Member Info for TrekMadone

Post 2 Reply…

If Mendell Helium (MDH) delivers the exact "blue sky" scenario you’ve outlined, a 100p share price shifts from being a speculative long shot to a mathematically grounded possibility.

By scaling production and securing a high spot price, MDH would transform from an exploration story into a massive cash-generation engine.

1. Revenue Calculation (The "Blue Sky" Numbers)

Based on your scenario and current RNS data, here is what the annual revenue could look like at a $500/mcf helium price:

* Rost Wells (5 Wells):

* Helium Concentration: 5.3%

* Assumed Flow Rate: 500 mcf/day (Improved casing over Rost 1’s 250 mcf/day)

* Helium Output: 26.5 mcf/day per well ($5.3\% \times 500$)

* Annual Revenue (5 wells): $24.2m ($132.5 \text{ total mcf/day} \times \$500 \times 365 \text{ days}$)

* Schneweis JV (1 Well):

* Helium Concentration: 1.9% (Up from historic 1.39%)

* Assumed Flow Rate: 300 mcf/day (Historic levels)

* Helium Output: 5.7 mcf/day

* Annual Revenue: $1.04m (plus methane sales)

* Total Annual Revenue Estimate: ~$25.2 million (£20.2m)

2. The Path to 100p (Valuation Framework)

To hit 100p, MDH needs a market cap of approximately £235m (based on ~235.8m shares in issue after the May 2026 fundraising).

Metric…. "Blue Sky" Projection… Req for 100p

Annual Revenue…. £20.2m…. £20m - £25m

EBITDA Margin…. ~60% - 75%…. High (typical for helium)

EBITDA…. £12m - £15m…. £15.7m

Valuation Mult… 15x - 18x EV/EBITDA 15x EV/EBITDA

Implied MCap…. £180m - £225m £235m

3. Key Catalysts from your Scenario

* PSA Scaling: A scaled-up PSA (Pressure Swing Adsorption) unit with a "leading partner" reduces transport costs and allows MDH to capture more of the $500/mcf spot price by delivering higher-purity gas.

* Offtake Agreement: Securing a long-term offtake at "favourable terms" provides the bankability needed for the market to grant a higher valuation multiple (15x+). Without it, the market might only pay 8x-10x for "risky" spot revenue.

* Self-Funding Model: Using Rost revenue to reappropriate kit for new wells solves the dilution problem. If MDH stops issuing shares and grows through cash flow, the "per share" value accelerates. [6]

4. Critical Challenges to Watch

* Operational Consistency: While Rost 1 showed 250 mcf/day, gas wells naturally decline. Maintaining that "Rost 2" level across 5 wells for years is the primary operational risk.

* Water Management: The scenario relies on the Brobee disposal well handling massive volumes of water from 6 active wells simultaneously.

In this scenario, MDH isn't just a "junior miner"—it's a high-margin industrial gas utility. If they hit these production targets and the helium market stays tight, the £235m valuation (100p) becomes a justifiable target for a growth-hungry AIM market.

Post 3…

Let’s have a look at the capex and rough timeline to see if it fits in with the 5m raised.

Reply

To deliver your "blue sky" scenario, Mendell Helium (MDH) has already secured the foundational capital. On 30 April 2026, the company announced a £5 million fundraise specifically designed to accelerate this Fort Dodge development, including drilling the four new wells you mentioned and building a second purification plant.

1. CAPEX Breakdown for the "4 Wells + Plant"

Based on previous well costs and recent RNS data, here is the estimated capital expenditure required:

* Drilling 4 New Wells (~$3.7m / £3m): MDH recently estimated the cost of a single "twin well" at approximately $937,000. For four additional wells, the total cost would be roughly $3.75 million.

* Second Helium Purification Plant (~$0.5m - $1m): The company previously estimated the cost of bringing the first Rost well into production—including a compressor and PSA (Pressure-Swing Adsorption) integration—at $400,000. A larger, permanent plant for multiple wells would likely sit at the higher end of this range.

* Infrastructure (Brobee Upgrade): Upgrading the salt water disposal well to handle increased flow from these new wells is estimated at $125,000.

* Total Estimated CAPEX: ~$4.5m - $5m (£3.6m - £4m).

