Member Info for Scott22

This is a development well - they have a discovery well (at 25 mmcf/day) and the field is proven and producing. Still it is remarkable that they will drill and test the well (much deeper than Tai) in 10 days. This is the first of a second set of three wells they are drilling as the next stage. They plan to have total of 70 wells within a few years. They are after argon too and think that can be a little supplemental revenue source. I do not think that He1 has mentioned argon. On the other hand DME has to deal with significant CO2 (up to 4%) and methane (up to 2.5%) which so far are not problems that He1 expects. DME is in a hydrocarbon system with source rocks, He1 is not and is relying on migration of helium from the crust in a non petroleum system.

The Company is pleased to announce that it has began operations on well #4 located near in the State of Arizona in the Holbrook Basin. Well #4 will be the deepest to date going to the bedrock granite, approximately 3900 feet, and is expected to take approximately 10 days to drill and test. Desert Mountain Energy expects to encounter rare earth gases in addition to helium. The Company is using cutting edge testing equipment, including drones and air borne sensing equipment to collect data. The resulting data will be combined with results from previously collected data, using non-invasive high t

This is a development well - they have a discovery well (at 25 mmcf/day) and the field is proven and producing. Still it is remarkable that they will drill and test the well (much deeper than Tai) in 10 days. This is the first of a second set of three wells they are drilling as the next stage. They plan to have total of 70 wells within a few years. They are after argon too and think that can be a little supplemental revenue source. I do not think that He1 has mentioned argon. On the other hand DME has to deal with significant CO2 (up to 4%) and methane (up to 2.5%) which so far are not problems that He1 expects. DME is in a hydrocarbon system with source rocks, He1 is not and is relying on migration of helium from the crust in a non petroleum system.

The Company is pleased to announce that it has began operations on well #4 located near in the State of Arizona in the Holbrook Basin. Well #4 will be the deepest to date going to the bedrock granite, approximately 3900 feet, and is expected to take approximately 10 days to drill and test. Desert Mountain Energy expects to encounter rare earth gases in addition to helium. The Company is using cutting edge testing equipment, including drones and air borne sensing equipment to collect data. The resulting data will be combined with results from previously collected data, using non-invasive high tech sensing equipment.

They could have mentioned Jubilee.

I know they are using a mineral rig and not an oil and gas rig. Do they set and cement surface casing and intermediate casing? Do they have the drill pipe on site?

p.s. a wildcat is a very good thing if it hits a big discovery. Sort of like a jackpot or a bonanza. Doesn’t always happen but can be very exciting. Tension is building.

Thanks much, no insult taken, appreciate input from you and the rest of the board. It is exciting to be following along (with heightened interest due to our shares) as they, after years of work, try to do something that has never really been done before (drill greenfield helium wells in total absence of a petroleum system) and try to establish a globally important source for an increasingly crucial and increasingly scarce commodity. If they pull it off it will be quite amazing. And I think they have a good shot at it.

Don't quibble. I am not attacking He1 - I love the story and the company.

exploratory well - a test hole to locate proven reserves, to determine whether oil and gas (in this case helium) are present in a prospective reservoir.

appraisal well - used to delineate the size of a discovery well and the expected production rate.

delineation well - a step-out well helping to delineate the size and outline of a proven proven field

development well - is drilled in a pool that is already proven and producing, to increase the production.

So we would all agree that the Tai well is not an appraisal well or a delineation well or a development well.

So Tai is an exploratory well. A wildcat well is simply an exploratory well in an area not known to be an oil or gas field. They are used like all exploratory wells to verify the existence of commercial quantities of quality oil and gas deposits. The first exploratory well drilled in a geographic region or a prospective field is also called a wildcat. To me wildcat totally applies to this first Tai well. It is not in a producing field. There are no proven reserves. It is the first well in a geographic region or in a prospective field. I guess you can also use wildcat to mean a wild high risk well with no data behind it and little chance of success. I wasn't using it that way and I didn't mean it as an insult.

"not dependent on salt" can be our mantra.

But "not dependent on salt" can be good or bad. Good if you have another effective seal of a much better size and type of reservoir.

But bad if the seal is not effective. Sealing helium is tough. Tiny atom. Salt is crystalline and the best seal. Maybe helium needs salt seal. We are about to find out.

DM has already said that if Rukwa doesn't work out (he hated to even go there but was pressed about a plan B at one of the Q and A sessions), then the other two areas may have areas with salt seals.

