Member Info for CuriousCat9

Hi StockMaiden

Hex’s most recent RNS states a prospective helium sale price of $500/Mcf.

Regarding the SP and keeping in mind that HEX's portfolio comprises two assets, one much smaller in scale than the other, Hannam&Partners released a research note earlier this month which suggested an unrisked valuation for the company of 183p (versus a risked valuation of 34p). This estimate took no account however of the potential for hydrogen in Flathead which IF commercial could quite realistically add another 100-300p given that it would be the first commercial deposit of its kind in North America.

I think however we can safely ignore the £10 forecasts for the moment. This figure started being bandied around on here shortly after HEX was covered on the Sunday Roast podcast at the beginning of September, but what Charles Archer the analyst presenting the HEX segment actually said was '...if successful £2 might be possible’.

My quick back of the envelope calculation when I first saw the RNS this morning suggested the helium concentration in Amsden is in the region of 0.13%. This is a long way from being commercial and a marked contrast with Bo’s comment in the investor presentation that ‘…the magnitude of the helium shows in the Amsden and Charles formations were so high that we would anticipate certainly something in the very commercial range’. If the seal over the Flathead is such as to have prevented helium migration up to Amsden moreover as seems to be implied in today’s RNS then that doesn't bode well for Charles.

Given the bigger picture however remains substantially unchanged following today’s disappointing RNS – Flathead is the big glittering prize backstopped by Rudyard – it seems much of today’s fall must be attributed to a loss of confidence in DM and BS. Specifically, DM’s comments during last week’s interview and the Teams meeting that followed together with the company’s subsequent Twitter updates significantly raised expectations (including my own) that Amsden would be commercial and this has undoubtedly undermined credibility. BS should have addressed this directly in this afternoon’s Proactive interview in my opinion, but hopefully management will reflect and organise another investor presentation in the brief lull while we await results from Rudyard.

Once the dust settles however I would expect the SP to start clawing its way back towards the 20s as the next tranche of news from Rudyard approaches as ultimately unless you believe we really are being actively deceived by HEX and that BS has actually spent the last couple of days wandering around the Louvre with an ice cream, then the key details regarding Rudyard and Flathead must surely remain compelling, the former an apparently very low risk play in which flow and He concentrations have already been confirmed, the latter notable for standout readings for both hydrogen and helium, promising gas pressures and porosity, unexpected interval thickness and the fact that it has already been successfully commercially exploited elsewhere (unlike Charles and Amsden). Risks have certainly increased today but the potential remains outsized.

We'll find out definitively soon enough, but for those not in the Teams meeting with DM on Tuesday afternoon he said that he anticipates the helium concentration in the Amsden formation will be similar to the concentration recorded in Flathead as 'it's all part of the same helium system'.

My reception kept going in and out so I may have missed some crucial bits but my impression further was that getting Charles and Flathead to flow should just be a formality given the gas pressures and quality of the reservoir rock - a question of dissolving the heavy mud used for re-entry.

I personally topped up shortly after anyway as it seems to me that HEX is about to transform from an 'if' share to a 'when' for both helium and hydrogen but the market hasn't yet caught up.

I was having reception issues so missed some bits early on, but I thought it noteworthy that he said he anticipated helium concentrations in Amsden would approximate those already confirmed in Flathead, i.e. 2.48%.

I think it likely that HEX will have sampled and tested gas from the Amsden perforations on site already, so part of the reason for DM's enormous positivity may be that he knows the formation will be commercial.

Who knows what's happening behind the scenes but buys currently double sells.

Thanks Andy!

One could argue the formation gas sample is the most relevant of the two as aside from anything else I understand drill bit metamorphism can create artefactual hydrogen mud-logging spikes, but not having a continuous flow of gas to sample must presumably be the significant factor here. Perhaps they released and sampled a tiny pocket of gas which is not representative of gas compositions in the formation overall... perhaps hydrogen concentrations in the first part of the perforation gas were markedly different from those at the tail end. Hopefully today's interview will provide a little more food for speculation.

Morning Andy

Do you know why we have such a difference between the hydrogen readings in the drill mud and the well sample (55.2 vs 0.7)?

I don’t personally buy the delay at the lab hypothesis. I’m a vet not a geologist, but when I send a sample to an external lab. and excluding a few things like cultures or not-urgent histology, I would expect to have the results very quickly. Obviously medical tests can be extremely time sensitive but I believe at least some of the labs we use also provide testing services to clients in other industries and I can’t imagine their turnaround times would be radically different given it would presumably be the same technicians using mostly the same equipment.

