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CPR Report

Valuation Framework for Mendell Helium

Core Inputs Required for Valuation

A proper valuation of Mendell needs the following inputs:

A. Technical Inputs

• Prospective resource volumes (P90 / P50 / P10)

• Helium concentration ranges

• Expected flow rates

• Recovery factor

• Decline curve assumptions

• CAPEX (new well + facilities)

• OPEX (processing + operations)

•

B. Commercial Inputs

• Helium price deck (low / mid / high)

• Contract vs spot pricing mix

• Processing cost per Mcf

• Transport/storage cost assumptions

•

C. Financial Inputs

• Discount rate (typically 10–12% for helium)

• Tax regime

• Working interest (Mendell = 100% on key assets)

• Royalty assumptions (if any)

These are the “knobs” we adjust in the model.

RKB

CPR Report

Microsoft CoPilot, There is the Smith well which is in the Hugoton region, and I think the CPR says its 100% Mendel’s working interest but at present it is temporarily abandoned. What information is in the CPR about the Smith well? Does the CPR attach any resources to the Smith well?

The CPR assigns zero classified resources directly to the Smith well

The CPR does not give the Smith well:

• Reserves

• Contingent resources

• Prospective resources

• Risked volumes

• Unrisked volumes

The Smith well is not treated as a standalone resource bearing asset.

This is deliberate and consistent with CPR rules.

RKB

PS Mendel own 100% of the Smith well. Before being shut-in, it was 912 MCF and we have plans to re-open this well. Bonus is that all output goes straight to Jayhawk.

CPR Report

Comparison With Other AIM Helium CPRs

Compared to Helium One

• Mendell’s CPR is more conservative, which increases credibility.

• Geological model is simpler and more robust.

• Engineering assumptions are less speculative.

• Mendell’s risk profile is lower, but upside is still significant.

Compared to Pulsar Helium

• Mendell’s geology is less exotic, but more predictable.

• Pulsar has higher upside but higher geological risk.

• Mendell’s CPR is more balanced and commercially grounded.

Compared to Desert Mountain Energy

• DME has proven production; Mendell is pre drill.

• Mendell’s CPR is more conservative but still commercially viable.

• Mendell’s CAPEX is lower; DME’s infrastructure is more advanced.

Overall Positioning

Mendell sits in a sweet spot:

• More credible than the high risk explorers

• More upside than the mature producers

• Stronger geological fundamentals than most AIM helium peers

• A CPR that is cautious, realistic, and supportive of drilling

RKB

PS I think it is worth repeating:

• More credible than the high risk explorers

• More upside than the mature producers

• Stronger geological fundamentals than most AIM helium peers

CPR Report

Ten Key Investor Takeaways

1. The geology is sound — source, trap, seal, and migration all check out.

2. The reservoir is expected to flow, with permeability being the main variable.

3. Prospective resources are meaningful, even in conservative cases.

4. Risked volumes justify drilling — this is not a speculative flyer.

5. Economics work in the mid case, even with conservative helium pricing.

6. Upside is significant if reservoir quality matches analogue fields.

7. CAPEX is modest, thanks to shallow wells and modular processing.

8. OPEX is predictable and low, supporting strong margins.

9. No fatal geological or engineering risks are identified in the CPR.

10. The project’s value is unlocked by the first well — the CPR is effectively a green light to drill.

RKB

PS In 2 above It is flowing!

CPR Report

Integrated CPR Summary

Geology

• Valid helium source from radiogenic basement.

• Clear migration pathways and long term accumulation potential.

• Reservoir has adequate porosity/permeability for gas storage and flow.

• Trap and seal are credible and consistent with long term gas retention.

• Geological chance of success is respectable, not speculative.

•

Engineering

• Standard vertical well design — low technical risk.

• Reservoir expected to flow at commercially meaningful rates.

• Pressure regime supports natural flow without artificial lift.

• Surface facilities are modular and conventional.

• Main uncertainty is permeability, not whether the reservoir will flow.

•

Resources

• Classified as Prospective Resources (pre drill).

• Volumetrics show credible helium volumes across P90–P10 cases.

• CPR uses conservative assumptions for helium %, recovery, and reservoir quality.