I would not say that the HLOGF price is not relevant at all to the He1.L price. Like all dual (or more) exchange traded shares they don't trade in perfect sync but eventually they do move together . If if gets too out of balance the arbitrage opportunity becomes profitable and that tends to fix it. I bought my first shares on LSE through SCH foreign desk before they were being traded OTC - but now they are listed in my account as HLOGF and I could sell them on either market. It would be easier for me to sell (not that I am planning that) on OTC as there is no $50 fee like buying in London through SCH. And the trade will come through much faster. Several of my trades in London take a while - some seem to be held and filled after the market. I don't understand that but it doesn't seem like an immediate OTC trade.

I think that DME is not in the wildcat stage. That ended with a discovery well flowing 25 mmcf/day with 7% helium. Also the Holbrook basin and the Cocino sandstone interval produced helium for 15 years from the Pinto Dome area.

He1 is in the wildcat stage. That could end abruptly if the first well at Tai is a discovery well. Rukwa is potentially many times bigger resource than is Holbrook basin. It is more interesting story. It has better leadership in my opinion. But is has to be proved.

Anyway I did not buy DME early. I got interested in helium through the Helium 1 story. I did not think there were other pure helium wells (with nitrogen but no hydrocarbons). I found that over 90% of helium comes from natural gas wells with small concentrations that are processed out. But there are stratigraphic areas where some layers have helium without much natural gas (usually there are found together with petroleum systems where there are source rocks and migration of hydrocarbons as well, usually they have salt seals). Anyway the geology of the Holbrook basin is interesting and they have had helium wells - and that led me to DME who is reviving helium production there. There are other targets and documented wells elsewhere (including Canada) with a lot of helium and not much natural gas. But Tanzania seems some what unique is that there is no hydrocarbon system in the area and the helium may be trapped in very conventional traps. He1 is looking for helium by looking for helium, not just finding some helium rich spots while looking for hydrocarbons.

So I did not buy DME early (wish I had). I just bought a little to follow the story there as part of following the whole Helium story. I got mine just under US $2 so I am up 50% very quickly. But I did get my He1 shares early.

He1 - much bigger potential resource, I like DM and all the Oxford geology work that has led to this point. All they have to do is prove commercial reservoirs of helium. That will be a huge deal and it could come within months. Imagine where He1 would be if they had one well flowing at 25 mmcf/day with 7% Helium (see below). To me the upside is much higher. The possibility of ending up with nothing is also probably higher. Both are speculative in my opinion. But I enjoy watching the He1 story unfold a lot more.

DME: They have proven good salt seals with helium in place in a specific interval (Cocino sandstone) with good porosity and permeability . Holbrook basin produced 6.3 BCF in 15 years from 11 wells at PInto Dome some years back. Recent DME well at another location has excellent pressure and flowed 25 mmcf/day with 7.3% Helium. They are in good location for getting helium to market. They will be selling Helium faster than He1.

That article also makes the claim that some companies are just getting leases and setting up companies to attract investors to a hot space, without any plans to actually go after any helium. They call out Rare Earth Exploration specifically. It is nice that Helium One has DM (a geologist and a proven project manager in Africa) running the show and that they have been so careful to document all the steps as they go. He1 is not hype, it is a truly exciting company. Traps and seals are the key. Oxford provided the underlying science.

<
Rare Earth Exploration, a Texas-based company, received a drilling permit from the Oil and Gas Commission in April 2019. It also holds active leases with the Arizona State Land Department. In November of that year, a Texas State Securities Board commissioner filed an emergency order against the company for fraudulent claims to attract investors.

Among some industry experts, there have been whispers about other companies as well, but no legal action to date.

“The Holbrook Basin is like the Wild West,” Constenius said. “There's some professional companies. And then there's some disreputable companies, what I call promoters, where they're actually kind of fleecing people on the hype of helium.”>>

Here is the link https://www.azcentral.com/story/news/local/arizona-environment/2021/05/16/helium-mines-could-lift-arizona-economy-but-locals-fear-effects/7113083002/

Article in the central arizona news. Not much new but a comment about traps and sealing that caught my eye. Helium is such a small molecule it can even pass through metal tanks which is why some is lost in trucking it to end users. Helium one will have to be careful as they set up their processes to truck it to port, but still that will be a good problem to have - means the have found commercial accumulations of the gas . The big item to me is if there will be big reservoirs trapped in structures like Tai or if they will have to move on to the other prospect areas which may have salt seals more similar to the Holbrook basin.