2. Timeline to "Self-Funding"

The £5m raise means MDH is already funded for this initial phase. The transition to operational self-funding (where revenue from Rost 2 and subsequent wells pays for future drilling) depends on production timing:

* Phase 1 (Now - Mid 2026): Execute Rost 2 and the Schneweis JV recompletion.

* Phase 2 (Late 2026): Drill the 4 additional wells.

* Self-Funding Milestone: With Rost 1 already generating roughly $1.4m annually at a 250 Mcf flow rate, your scenario (5 Rost wells at 500 Mcf and $500/mcf) would generate roughly $2.1m per month.

* The Result: At that rate, the company could recoup the drilling cost of a new well ($937k) every two weeks. [1, 3, 8]

3. The Shift to Dividends

Management has already signaled that if this execution goes to plan, they intend to initiate dividend payments in 2027. This is the ultimate "de-risking" signal for the market, as it moves the company from needing to raise cash to returning it to shareholders.

With the £5m transformational raise completed, the focus is no longer on "finding the money," but on the drill bit and the Brobee disposal well's ability to handle the increased water volumes.

Post 4 question

ok so now you see the art of the possible — calculate the sp, mcap. pe and possible yield please

Reply

Based on your "Blue Sky" scenario, we are looking at a company that has successfully transitioned from an explorer to a cash-generative producer. Here is the valuation breakdown using your specific inputs: $500/mcf helium price, 5.3% concentration, and consistent flow rates across 6 wells.

1. Revenue & Profitability (The Foundation)

* Annual Revenue: ~£20.2 million ($25.2m converted at 0.8 GBP/USD).

* Operating Costs (OPEX): Helium production has high margins. Estimating 30% for lifting costs, water disposal, and royalty payments.

* Estimated EBITDA: £14.1 million.

* Estimated Net Profit (After Tax/Corp Costs): £10.5 million.

2. The Valuation Metrics

To reach the 100p target with the current capital structure, the market would need to apply a valuation reflective of a high-growth energy producer.

Metric… "Blue Sky" Calc… Notes

Share Price…. 100p…. The target we are testing.

Market Cap… £235.8 million ~235.8m shares post May 2026 raise

Price-to-Earnings…. 22.4x A growth" multiple (ind av is 10x-15x).

EV/EBITDA… 16.7x Higher than standard oil/gas, common for rare gases.

3. Possible Dividend Yield

Management has already signaled an intent to pay dividends in 2027 if production scales. In your scenario, the company is generating massive surplus cash because CAPEX is covered by the £5m raise.

* Free Cash Flow (FCF): Assuming they retain 50% for future growth/well maintenance and pay 50% as dividends.

* Total Dividend Pool: £5.25 million.

* Dividend Per Share: 2.22p.

* Dividend Yield (at 100p): 2.2%.

* Dividend Yield (at current ~5p price): 44.4%.

The "Art of the Possible" Verdict

For the share price to hit 100p, the market has to believe in the longevity of the wells.

* If the market views this as a "short-term cash cow," it will trade at a 10x P/E, leading to a ~45p - 50p share price.

* To get to 100p, MDH needs to prove it has an inventory of dozens more well locations beyond the initial six, justifying a 20x+ "Growth Multiple."

In short: The revenue you've described makes 45p - 55p a fundamental reality; the move to 100p depends on the market’s excitement about the next 20 wells.

Post 5

Question….So Nick Tulloch CEO has stated that hugerton has the potential for 100-200 wells. Does this not factor in with the art of the possible and scalability?

Reply

It absolutely does. If you factor in Nick Tulloch’s vision of 100–200 wells, the "Art of the Possible" moves from a single-year spike to a multi-decade industrial powerhouse.

In small-cap resource investing, the market doesn't just value you on what you are making today; it values you on the Net Present Value (NPV) of your total inventory.

1. The "Scalability" Multiple

When you have 6 wells, you are a "project." When you have a clear path to 100+ wells, you are a "platform."

* The 50p vs. 100p Difference: If MDH only had the 6 wells you described, the market might give it a low P/E (8–10x) because the "story" ends when those wells run dry.

