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Into the dusty bin you go Yana/Lee.
I welcome opposing views/negative opinions but I haven't got the time or energy for games.
I'll be waiting for the EWT result and potential stimulation of the well Lee/Yana. Everything else is noise. It's small cap exploration, what do you expect here? Lloyds or British American Tobacco?
Are you Yana in disguise Lee?
It's always helpful to look at the chart objectively when making trading decisions. There seems to be decent support at the 1.2p level, especially when you consider the support is backed by volume. This suggests buyers are interested at that price and i wasn't surprised to see the share price bounce hard today. All this chitter chatter about raising funds, they've just raised 4.7m. It's very possible Helium one could manage the onshore EWT without a raise. Of course, we'll need to wait for more information to get a clearer picture but don't count your chickens on a raise before the EWT if you're hoping to get in sub 1p as it may not happen.
I've come into information regarding a large volume of short positions opening over the past few days. I think this explains the frantic negative posting here.
The facts as I see them moving forwards:
Success - Strong EWT results and successful stimulation could lead to commercial production, potentially with a joint venture partner to share costs and expertise.
Modest Success: -They might find enough helium for smaller-scale production, making the project less attractive than initially hoped, but still potentially profitable.
Disappointment - If the EWT is discouraging and stimulation doesn't improve things, the project might hit the rocks, with significant dilution and more drilling required.
Helium 1 remains a higher-risk, higher-potential play. The upcoming extended well test is a major turning point that will greatly reduce uncertainty and provide a solid basis for future decisions whether buying or selling.
The Hot Copper post from this morning made a good point regarding basement reservoirs being complex. The extended well test will provide much more data on how this specific reservoir behaves and whether there's enough natural fracturing for a consistent flow. The EWT will define the approach if stimulation is to be be used and I think there's a good chance stimulation techniques could improve flow at Itumbula. Let's wait for the test results before making definitive statements about the project's potential.
This initial hype hasn't lived up to expectation for sure but this could change, very quickly, with the EWT results and subsequent way forward.
Hi Lee,
I think this discovery is significant, finding helium with a commercially relevant concentration is a major accomplishment in itself, especially in a new geological setting. It takes a while to go from discovery to a fully operational production facility. The information gathered through their drilling and testing has value, even if not yet translated into production. It will inform further decisions, such as the mentioned appraisal drilling and potentially attracts off-take/JV partners.
There's lot of positives here, if they can do the EWT without a raise, I'll be very happy.
Hi Ghia,
This one might need rough-neck Jo's expertise! It depends on Helium One's testing plans. My gut says maybe they won't need a rig and could manage with surface equipment and specialised valves.
Jo! Where are you? Probably waxing lyrical in his Telegram group, eh? 😉
Hi Wolfie,
You're absolutely right – we don't know the exact cost of the EWT. It could be less expensive than some assume. If the extended well test is fully covered by the current working capital, it increases the likelihood of Helium one waiting for those results before a major fundraising effort. A positive EWT result, would likely boost the share price, further mitigating the impact of any future fundraising. While not a guarantee of complete funding, Helium one sourcing parts for the extended well test is a good sign.
For future drilling or appraisal wells then a raise is a given but at what price, all we can do is take a position or go fishing.
Hi Simon,
The share price may experience a lull, maybe it will go to 1.2p or maybe it won't. Helium One could surprise us with announcements about their plans for artificial lift, detailing their strategy to boost production. We might even hear about a potential appraisal well if they're confident about expanding the discovery. And let's not forget the possibility of a partnership or offtake agreement, which would be a massive vote of confidence in the project.
Stay positive!!! I am.
If HE1 has the funds for the EWT and other overheads, I'd expect them to wait for the results. If HE1 doesn't have the funds, then they'll raise, it may not be a big raise. Impossible to say unless you're on the inside or you know what their daily cash burn is and how much an EWT will cost.
Good points Wolf -
To be or not to be. There can only be two outcomes for any raise and the EWT
Scenario 1: Raise Before EWT - If the Extended Well Test is complex and costly , they might need additional funds sooner rather than later.
Scenario 2: Wait for EWT Results - The £4.7 million might cover initial EWT expenses, giving HE1 flexibility to wait and see what the data reveals. If the EWT shows stable or improved flow rates and favorable reservoir behavior, Helium One could negotiate better fundraising terms with less dilution.
