Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
Important: in relation to the 31/12/2023 cash balance you also need to add in the £4.7M raised last month - this was after the Itumbula drilling, so their bank account should be looking quite good atm:
RNS 07 February 2024
Helium One Global Ltd
("Helium One" or "the Company")
Company raises £4.7 million via a company led placing
Tiger - exactly right.
That is what AIM is all about for a company like Helium One at this stage of their development - high risk but potentially high reward if successful. And for balance, complete wipe out if zero success - ie shareholders no longer want to bank roll financing, too risky. Companies list on AIM to raise finance, simple. Since listing on AIM in December 2020 (so really not very long in O&G exploration terms) HE1 have raised around £35M - there have been a few warrant conversions - but the mainstay cash raised has been as follows:
December 2020 on listing £6M
April 2021 £10M
September 2023 £6.8M
December 2023 £6.1M (this was the one at 0.25 - 72% discount - the one which nearly wiped out many)
February 2023 £4.7M
They will have cash leftover from recent raise, but no one knows quite how much but the latest accounts said:
Net cash balance at 31 December 2023 of US$8.7 million
Then add in February 2023 £4.7M. Then deduct - the unknown - the spend between 1/1/2024 and today plus commitments.
But in latest accounts issued this week the Chairman states:
"The company led placing provides Helium One with sufficient working capital to progress its planning for the next stage of the work programme in Tanzania."
So it seems no immediate need for cash but down the line (this year) expect a raise but hopefully at a higher level than current sp.
As an investor (I do not trade, no time for that) it seems to me that the success at Itumbula imo is the start of some proper de-risking the basin potential. The Tai drills to some extent have also de-risked the overall understanding, with the drill to Tai3 basement in due course is expected to show high helium yields. Yes of course they have more work to do, the planned extended well test in coming weeks and modelling.
But could this be the next news - bearing in mind Noble released their "probable huge" gas acreage after the first drill results?
"It is now also advancing desktop work, to compile resource estimates and subsurface modelling."
Resource estimate update from HE1? If good news that imo would materially affect the sp before extended well testing. Not impossible. Catch many out, the element of surprise.
At least todays market cap of £67M is broadly 50% more than what they have spent to date. That cannot be said for probably over 95% of companies on AIM. Say they end up spending £50-65M and are successful - what will the market cap be then? Humongous, no doubt.
Until next news, HE1 traders paradise (think someone commented HE1 is the most traded share on LSE) - until that is when they turn the corner. Fundamentals are right now pretty much irrelevant to traders - the share price is simply driven by traders. Ignore the noise. If you believe in the story add the dips, 2024 imo will be transformational year. Really not long in the scheme of things to go. GLA investors.
"Investment bank Liberum described Helium One Global Ltd (AIM:HE1, OTCQB:HLOGF)'s drill stem test (DST) results from its asset in Tanzania as highly encouraging, though it also noted these are 'early days' in the process of unlocking the potential of the project.
The hotly anticipated update on the Itumbula West-1 well measured a minimum flow rate of 0.5 million cubic feet per day, with a helium concentration of 4.7%.
The company now intends to carry out a more extensive and detailed extended well test (EWT) on the same well in the third quarter of 2024.
It is now also advancing desktop work, to compile resource estimates and subsurface modelling.
Helium One also revealed it is starting talks with potential vendors for production facility engineering.
Liberum, in its note to clients, said: "HE1 [Helium One] continues to evaluate the success at Itumbula and aims to achieve commerciality at the earliest opportunity.
"While still early days, the DST results are highly encouraging in our view, and a subsequent EWT may provide the potential to fast-track production and the company may engage with suitable off-takers in a success case.
"The company also reserves the optionality to deepen the Tai-3 well further into the basement to evaluate the helium potential, which we see as a quick way to prove up further value across HE1’s asset portfolio"
Liberum is a 'buyer' up 20p. The shares are currently changing hands for 1.55p, down 13%.