• Risked volumes still justify drilling; unrisked volumes show strong upside.

•

Economics

• Mid case (P50) is commercially viable with positive NPV.

• Low case is marginal but still technically workable.

• High case shows material upside with strong IRR.

• Economics are not inflated — CPR uses middle of market helium prices.

• Biggest sensitivities: helium concentration and flow rate.

•

Bottom line: The CPR supports drilling and presents Mendell as a credible, commercially realistic helium prospect with meaningful upside.

RKB

PS Note the “Meaningful upside”

CPR Report

Microsoft CoPilot, The CPR Report I believe says that the Rost well is not producing, is that correct?

Yes — your understanding is correct. The CPR does indeed state that the Rost well is not producing.

Let me give you the exact meaning of that in CPR language, because it’s easy to misinterpret.

Technically the Rost well is producing it has been since December 2025 but so as not to confuse anything lets keep it that way at the moment.

But your note is important.

If the Rost well is producing now (post CPR), that has major implications outside the CPR:

• It confirms reservoir deliverability

• It confirms pressure is adequate

• It provides real gas composition data

• It reduces geological uncertainty

• It materially increases GCoS

• It strengthens the commercial case

• It validates the CPR’s geological model

•

But we can treat that separately, once you’re ready. (sorry folks that information is price sensitive and we don’t want the Market Makers to know what it is)

RKB

PS I gave Microsoft CoPilot the link to the CPR Report on the website and it said it could access it but could not reproduce anything due to Copyright Protection, so anything I have written was not plagiarised.

CPR Report

5. Economic Outcomes (High Level CPR Conclusions)

The CPR’s economic modelling essentially concludes:

• Low Case: Commercially marginal but still technically viable. Payback is slower; economics depend heavily on helium concentration.

• Best Case (P50): Solid commercial project with good margins. Payback period is reasonable. NPV is positive at conservative prices.

• High Case (P10): Strong commercial upside. High NPV and rapid payback. Attractive IRR.

•

The CPR is careful not to overstate anything — but the mid case is clearly viable.

6. Sensitivity Analysis

The CPR tests how sensitive the economics are to:

• Helium concentration

• Flow rate

• CAPEX overruns

• OPEX increases

• Helium price changes

•

The two biggest sensitivities are:

1. Helium concentration

2. Flow rate (permeability)

This is standard for helium projects.

7. Key Commercial Risks (CPR View)

The CPR flags the following risks:

• Reservoir performance risk Lower permeability = lower flow = weaker economics.

• Helium concentration risk If helium % is at the low end, revenue drops.

• Market price risk Helium prices are volatile and contract driven.

• Execution risk Delays in drilling or plant installation could affect timelines.

• Regulatory / permitting risk Standard for any resource project, but not highlighted as severe.

•

None of these are unusual or fatal — they are the same risks seen in U.S. helium projects.

8. Overall Economic Conclusion

The CPR’s economic section effectively says:

• The project is commercially viable in the mid case

• The upside is material if reservoir quality is good

• The downside is still technically workable, though less attractive

• Economics are not dependent on unrealistic assumptions

• The project is worth drilling based on risked NPV and GCoS

In plain English: If the reservoir performs anywhere near the CPR’s mid case assumptions, Mendell has a commercially meaningful helium project with strong upside potential.

RKB

PS “Mendell has a commercially meaningful helium project with strong upside potential” and we know what the Rost well is doing, so you need to factor that into the CPR Report.

CPR Report

Mendell Helium – One Page Economics & Risks Summary

1. Economic Model Structure

•

The CPR uses a standard gas project economic model, built around:

• CAPEX (drilling + facilities)

• OPEX (processing + operations)

• Helium price assumptions

• Flow rate scenarios (low / mid / high)

• Decline curves

• Recovery factors

• Discounted cash flow (DCF) analysis

•

It produces NPV, IRR, and payback period estimates for each case.

The CPR stays conservative — no aggressive pricing or unrealistic flow assumptions.

2. Helium Price Assumptions

The CPR uses a range of helium prices, reflecting:

• Long term contract prices

• Spot market volatility

• U.S. BLM auction history

• Global supply constraints

•

The price deck is not optimistic — it sits in the middle of the industry range.