For what it’s worth (and probably not very much in my case), I think there are only really 3 possible scenarios to explain the lack of a gas composition RNS for Flathead given perforations began the week beginning November 4th:

- It’s not the way I originally read it I must admit, but I think on rereading the statement in the 24th October RNS the wording is sufficiently ambiguous to not in fact preclude the possibility of HEX releasing gas composition results until after all horizons have been perforated. If this is the case then there is no delay.

- Flathead (and perhaps also now Charles) didn’t flow/wireline didn’t identify any areas of sufficient gas response for perforation and HEX have therefore moved up to the higher formations without notifying the market. The fact that HEX opted not to continue drilling to the Pre-Cambrian or indeed case till total depth and the peak hydrogen concentration from the original drill has not been restated higher subsequently could perhaps suggest the hydrogen or helium in the mudlogging began to drop precipitously beyond the depth reached by the original drill.

- HEX have decided to change their planned RNS timetable due to the date of the hydrogen conference. Specifically, if the Flathead EWT is not likely to be finished until after the conference and an interim RNS released on the eve of the conference detailing the results of the EWT so far could look a bit contrived, one can see why HEX might have opted to postpone releasing the first gas composition results for Flathead until they're also in a position to be able to present meaningful information about flows, depletion curves etc at the same time.

'...we'll hope to have some good results here on both here soon'

Slightly jumbled words but I understand that to mean he expects to be returning for another interview after the coming Ingomar RNS... no director goes on Proactive to amplify bad news!

Proactive interview from the 30th October.

https://www.youtube.com/watch?v=aagYFAXvMaQ&t=3s

In his most recent interview DM said perforations would commence in the week beginning 4th November which matches Ezhik's suggested timeline.

Given the date of the hydrogen conference and its importance in raising the company’s profile, the directors might in any case see it as advantageous to delay the announcement of gas compositions until they also have some meaningful initial data from the EWT to report to the market at the same time as otherwise they wouldn’t really have another opportunity to release an RNS about Ingomar until after the EWT had finished which would be after the conference.

Fingers crossed for the 4th scenario obviously, but could there not also be a 5th: the initial results from the Flathead were not positive so they've moved up to the next formation without reporting anything to the market?? I think the X update regarding the hydrogen conference together with BS's updates on LinkedIn over the weekend makes this unlikely now, but the wording of the last RNS arguably still leaves open the possibility:

'If initial results of a perforation are positive the Company will report gas composition to the market and perform an extended well test on the interval before moving on to the next horizon'

Doesn't follow on in any way from my post below, but just read that the OakBloke might be doing a write-up on EEE shortly. I don't always agree with his conclusions but can't fault the thoroughness of his research.

Apologies, only got about 250k shares here so don’t follow EEE too closely and only a very infrequent visitor to this BB, but has SB given any indication recently as to how far away we are from an announcement on the processing route for the anatase-rich weathered cap as this would seem to be a make or break moment for the company?

I wasn’t personally sufficiently convinced by the titanite reserves to invest when I first looked at EEE (not least because of the company’s history), but changed my mind after news of the deep, high-purity anatase-rich zone above emerged. At the time however I assumed EEE would not only be quite quickly in a position to be able to at least confirm whether or not this anatase-rich material is amenable to standard chemical processes in the lab but would also be keen to share this information with the market in some way even if the choice of process and its optimisation and economics at scale would likely take a lot longer to finalise... but evidently the chemistry is a lot more complicated than I'd imagined!

Excellent post Andy. I see things similarly!

Https://audioboom.com/posts/8563669-sunday-roast-featuring-rick-rule-investor-speculator-founder-ceo-of-rule-investment-media-i

Sunday Roast podcast 1st September. HEX discussed from 1h15m.

No it didn't. What was actually said on the Sunday Roast podcast was '...if successful £2 might be possible'.

At 19p I suspect it was more likely a sell than a buy, but either way would have expecting an obvious SP response to such a large order which makes me wonder whether HEX have instead done another deal??

Perhaps the rig team are so confident they've offered to take part of their payment in the form of shares as happened at MDH... that would be good!

I think the general rule of thumb with AIM miners is that the SP has two peaks, one at the end of the speculation/exploration stage and another one towards the end of the development stage, but in the interim the SP usually gets battered and LTHs are rewarded for their patience with repeated raises. Also, assuming the company ever makes it into production the development stage invariably takes a lot longer than most people anticipate!

The appearance of Caner on the scene raised the prospect of PXC being able to chart a slightly different course, but all looking a bit iffy until the next drawdown is confirmed.