<
“Helium is coming up from the Earth's interior all over the planet,” Uhlman said. “It's coming up in your backyard. It's coming out at the football field. It's coming out everywhere at a steady basis. And the only reason you want to drill for it is if it's been captured underneath a layer. This gas wants to move up and it doesn't move horizontally, it just moves up and it makes a pool. You drop a conventional well into it and then you've got your helium.”>>

Isn’t the extended well test at Chinook. But I totally agree with last poster that Cascadura has more to give. No reason it cannot produce at 200 mmcf/day with a couple of more development wells.

....when efficient migration and trapping are assumed.

It is encouraging that Oxford scientists are assuming that is happening. Now DM and his team have to prove it. Very exciting.

Thanks from me too to seisprocessor. I could not do the seismic interpretaions in Geology 101, but I find it very interesting.

I am invested in DME as well as He1 and I have tried to pay attention to both companies.

There are clearly pretty nice traps at Rukwa. But helium is very hard to seal and I think that is the main issue. I have read that when they pick up helium in trucks with special transport tanks at the national reservoir in Texas (about to be closed this fall), they can lose 20% of the helium driving a few hundred km to an end user. It is hard to keep it from leaking out. That is why it is such a great leak detector. Holbrook valley is a salt bed and they have salt (a crystalline structure) seals which are the very best. Rukwa has more conventional traps (although the other two He1 prospects may have salt seals).

Anyway, seems to me the seals will tell the story. Are they good enough to hold big reservoirs of helium/nitrogen gas. Apparently the oxford scientists and the independent evaluators think that there are good traps and good seals. But He1 has to prove that with the drill bit. Hang on for a interesting ride.

Every 6 months I like to make a list of the 5 biggest positives and the 5 biggest negatives, to confirm my investment thesis, or to drive me away if that is warranted. (I do this on all my holdings). I did not make a lot of changes to My TXP lists on this round. I still have a high conviction that the rewards to risk ratio is very favorable. I will only comment about one item, the first one. Will be interested if anyone has different positive or negative items to consider.

Positives:
1. Xavier Moonan and Paul Baay.
2. Turbiditie Sands model on Ortoire block
3. Proven big discovery at Cascadura (and lesser discovery at Coho) confirming that model.
4. No net debt
5. NGC contract guarantees profitable return during all cycles.

Negatives:
1. Truly molasses pace getting Coho on line.
2. multiple timelines not met anywhere
3. local politics/governance/taxation policies
4. COB John Wright
5. At the least a temporary setback at Chinook - plus uncertainty (by nature of the beast) of future exploration .

Now the one comment. Paul is a good manager and deserves much credit. I am glad we have him. And there are also other important leaders including some of the old guard and especially of the new promotions. But Xavier is a treasure. I have been reading that many big financial firms have their own geologists in house to help them evaluate the prospects of small resource companies. But none of them has an analyst with the deep knowledge of the geology of Trinidad and the passion for the country and for the company. I totally trust that he will help keep the exploration process on a good track. Obviously he can't make hydrocarbons show up if they are not there. But he has done years and years of work on all the old data and he will integrate all the new data (from seismic and from current drills) into his thinking - and he will help TXP have best possible exploration outcomes. Not every company, especially among small cap oil and gas companies, has that kind of expertise.

Thanks for the "good luck on DME". I have much more He1 and I have stronger conviction. The chance of a ten bagger from my initial investment is much higher. But I also like the DME story for the reasons I mentioned. And having some of that keeps me connected to the broader helium story.

Feb 2021 was when DME released an analysis of reserves on one well, not 2020. Just a typo but could be distracting. Sorry. One other good thing about DME is that they have electronics factories (including on by Intel) being built in the area and also the US wants to secure domestic supply of helium. That is why I have a little of DME though I think the upside is greater for He1 - if they find helium trapped and sealed and ready to be exploited.

DME released reserve estimates on one of their wells in Feb 2020. Reserves were 284,000 MCF figured on area of 640 acres. On 100 wells that would be 28 BCF if I am doing math right. I am sure there is no accuracy to any prediction yet. Need a lot more wells to confirm production from a single zone over a wide area. I doubt this helps but maybe someone else more knowledgeable than myself could look at the February 2021 reserve estimate from that one well or else dig in a little deeper.

The pinto Dome area of the Holbrook area which was where prior commercial helium production occurred did produce 6.5 BCF over 15 years from about 15 wells. The best well produced almost 2 BCF, likely the record for helium production from a single well.