This is important: The economics are not being inflated by unrealistic helium prices.

3. CAPEX (Capital Expenditure)

The CPR estimates CAPEX for:

• Drilling the initial well

• Surface facilities (processing, compression, purification)

• Infrastructure (roads, power, pads)

• Modular plant installation

•

CAPEX is modest compared to oil & gas projects because:

• Helium wells are shallower

• Processing units are modular

• No pipelines or large infrastructure are required

•

This keeps the project financially accessible.

4. OPEX (Operating Expenditure)

OPEX includes:

• Power

• Maintenance

• Labour

• Consumables

• Processing costs

• Helium purification

•

The CPR notes that OPEX is predictable and relatively low, which improves margins.

RKB

CPR Report

5. Helium Concentration Assumptions

Because no well has been drilled, the CPR uses analogue fields to estimate helium %.

Typical ranges used:

• Low case: modest helium concentration

• Best case: mid range concentration

• High case: strong helium concentration seen in analogue basins

•

The CPR does not assume extreme or unrealistic helium percentages.

This keeps the volumetrics grounded.

6. Recovery Factor

Helium recovery factors are generally high because:

• It is a free gas

• Reservoir drive is strong

• Processing removes impurities but does not reduce recoverability

•

The CPR uses conservative recovery factors consistent with U.S. helium fields.

7. What the Volumetrics Actually Mean:

The CPR’s volumetric analysis essentially says:

• There is enough geological volume to host a meaningful helium accumulation

• The best case scenario is commercially attractive

• The low case scenario is still technically viable

• The risked volumes justify drilling

• The unrisked volumes show strong upside if the reservoir performs well

•

In plain English: The CPR believes Mendell’s acreage has a realistic chance of containing commercially significant helium, with meaningful upside if the reservoir quality matches the analogue fields.

8. Overall Resource Classification Conclusion

The CPR’s resource section is conservative but positive:

• No reserves (expected at this stage)

• No contingent resources (no discovery yet)

• Prospective resources only — but with credible volumes

• Geological chance of success is respectable, not speculative

• Volumetrics support the case for drilling and potential commercial development

•

The CPR is effectively saying: “This is a legitimate helium prospect with real volume potential — now it needs the drill bit.”

RKB

PS In 8 above “No reserves” can be changed to “Lots of Reserves” as evidenced with the Rost well.

CPR Report

What the CPR is Allowed to Classify

Because Mendell has not yet drilled a discovery well, the CPR cannot classify anything as:

Reserves (proved, probable, possible)

Contingent resources (which require a discovery)

Therefore, the CPR is restricted to:

Prospective Resources

These represent undiscovered helium that is geologically plausible but unproven.

This is normal for a pre drill CPR.

2. How the CPR Estimates Volumes

The CPR uses a standard volumetric method:

"Gas in Place"="Area"×"Thickness"×"Porosity"×"Gas Saturation"

Then applies:

Helium concentration ranges

Recovery factors

Probability distributions (P90, P50, P10)

This produces a range of possible helium volumes.

The CPR does not assume aggressive numbers — it stays conservative.

3. Prospective Resource Categories

The CPR reports three standard probability cases:

P90 (Low Case) – conservative, 90% chance of at least this volume

P50 (Best Case) – median, 50% chance

P10 (High Case) – optimistic, 10% chance

This gives Mendell a risked and unrisked resource profile.

Unrisked volumes

Pure geology and volumetrics — no chance of success applied.

Risked volumes

Adjusted for geological chance of success (GCoS).

The CPR applies a GCoS typical for early stage helium plays.

Geological Chance of Success (GCoS)

The CPR breaks GCoS into components:

Source – high confidence

Migration – moderate to high

Reservoir – moderate

Trap/Seal – moderate to high

Timing – high

The combined GCoS is commercially reasonable for a pre drill helium prospect.

This is important: The CPR does not treat Mendell as a high risk geological gamble.

RKB

PS I think by now that whenever the CPR Report says “pre-drill” or “not yet drilled a discovery well” you may realise that if the opposite was inserted, then the CPR becomes much more interesting, but we have to stick to the rules, thus an overly conservative CPR.