It comes down to whether HE1 have the cash for the EWT and how confident HE1 are in the EWT results.
ATB holders and potential holders.
Spot on ASI, another big question is, how much helium is down in the ground and can flow rates be maintained or increased overtime.
Wolfly - you're right that fundraising is a key challenge for companies like Helium One. However, I think it's too early to assume a heavily discounted placing is the only path. The EWT results could significantly impact their options. A strong showing might lessen the need for a massive raise or attract funding on better terms. Will funds be required before the EWT? it is definitely possible if the EWT cost and expenses exceed the recent funds raised. We just don't know, go with your gut instinct buddy, that's all we can do.
Lee, you raise some valid concerns. It's hard to definitively say whether Lorna's downbeat tone was solely due to market reaction or disappointment with the 0.5 mmscfd flow rate. It's likely a combination of both.
Here's where things get tricky:
Early Stage Data: The initial 0.5 mmscfd is just one data point. The Extended Well Test is designed to reveal more about the reservoir's potential and whether the flow rate is consistent.
Artificial Lift is Common: Even in successful projects, artificial lift is frequently used to optimise production. It doesn't necessarily mean the helium isn't commercially viable.
Rig Movement: There could be several reasons for this – routine maintenance, helping out Noble??? We simply don't have enough information to jump to conclusions.
Key Questions to Consider:
What will the EWT data reveal about flow rates over time and pressure behavior?
What kind of artificial lift methods are they considering, and what potential impact could those have on production?
If they drill an appraisal well, will the flow rates be similar or significantly different?
Bottom Line: It's premature to say the project is doomed based on limited information. Exploration is inherently uncertain, but there are still pathways to improve this discovery's potential.
ATB
Lee, I get the frustration with the lack of hard numbers, but let's be realistic. They've found potentially commercially viable helium with only a few drills, which is significant in itself. This isn't a mature project, it's early-stage exploration.
The upcoming Extended Well Test is crucial. They're looking at how the reservoir and flow rates respond over time, and if stimulation techniques could make a big difference to this well. It takes time to gather the data needed to make real production decisions. This is all par for the course in the exploration small cap world.
Remember, resource projects are high-risk, high-reward. If it were easy to find and produce helium on a large scale, everyone would be doing it.
If it's to high risk, just don't invest. If you think all is lost here and they'll be no good news over the next 6 months, then consider going short. Pays your money and ya takes ya chances.
Slacker, you may be right or may be wrong. I think the company might wait till after the EWT to raise, but this depends on the cost of the EWT. They might be exploring partnerships with larger companies that could provide funding in exchange for a stake in the project or wells. Your confidence in your short could be premature. My experience has shown me that those on either side of the trade can be taken off guard by unexpected news.
Dave - happy to be correct, my calcs are based on a price of $500 per thousand cubic for helium
0.5 MMSCFD * 0.047 = 0.0235 MMSCFD of pure helium
Convert to MCF:
0.0235 MMSCFD * 1000 = 23.5 MCF of pure helium per day
Daily Revenue (before costs):
23.5 MCF * $500/MCF = $11,750
Annual Revenue (before costs):
$11,750/day * 365 days/year = $4,288,750
Lorna's change in demeanor could be attributed to the market's reaction to flow rates, or other factors like stress, fatigue, or simply having a more measured personality. I wouldn't read too much into it. Importantly, let's focus on the facts:
A minimum flow rate of 0.5 mmcfd equates to roughly $4.2 million in annual revenue before costs.
If artificial lift can double or triple this flow, we're looking at $8.4 million or $12.6 million annually – a completely different proposition for field development. Additionally, a further appraisal well could have potentially higher, flow rates.
While there's still much work ahead, the potential upside remains significant.
It's possible they knew the flow rate at the time of the first interview where they announced the 4.7% helium concentration. The drilling rig and testing equipment would have provided real-time flow rate data and even with a less-than-ideal flow rate, they were probably genuinely relieved to confirm the presence of helium, a significant step in exploration.
Don't count this project out yet! The company mentioning artificial lift and an appraisal well shows they're serious about making this work. This indicates they see potential beyond the initial results and are proactively exploring ways to improve flow rates and gather better data for future development. Not without risk but plenty of potential upside to come.