Member Info for deepbluediver

thanks @seisprocessor. always enjoy your posts..

"The top of the Karoo sequence is even more exciting, with thicker sequences of porous reservoir sandstones overlain by even thicker sections of shales and acting as effective seals in the target 2 zone."

exciting times!

Dai,
short answer is yes, with risked built in on a discounted CF on where they are currently, over the bbls certified in the ground. in its most simplest form, its a risked NAV at this moment of time divided by bbls of oil certified in the ground. (2C in this case). bear in mind it can go up and down, away from calculated values depending on what the buyer is willing to pay (sentiment, competition etc). Ive seen my peers pay $30/bbls for oil in the ground in the North Sea for a damp squib during the heady days of $100 oil, mad days.

For producing assets, a simple KPI to use for valuation is $20k-$30k per flowing bbls.

FlySealSE
thanks for that, I haven't had time to read their docs as a bit busy with island planning today. from your posts, sounds like they are looking to farm into He licenses around the world, "to assists ... and accelerating their extraction programs".

likely they are looking at farming in post discoveries and join in during appraisal / development. safe entry point but lower rewards to exploration.

Players in the space: American Helium (TSX-V: AHE) (OTC: AHELF), Gran Tierra Energy Inc. (NYSE: GTE), Yuma Energy Inc. (NYSE: YUMA), Ring Energy Inc. (NYSE: REI), and Energy Fuels Inc. (NYSE: UUUU), Royal Helium (TSX: RHC) and the mighty Helium One!

Harp
why 50% dilution, or is just an example.... ?

Dai
Just read your first post on this matter:

value in the ground are roughly how we value oil reserves pre production and $12.2/bbl quoted fits within the M&A range in recent years; they have different values depending on many parameters such as where they are in the project cycle, oi; price deck, nature of bbls (have they been sold and lifted before?), quality of oil, offtake options, development cost, opex etc. These are put together using a detailed risked DCF to arrive at a fair market value hence the valuation for $/bbl in the ground.
Roughly, post appraisal, expect anything from $7-$17/bbl valuation range based on the last 10 year averages - I keep M&A stats of most worthwhile deals that I can get my hands on (more than most city banks can muster). Although Buffalo field is planning an appraisal in Q4, the fact that the oil has been lifted and sold to market prior by the previous operator, allows those level valuation.

dont know but the He basin is large in Rukwa and likely more to open. I don't think there will be any issues, using the logic of North Sea when the basin was found to contain oil. plenty for all, likely.

@joshwaa
Pressure pressure )

The CPR critique i did on the bb was meant to share my thoughts on the Buffalo project
1. Technically i feel comfortable they will beat market expectation for appraisal, hands down
2. I raised the issue of CO2 content - future risk to share, i reckon there will be some mark up on*development costs, and likely they will face operational issues,
3. I raised rig contract and pricing but that is on the way *current risk

Item 1 and 2 hopefully gives you a clue when i plan to exit and the multiple i hope to get. 6 months cash cycle. :) unless they announce a new M& A deal that is ... all good fun to watch.

Please dyor

Noob
Love her videos, they are all very funny.

Dai
Yes, we are camping there for a bit.

ST
why sorry? you didn't cause the drop and everyone makes their own decision therefore we should own up to the outcome.
on AVCT, its the only red on my portfolio but noise at £1k paper loss, nothing compared to the roller coaster I had on US stocks during the "cycles of yield scare" (remember?), 5 digit paper losses on most shares took some ballsy positioning, a whole load of cash to dilute and very tight management to break out and get back to profit. Its the name of the game.... some things we control, most we don't.

indeed SGF....

Separately, in my last post yesterday, I perhaps should also add that in reality most of us here who had taken time to read the prospectus and / or listen to DM's few interviews will have realised, absorbed and either be content with, or managing the investment against the risk in the way they feel comfortable.
DM from the get go was open to say that seal is the biggest risk so it shouldn't be a surprise to anyone. (note, seismic work identifies structures that can act as trap and seal and only the drill bit can confirm that).

Blubay
good note (share). thanks.
I usually stick to NAV as I have trouble with P/E (expectation) and valuing sentiment. NAV on its own is a bit more dry and helps me to be very conservative, maybe that's my own background and obviously it can be a limitation on my end. Risked DCF is and has been my bread and butter.
Anecdotally (nothing to do with HE1), I recall having a good debate with my investment banker on Tesla valuation not that long ago. He invested, I did not. the rest is history. and we are still good friends :)

gents
Just to add to HP's valuation, link here: http://www.helium-one.com/wp-content/uploads/2021/06/21-06-23-Hannam.pdf
There are three parameters to vary according to find (or expected find / discoveries);
1. He concentration (as most posters have alluded to)
2. Volume of find / discovery - see page 6 of the link shared. they, HP, have considered only 19.9 BCF net to arrive at their valuation
3. He price - this is covered by HP together with discount rate used (table on Page 6).