RNS: "Drill stem test ("DST") results carried out on the Itumbula West-1 well calculate a minimum flow rate of 0.5 million cubic feet per day ("mmscfd") containing 4.7% helium"
The flow rate will be improved on : )
As they move closer to commercialisation, some on here might not have seen this video. December 2022: David Mincham (previous HE1 CEO) explains the route to market/model etc this in one of his last interviews as CEO - aswell as some other good background information - but fast forward to 16.5 min - 20 min for the finance model. Extraordinarily high margins.
He talks about Tai as the potential discovery well but from memory (got in late here) they didn't manage to drill into the basement - something Lorna B has flagged to return to - almost certainly I expect after their Itumbula result.
https://www.youtube.com/watch?v=CLhAwmGlCos
Future looks very bright - atm they are only just touching the surface, so to speak. There will many industry eyes watching. Patience.
"In addition to helium, the Company also successfully flowed hydrogen to surface during Basement testing, at a concentration of 2.2%, over thirty-seven thousand times above background levels"
Very interesting to note that there was no comment in today's RNS about hydrogen. Maybe that will be the next news? One step at a time.
Listening again to that Donald Leggatt interview with LB on 22/2/2024 - link in top of this bulletin board. Note that this interview was 2.5 weeks after the RNS was released on 5/2/2024 "Itumbula West-1 well flows helium (4.7%) to surface" - so 2.5 weeks more to think about the results, and the message to convey to market etc.
LB, this is verbatim - at 6 mins in: not to labour the point again but she does seem incredibly confident - 2.5 weeks after the drilling results:
“........I think the other point here to put across is that we did things differently with this well. We tested the well we also had our own independent verification at site we had field PVT experts with their independent laboratory, so those samples that we’ve recovered from the downhill tools and the flow testing they were analysed at site they were extracted and measured under the reservoir temperature pressure and conditions so we are very confident what that 4.7% tells us and will yield us - we will be sending some samples off to the lab but we’re not waiting on the results of their samples in order to move forward with our next steps and I think that’s quite an important message to get across. We’ve already had that independent verification through the PVT work."
Next update is going to be very revealing!
Pg 16 of last filed accounts summarises all HE1 share options at 30/6/2023 and exercise prices (so doesn't include the Sept 23 options issued)
https://www.helium-one.com/wp-content/uploads/2023/11/Helium-One-Global-AFS-2023.pdf#new_tab
Director options:
The 6.6p options were issued in Sept 23 - that was before the 73% dilution in the Dec 23 placing. So they also took a big hit on paper. On AIM we have all seen director options repriced after such a significant drop, so good that nothing has occurred here. Of course that does not mean it won't happen or they issue more down the line. Also note none of the options have vested yet - the first on third tranche vests Sept 24. Think we will know a bit more by then! Options are there to incentive management performable so if the update converts to commercial success no one will begrudge.
"Additionally, the board have resolved to issue 33,750,000 options in aggregate to Directors and management to subscribe for ordinary shares (the "Options"). The Options will vest in three equal tranches over 3 years commencing 12 months from the date of grant and are exercisable at 6.6p per share, being the 10 day volume weighted average price. These options will be subject to shareholder approval granting the directors authority to issue shares for cash which will be sought in due course."
rtain of the Options have been granted to Directors and PDMR's as follows:
Director / PDMR
No. of Options
James Smith
2,000,000
Lorna Blaisse
8,000,000
Graham Jacobs
8,000,000
Chris Eyre
5,000,000
Sarah Cope
2,000,000
Nigel Friend
2,000,000
Russel Swarts
2,000,000
They confirmed they were using Baker Hughes' Reservoir Characterisation Instrument tool in 8/1/2024 RNS:
This explains what the tool is used for: reservoir volume, pressure, productivity etc
https://www.bakerhughes.com/evaluation/wireline-openhole-logging/fluid-characterization-and-testing
So that explains why LB seemed very confident. Good.
Rollback pre drill - extract from the RNS 8/1/2024 below makes it very clear how they plan obtain their results and why now there is no immediate need to seek another second independent analysis. They will be pretty clear what they have and LB said as much.