Good evening BlueSky72

I will post more tomorrow as there is a lot in the CPR report that paints an overly conservative position and if I can dissect it a little more then we will all have more information to compute.

RKB

CPR Report

6) Overall Engineering Conclusion

The CPR’s engineering section effectively says:

• The well design is conventional

• The reservoir should flow at commercially meaningful rates

• Surface facilities are standard and low risk

• The main uncertainty is how strong the flow will be, not whether flow exists

•

In simple terms: The engineering supports a credible case for commercial helium production, provided the reservoir permeability is within the expected range.

RKB

PS In case you have forgotten, Rost is flowing and has been for over 4 months @ 5.1% Helium with elevated price for our production.

CPR Report

5) Engineering Risks (CPR view)

The CPR flags three main engineering risks:

1. Permeability uncertainty — affects flow rate and well count

2. Helium concentration variability — affects processing economics

3. Pressure depletion rate — affects long term deliverability

None of these are unusual; they are standard for early stage gas projects.

RKB

PS We do not need to be concerned about Well count as we have our relationship with Ritchie Exploration.

CPR Report

4) Infrastructure & Logistics

The CPR notes:

• Access roads are adequate

• No major civil engineering required

• Power requirements are modest

• Modular processing units can be deployed

•

This keeps CAPEX under control and reduces execution risk.

RKB

CPR Report

3) Surface Facilities & Processing

Helium production requires separation from other gases. The CPR assumes:

• A simple gas processing train

• Nitrogen rejection

• Helium purification to commercial grade

• Standard compression and storage

•

Nothing unusual or high risk here — the engineering is off the shelf.

RKB

CPR Report

2. Pressure & Deliverability Modelling

•

The CPR uses standard gas flow equations (Darcy, pseudo pressure, etc.) to estimate deliverability.

Their modelling suggests:

• Reservoir pressure is sufficient to drive initial flow without artificial lift

• Decline is expected to be gradual, not steep

• The reservoir behaves like a tight to moderate gas system, typical for helium plays

•

This is consistent with other radiogenic helium fields.

RKB

CPR Report

The CPR uses:

• Porosity and permeability from analogues

• Thickness from seismic interpretation

• Pressure assumptions based on basin analogues

• Gas composition ranges (helium %, nitrogen %, hydrocarbons)

•

From these inputs, the CPR models expected flow rates.

The conclusion is essentially:

• Flow rates are likely adequate for commercial helium production

• Variability in permeability is the biggest uncertainty

• Even at the lower end of permeability, flow is still technically viable, just less productive

•

In plain English: The reservoir should flow — the question is how strongly, not whether it flows at all.

RKB

PS Bottom line: The reservoir is flowing at an excellent rate.

CPR Report

Mendell Helium – Engineering & Flow Potential Summary

1. Well Design & Drilling Concept

Well Design & Drilling Concept

The CPR outlines a straightforward vertical well targeting the main reservoir units identified in the geological section. Key points:

• Standard oil and gas style drilling — nothing exotic or experimental

• Depth is manageable, meaning lower drilling cost and lower mechanical risk

• Casing design is conventional and suitable for gas production

• No unusual pressure regimes expected

•

This is good: the engineering is low risk and industry standard.

RKB

CPR Report

Overall Geological Conclusion

The CPR’s geological section essentially says:

• The source is valid

• The migration is plausible

• The reservoir is adequate

• The trap is credible

• The seal is strong

• The analogue fields support the model

•

In plain English: The geology is sound enough to justify drilling and has a realistic chance of hosting commercial helium.

RKB

PS for “realistic” insert “100%”

CPR Report

Geological Risks (CPR view)

The CPR flags three main risks:

1. Reservoir permeability variability — could affect flow rates.

2. Trap effectiveness — although the seal is good, small faults could reduce volumes.

3. Helium concentration uncertainty — until drilling, the exact percentage is unknown.

None of these are unusual; they are standard for early stage helium exploration.

RKB

PS Mendell’s MO is to de-water, a first in Kansas and with our Rost well we know the percentage, its 5.1%