* The Scalability Premium: With a 200-well inventory, the market applies a Growth Multiple (20x–25x). Investors will pay a premium today for the cash flows they expect in years 5, 10, and 15. This is the primary driver that pushes a 50p fundamental value toward that 100p target.

2. The "Self-Funding" Flywheel

This is where the math gets aggressive. In your scenario, 6 wells generate £14m+ EBITDA.

* If a new well costs £750k ($937k), MDH could theoretically drill 18 new wells a year using only its own spare cash, without ever asking shareholders for another penny.

* At that rate, reaching the 100-well mark would take less than 6 years.

3. "The Hub and Spoke" Valuation

With 100–200 wells, MDH wouldn't just be selling gas; they would likely own the dominant midstream infrastructure in that part of the Hugoton.

* Strategic Value: A company with 200 producing helium wells and its own purification plants becomes a massive acquisition target for major industrial gas players (like Air Liquide or Linde).

* M&A Exit: Often, 100p isn't reached by organic trading, but by a "Buyout Premium" where a major pays 30-50% above the trading price to seize the entire 200-well resource.

4. The Math of 100 Wells

If we scale your "Blue Sky" numbers (averaging the concentrations across the field):

* 100 Wells @ $500/mcf: We are no longer talking about £20m revenue; we are talking about £250m+ annual revenue.

* At that scale, a 100p share price (£235m Mcap) would actually look incredibly cheap (a P/E of less than 2x).

The Reality Check

The "Art of the Possible" says that if the 200-well potential is real, 100p is actually a conservative floor, not a ceiling.

The bottleneck won't be the money or the gas—it will be the operational speed: how fast can they get the rigs, the crews, and the permits to turn "potential" into "production"!

Ok so all I have assumed is things go to plan. Not added or taken away anything.

In which even “100p looks incredibly cheap!”

Usual caveats

Trek

£1 !!! lol!

Anybody else feel like reporting in the renewables section. There’s a feedback firm st the bottom of the article—-

What an absolute load of BBC left wing uniformed bllx!

And I have voted for them all over the years!

https://www.bbc.co.uk/news/articles/ce8pyyz5e0ro

Trek

MDH — amazing — and still v early. Have posted views there.

Off to see the puffins now! 5 hours of very easy pace walking and a coupe of picnics!

Trek

I think we should get an admission to trading RNS and that will probably be combined with a TVR.

Here’s a thing and it’s my guess work.

Becaus the sp has moved up considerable with the extra liquidity and we had volume post the placing RNS it indicates to me.

1. Balancing was done after the placing so sell shares in profit for some holders to cover purchase of new shares.

2. Some warrants were converted and likely exercised to provide funds to balance holdings

3 And now the new placing stock could well be sticky.

What that indicates it that further liquidity will likely come from the conversion of the 4p warrants. This goes back to the 6p 5 day vwap accelerator clause that Nick could have invoked earlier.

But the chances are he didn’t as he knew than (what we did not know) that he could invoke the accelerator clause when we list on AIM assuming 6p for 5 days.

Why? Because that will provide listing liquidity and take out the 4p warrants to raise extra cash or investors loose the warrants.

So this is imo as a min heading back to 6p near and after aim listing.

Those that got placing shares have probably worked this out as well so why sell now when 6p is very likely.

Yes I could say the sp will go much higher on Rost 2 acid frac results and flow rates. But I am just looking at it from a pov of the share capitalisation structure and timing of corporate events.

Rost 2 comes in at 5% and good flow rates then rocket imogi’s will be permitted or rather highly recommmended! lol!

Usual caveats

Trek

Lifted from RNS….

‘ The First Tranche of New Ordinary Shares is unconditional and will utilise existing share authorities with First Tranche Admission expected to occur on or around 8 May 2026.“

Now the directors and M3 vendors are considered a concert party — so subject to lock in and orderly market rules. That rules them out selling.

So it only really leaves HNWI - now they can forward sell but it’s a huge risk. Which is why I think any sales were likely of stock already held to balance any future holdings.

There are the risks selling after 30th April and before 8th May. This would be uncommon in this situation.

They are subject to a T+5 settlement which would fall after 8th May. Most brokers would not facilitate this. It would have to go through a house broker like OAK. This is because if the admission was delayed (it does happen) the sale would need to settle leaving financial penalties for the seller.