"Following the drilling of the Tai-3 well and acquisition of valuable data, the two primary objectives of this well are to target and evaluate the fault system as well as the conventional Karoo play, both of which are anticipated to yield helium. Therefore, in addition to the conventional mudlogging and wireline procedures that were undertaken on Tai-3, the Company also aims to perform an open hole well test in both the fault zones and Karoo targets on Itumbula West-1. Whilst drilling, the Company will be measuring gas shows using Geolog's mudlogging services and a portable mass spectrometer.
Once the wireline logs have been run and evaluated, the Company will also have the option to take downhole samples under reservoir conditions using Baker Hughes' Reservoir Characterisation Instrument tool. The Company will be able to transfer and evaluate these samples onsite, as well as sending duplicate samples for laboratory analyses at a leading noble gas laboratory."
The issue now hopefully is trying to work out how to monetise the find at "the earliest opportunity". As discussed in this forum there will be quite a few options but after the December placing LB will imo be looking to a choose a path which does not hit LTHs again, who took a nasty dilulative bath. Of course it is the LTH support who have hopefully put the company in the position they are today. So maybe taking a leaf out of Noble's strategy - offtaker fronting the development costs; a good win win for shareholders. The gold hydrogen find is probably making any development plan even trickier, but nice problem to have. Not forgetting the uniqueness of the situation. Likely for them to need more time evaluate. Didn't LB say in one of the videos "we have to get this right".
This was 3 years ago - even so, still well worth a listen, a lot of background information. They were using $250 per mcf then in their valuation model - today nearer $600 per mcf, probably higher.
At 4 mins in he talks about the three planned prospect drills - production model etc He said if just one of those drill succeeds - by that he put it at just 6 bcf level - that one de-risked well alone would be worth $250M.
At todays helium rate - obviously more than double.
https://www.youtube.com/watch?v=lEfp3UCN20k
Rollback research while we wait for next update : before drilling Itumbula West Lorna explained why that adjusted location was chosen. Watch first 2 mins, that's enough. The interesting comment is "connecting faults" for the whole basin. Joint the dots, the picture could be a very big sweet one. No wonder she said after successful drilling in one of the videos that they needed to adjust their mindset to fully evaluate the data. Next update could be transformational for all involved.
Certainly it seems less active on trading this past few days - those now in are in for the result. Fingers crossed.
https://www.youtube.com/watch?v=soNLk0jANwo
Research - it is worth re-reading the 20/12/2023 RNS explaining the rational for the revised drilling relocation, very telling: it is clear that they found exactly what they expected at Itumbula West - plus the unexpected, gold hydrogen, a huge bonus.
"Itumbula West-A well: New prospect and revised well location
Following the positive drilling results from the Tai-3 well, and the increase in concentration and frequency of helium shows encountered with increased depth as well as the proximity to faults and fractures in Basement, the Company has subsequently reviewed the geology of the Itumbula prospect. It is bounded by a large, deep seated western fault which extends into the Basement source rock. It is this fault that is interpreted to be associated with the active surface helium seep, located approximately 3km from the proposed well location.
With the results from Tai-1/-1A and Tai-3 indicating that it could be the migration of fluids that play a crucial role in liberating the helium out of the Basement source rock and along fractures and faults. The Company has now elected to target the western bounding fault at Itumbula in addition to the conventional targets in the Lake Beds, Karoo and Basement. Therefore, the Itumbula well has been designed to directly target this new, additional fault play where the Company anticipates helium concentrations will be significantly elevated.
continues........The Itumbula West-A well provides an opportunity to drill a highly ranked prospect into a new fault play, as well as targeting the Lake Beds, Karoo and Basement play. The new well is located, ~3km from the active Itumbula surface helium seep, with helium concentrations measured up to 10.2%, as well as the presence of multiple surface helium anomalies which have been identified across the prospect from multispectral satellite spectroscopy studies."
Next update is going be very interesting.