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This interview does emphasize what a shyster TAJ is. (I’ve had concerns about him for a while.) Putting aside the fact that the change in plans for flow testing should have been communicated earlier via an RNS (rather than a YouTube interview), he had also previously stated that the exploration wells could be converted into production wells (much to my amazement, I’d add). Specifically, when asked in an interview about using the explorations wells as production wells, he replied “why not?”. Well, in this interview, he goes into some details as to exactly why not.

I’m still here because I think Cliff Cain is the man. But I’ll be ignoring TAJ’s interviews from hereon; he’s just not reliable.

I should add that a traditional bank would probably still be loath to make the loan without an independent resource report, but some sort of NBFI (non-bank financial institution) could well step in

My guess—and it’s a total guess—is that Pulsar are trying to negotiate an offtake agreement with a major buyer/big name. An offtake deal can be sufficient reassurance for banks to stump up a start-up loan to a junior resource company looking to get to first production, even without an independent resource report in place (you’d just need a sufficiently motivated buyer, which shouldn’t be an issue). Cliff Cain actually advised on a few such deals when he was at Edelgas I believe. It would also help explain Pulsar’s relative radio silence on the flow test and resource report, as, under such a scenario, the commercial negotiations would be highly sensitive.

This whole situation regarding flow testing is bizarre, and troubling. They had previously stated (back in February or March, as I recall) that the flow testing equipment was onsite. So what happened to it: did they change plans because of the looming approval of production regulations, or was there a problem flow testing one of these low-cost boring wells? The issue is that, without flow testing, they cannot get a new resource evaluation, and, without that evaluation, they cannot undertake reserves-based lending to pay for the production facility (IIRC, even the $12.5m provisional lending agreement they have with University Bank is contingent on a new reserves report). Unless someone else stumps up the bill (the government??), or they delay the flow testing for the production wells (but won’t that push back start-up, and also be modest as I am assuming the new wells they’re drilling will be in a tightly packed area), or will they rely entirely on equity financing? Or something else??

All in all, this does not add up, and they really should be obligated to provide an operational update regarding their future plans.

Safe to assume this newly acquired land is where they’re planning to site the production facility. (They just can’t officially say that yet because they don’t want to frighten the neighbours, haven’t applied for the permits at this stage, etc..)

Excellent points; cheers BB3.

For me, the inclusion of the mandatory threshold requiring an Environmental Assessment Worksheet (EAW) only for projects with five or more gas wells feels like a big positive. It seems difficult to conclude anything other than it’s a sop to Pulsar to enable them to expedite production at a smaller plant (otherwise there’s always the risk that the company could run out of cash waiting for the time-consuming EAW to conclude). It doesn’t mean it’s gonna be a piece of cake mind—there’s still plenty of hoops to jump through even with the smaller plant—but for many investors regulatory uncertainty was a—or maybe the—major risk of this stock. Given Minnesota’s historically poor reputation in this regard, the speed with which this has all been going through is very encouraging.

So this is a big deal (though not shocking). As many here already know, Jetstream 3 onwards were very cheap and cheerful wells, which copied many of the techniques used by miners for their exploratory boring. Personally, I’d never remotely viewed them as potential production wells, but TAJ, in one of his interviews, had said “why not” when asked if they could be converted into production wells (well, now we know why not).

In contrast, Jetstream 1 and 2 were far more expensive, and a wider gauge too. Given that jetstream 1 was largely a success, they would want to use that one I’d assume if they’re hoping to fast-track production. Jetstream 2 was not great though. They had in the past talked about revisiting it, but the speech from December by one of their directors basically said it just wasn’t especially good. Hopefully at some stage soon the company will comment on all of this…..

Darn, I had it wrong. I checked the actual regulations, and the production prohibition relates to wells drilled AFTER July 2025.

“. 6. Conversion of exploratory borings. Exploratory borings that were completed before July 1, 2025, may be used for gas resource development operations subject to regulation under this chapter. Exploratory borings completed on or after July 1, 2025, may not be converted into gas wells subject to regulation under this chapter.”

https://files.dnr.state.mn.us/input/rules/rulemaking/rd4995-proposed-rules.pdf

As far as I’ve heard on other boards, the new regulations won’t allow any production from wells drilled prior to July 2025. In addition, any production plant with more than four wells connected to it will require a fairly exhaustive environmental assessment.

For Pulsar, everything from Jetstream 3 onwards was drilled after July 2025, which means they could still theoretically use the best four out of five wells drilled after July 2025 if they want to expedite a production plant. Jetstream 1 off the table though….

VERY INTERESTING!! Many thanks BB3; much appreciated. I’m kinda intrigued to hear it. As coincidence would have it, I reached out to TAJ yesterday, and asked the same question. He didn’t respond directly, but instead emphasized how the early April date was only “indicative” and “subject to change”. I actually got the impression from his email that flow testing hadn’t started, but again, he didn’t actually answer directly, so I’m inferring a tad. Perhaps we are both right? Maybe the date did slip, but it’s under way now? Anyhow, thanks again for sharing.

Pulsar previously said six weeks per well. However, they added there would be updates during the testing. The question in my mind at this moment is: have they started the flow testing? The interview, as has been mentioned, was opaque on this point.

Https://finance.yahoo.com/markets/stocks/articles/abcrescent-cooperatief-u-announces-filing-002800358.html

Https://www.thetimes.com/comment/columnists/article/helium-importance-iran-war-hormuz-ww7sschfq

I do recall! Great to see Rockhopper going great guns now though.

Pure helium projects are few, but from what I’ve seen they’re much quicker than hydrocarbons or projects, and much, much, much quicker than mining projects. Depending on the scale of the resource, the cost of a plant would be in the region of $50m (very much at the upper end; lower end could be half of that). I’d estimate from FID to projection would be around 18 months, although Pulsar has already set aside some monies for long lead items. The big known unknown is the state’s bureaucracy. Apparently it’s very challenging to negotiate, and so when (if?) Pulsar would be granted production license approval is up in the air. Given what’s going on in Hormuz, the small footprint such a plant would leave, and the governor’s recent comments regarding speeding up licensing procedures, I’d hope that they won’t faff around. But politicians have an infinite tendency to disappoint….

The cores will tell them too. As you know, they’re coring while drilling, so they certainly could know definitively by now—assuming they’ve tested at least the cores from one of the wells from JS-3 onwards.

FYI, pulsar helium just tweeted a seven post thread on X explaining the reasons for why they waited to begin the flow test. Just see the replies under today’s post….

Agreed @reserved. The Pulsar helium CEO (TAJ) needs to do an interview to explain what is going on. There’s actually been a lot of drilling since that December presentation that people are referring to; it may be that they more certainty now. Anyhow, this has been a failure of comms, in my view, and today’s drop in the share price is reflecting that

Just to emphasize how bad the expectations management has been on the flow testing, back in early December Pulsar were saying that the flow testing might begin in January. The lack of explanation for these delays is disappointing; shareholders should be kept informed.

Agreed with Reserved on this one. The delay to the flow testing is extremely irritating. In early February Pulsar said that the flow testing equipment would be on site by mid-February. Here we are a month later and they’ve still not started, and won’t be started for a few more weeks.