in December 2022, for drilling at the Tai-C well in the Rukwa Basin, however any further drilling does require additional funds.
I was surprised but am ok with this.
For heavens sake! If some are betting on a drill failure that’s fine. We’ll know in a few weeks time if they are right. A low share price now doesn’t make them right. Decide for yourself whether you want to go with a success or a failure. It won’t change anything. We’ll know in a few weeks for certain. Some will win and some lose. It’s binary.
The risks of not drilling have all but disappeared. Although there are a couple of things still to complete this week there is nothing to change the inevitability of spudding within 10 to 14 days. It is all visible. This is a huge de-risking from not actually having a rig at all and not know if we were ever going to drill. So let’s recognise that.
The Board have already strongly guided us to no cash raise prior to drilling bar any unexpected events. So it’s pretty clear at such an advanced stage and with the certainties we have that there will not be a fund-raising prior to this planned drilling of Tai.
So now we come to the real acid test when they reach the drill target - is it there or not? We have placed our bets.
Regarding the share price up to a discovery it really shouldn’t matter a jot. If the forecast reserves are discovered though then we know the value of each bcf is around $1bn or £1 per share. Don’t tell me that the SP won’t go up after that…
Hello Happyetc - It was not a casual remark. In fact it’s the main point about this type of investment. I think the biggest migration event was the BP (Muklak?) field in Canada where something like $2billion of investment was lost after all the positive seismic tests etc. So it’s a very serious point. But if this was all cut and dried we would not have the opportunity to make so much money. I am in deep btw so fingers crossed eh?
Long lead items complete next week. Two weeks to spud. We know for certain that helium was in the Tai C enclosure. Has it migrated or leaked? We are about to find out. Our bets are on the nose. Management has at last got its act together and luck is now running with us too. What happens to the SP in the meantime need not concern us. This is now deaths or glory. Sudden death situations are the best but personally am full of anticipation. No getting off this moving train now.
1. I posted a week ago my take on the webinar, which was 4 weeks to spud and 2 for a result i.e discovery or not. Now it’s 3 weeks.
2. The latest news on helium demand is that a new and more effective heat pump has been designed. Helium pumps promise much higher temperatures while retaining the same magical conversion of one unit of electricity into three to four units of heat achieved by standard models today – its “Coefficient of Performance” (CoP).
Norway’s Olvondo Technology is already installing helium heat pumps for dairies, pulp and chemical plants, although once you get to 200 degrees for industrial use the CoP falls to 1.7. The mechanism is based on the Stirling cycle of compressing and expanding gas, invented by a Scottish engineer in 1816.
Helium gives the extra lift. “When you compress helium it gets really hot. It’s non-toxic, non-flammable, and easy to work with. We could use hydrogen but that’s more tricky,” said Olvondo’s Roger Myrvang. Article in yesterday’s Telegraph.
My take on the webinar is that they hope to announce a discovery in 6 weeks time. Four weeks to spud plus two to a result. No cash raise before that. If there is a confirmed discovery I don’t think holders will care much what happens after that. Cash will be easy to find. Until then we just need to sit back and wait. The SP may go down but no need to fret. This is all about a discovery and it’s binary.
Now we are back on track with the denouement in August / September I thought I would share one of my own personal issues. I split my investment pretty much 50:50 between my SIPP and my direct holdings. The SIPP is taxed at 45% and direct is of course cap gain at 20% if I choose not to reinvest immediately. The complication of success would be IHT. I’d really hate to pay more tax on top of that! To get round that I have already transferred some shares to my children at 6p. It’s not too late if you think your going to be rich!
Betkarma you are right on the money. Trying to be clever about the cheapest deal is not HE1’s priority and hasn’t been all along.. Getting a rig is. Noble took all of one month to sign up a rig. They didn’t bother with cost savings with a 3rd party and when they needed to they just got it done.
I have no doubt that the cost sharing deal was proposed by Justin Wood and first DM and then LB were in thrall to this fast talking Oz. Noble didn’t care able the time delay then because they had no money to implement it. Once their funds were in place they stopped messing about. No more faux partnership. Embarrassing.
But it seems to me that LB and co are beyond advice. We know they should get a rig at all costs and not with this constant caveat of doing it cheaply. That is the wrong idea. A successful drill will ensure that there is plenty of cash available after that. But does LB understand yet? Not much sign of that.
The good news from all this crap is that when NHE drill in September with their 100% success record, they will find helium. Then the market may recognise that HE1 probably have helium too. Not actually proactive management though is it?
I am so deeply fed up with this entirely predictable disaster.
Terrible commercial judgement but consistent. They made themselves dependent on Noble hoping Noble would do their work for them. That was never ever a good idea. So we have waited pointlessly for Noble to sort themselves out, raise their cash etc. and now they have shoved off to do their own thing. How utterly stupid!