If we find higher concentrations of He or higher volumes than has been considered by HP's valuation, then the numbers are up.

I prefer to use "netback" as a simple benchmarking and sensitivity tool against the potential changes in parameters (as its simplest) rather than the reddit link shared ... you can also apply the netback assumption to extrapolate value for non Rukwa licenses. just be careful with assuming 100% valuation on commodity still in the ground, risked it accordingly with time (milestones achieved).

the other alternative, which I used personally is to built a full blown discounted cashflow model.

please DYOR

Enjoyed reading your thoughts Glib.

Ah, Thanks chaps.

just to repost again so there is no ambiguity: http://www.helium-one.com/wp-content/uploads/2021/06/21-06-23-Hannam.pdf

Tai risked - 4p, unrisked 31p
Mbumi risked - 6p, unrisked 37p
Itumbula risked 5p, unrisked 29p
Kasuku risked 7p, unrisked 28p
+3p (from various)

The valuation range should be 21p - 52p according to HP's valuation for Tai drill period based on 4% He concentration .

Is Tai be all and end all? lets look again at the sp valuation from HP above.

If Tai fails with all 3 targets:
Based on HP valuation, sp should be at or around 21p if all 3 Tai targets are dusters e.g (6p+5p+7p+3p) for the remaining risked targets in Rukwa. The range then is 21- 97p, the higher end gives you the potential if the next targets are a success.

If we hit just one target at Tai: sp =52p (31p + 6p+5p+7p+3p) e.g Tai unrisked and the rest risked. range then is 52p-128p.

and you call build the sp estimates from the HP table for any scenario you can think of which I found helpful. Obviously sentiments not included so give or take a few pence top and bottom.

Basin contains He (confirmed) so there is no ambiguity, but where is it reservoired? We have 9 targets +1 contingency well to help us answer that. Will we hit it? i think we have a good chance based on fundamentals (science bit that is) but until the drill bit hits it, it hasn't hit it. I would have prefered 3D seismic but lets park that. (Seisprocessor is better on the subject than me so I follow the knowledge)

so dice it, and risk it as you please, its your own money. Just remember its a marathon pace. :) If you dont like HP's table, do your own valuation, I did mine.

Please please DYOR

those barrels underground has been lifted, and sold to market. There is a good reason the CoS is similar to 1P CoS.

ive made money following SGF on FAR. So I am sticking with his thesis... in fact, topping up today )

Morning SGF,
I had to explain to my in laws over the weekend who have zero technical knowledge but who has a much bigger volume of HE1 share than me, and wanting "answers"(annoying, they were very busy between 12-21p). it forced me to look at the whole thing again hence the flush feeling this am.

I did put two risks to balance my view in my previous post :)

Back to basics : (a poster send it some time ago - SOil gas geochemistry survey, Figure 5.1 Source Helium One)
The theory goes that any Helium microseepage in the overbuden (shallower zones) directly above a mapped closure is evidence of effective seep and trap. Therefore I expect the following:
1. following He shows at 70m, we should see a trend either increasing He concentration as we drill closer to the target or a flat He show. It would not give us "no He show" down to target once we find He shows in the background so shallow.
2. At 400m, if the He is reservoired (trapped and sealed), the mud should show a spike in He concentration. if no spike is seen, therefore its not trapped or sealed properly. which is fine, as the source of these He background concentration is proof that there is a reservoired He in the deeper section. Or if it does spike, perhaps no reason to stop drill, he is hunting for bigger volume and higher concentration further down.

Therefore, based on theory and behaviour of the drilling program now, I suspect DM is betting big down at Karoo.

Bamb raised an important message which I mentioned sometime ago (pre drill) and perhaps missed in terms of big story - Helium One has discovered a He basin in Rukwa based on the announced He shows. its now trying to figure out where the h$£l is the He being reservoired.. 3+1 holes planned drills and we are not even there yet with drill 1. Its down there, somewhere.
Be patient guys, this set of drill is bigger than most of us are envisaging or think, and warrants a front page news on every worthwhile news merchant if we hit the motherlode. .

@shareinvestment
Not finished yet but in progress, got sidetracked with something else.

Thanks Skittish. Really enjoy your investigative work. Keep it coming