RE: 28p21 Oct 2024 12:55
View from Vox
Excellent news out of Helix Exploration on its Clink #1 well at Ingomar Dome, Montana. Markets welcomed the announcement of a successful reentry and deepening of the well to 2,606m, sending
HEX
shares 16% higher in early Monday trade.
HEX
has more than doubled since listing on AIM in April 2024.
Helix's reentry operations on Clink #1 aimed to place the problematic Mowry shale formation behind pipe. The interval was successfully cased over with 7-inch casing cemented to surface. Following the reentry, and with the well in good condition,
HEX
deepened the well to determine if the Precambrian could be reached. While Precambrian rock was not found, a second thick Cambrian sandstone horizon was found at 8,290 ft all the way to total depth.
Investors can now expect the well to be completed and testing to commence shortly. Production casing will run the hole to total depth, and testing will proceed immediately after.
In June, Oak Securities set a price target of 93p for Helix, following
HEX
's acquisition of the Rudyard discovery in Montana for US$250k in cash and shares. Helix is currently trading at 22.77p, giving it a market cap of of just under £30m on the AIM market. If realised, Oak's valuation will send Helix out of the ranks of junior resources companies and towards the mid-tier.
Oak values Rudyard at c. US$85m as it is estimated to contain contingent resources of 0.48 bcf of helium, with additional upside at greater depth. Oak's unrisked valuation of Helix's overall portfolio is 187p/share. In addition to increasing
HEX
's resource base, Rudyard should enable near-term cashflow.
Helium is in unprecedented short supply as demand for high-tech applications continues to surge. Demand growth estimates CAGR of 6% from 5.9bcf/y in 2023 to 8.7bcf/y in 2030.
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