Also depending on individual, and this would apply more to HNWI, they would loose any EIS/VCT tax status. Loss of status can be a major barrier to some HNWI selling shares within 3 years.

So technically possible to forward sell but imo highly unlikely plus there is little potential upside from the risk. The sells went at close to 4p so why bother.

Agree to differ - nice to have different views.

Usual caveats

Trek

Hi NomadCane,

There’s a quarterly review —-

Here’s the forecaster

https://www.stockchallenge.co.uk/ftse.php

Usual caveats

Trek

Tro,

I was gonna post JD yesterday as a bouncy candidate— not exactly rocket science as bounced off bottom on the ME ‘news’ so was an Obc buy today.

But that one does usually run a few days.

Still I am away so bar some top up buys placed for MDH and EPP - not filled and likely missed! I am not playing atm. GL

Trek

Can I just say - as I do try and call it as I see it. We are not churning the placing shares as they havnt been listed. There may be some forward selling of existing shares to finance placing shares. But placing shares aren’t listed yet.

Here’s a brief outline of events….

30 April 2026: Announcement of the Placing and Subscription to raise £5 million through the issue of 125 million new ordinary shares at 4p each.

5 May 2026: Publication of the Circular and Notice of General Meeting (GM), which provides full details on the fundraise and the acquisition of M3 Helium.

8 May 2026: Admission of the "First Tranche" of the fundraise shares (81,683,425 shares) to the Aquis Stock Exchange, using existing share authorities.

14 May 2026 (10:00 a.m.): Deadline for submitting proxy voting instructions for the upcoming General Meeting.

18 May 2026 (10:00 a.m.): General Meeting (GM) and Shareholder Vote.Purpose: To approve the acquisition of M3 Helium and the issuance of the "Second Tranche" of fundraise shares (43,316,575 shares).

18 May 2026 (Expected): Completion of the M3 Helium acquisition following the shareholder vote.

Then assuming vote is past, RTO shares, director shares and options will likely be subject to a 12month lock-in and orderly market selling rules thereafter. So sales will be via the house broker.

The admission document will include an extensive capitalisation breakdown.

Been driving for 6 hours and my trades didn’t go through — where are the derampers when you need them!

Usual caveats

Trek

ATOM — I bought in. Been waiting for placing and then for it to go below 60p. Seems like 61p bottom. Will keep some back just in case.

Trek

Voting out now if anyone misses it.

Voted for all…

Trek

Oak Bloke….

One for GG who must be massively up by now! lol!

https://open.substack.com/pub/theoakbloke/p/dec-ades-of-performance?r=4zgkh3&utm_campaign=post&utm_medium=email

I might buy back in — more about timing some cash as fully invested atm.

That drop yesterday seemed overdone— should bounce soon if anyone fancies a trading nibble!

Average in and average out!

Usual caveats

Trek

Nom,

FSFL —

Sold that one last year in favour of FGEN.

I hold FGEN, UKW and TRIG in the renewables space.

Also have ENRG, SEIT & SEQI but they have limited UK exposure.

Been using AI lots to help and starting to wonder if the sector is becoming uninvestible— I am on ground floor on all of them but still concerned.

Being rational around the data is meaningless if sentiment is poor!

Trek

Been using it on MDH nom.

Like you say you gotta have an idea about what you are asking so that the answers made sense…

Here’s an example of a simple error. I asked it what angle the ‘tonka truck’ goes up on the ice field in Canada — we are going there on holiday.

So Gemini says 36 degrees!

Mrs Trek says wow! I said that’s impossible!

Obviously anything over 22.5 degrees will topple over. It must mean % gradient.

So then when I challenged it - it said oops 19-20 degrees that was the gradient! It got it wrong because the tourist blurb where it sourced its intel from said 36 degrees and gemini didn’t check!

There was another yesterday as well — it gave me a cheap price for car hire and I couldn’t get anywhere near it when the price came up. Turned out the offer it quoted was only available in the USA — so it missed the small print!

It’s brilliant for research but you gotta have an idea about what you expect back.

I have found it amazing for my theology classes — doing handouts building interact sessions— All sorts — save me so much time!

Trek

Hi Barnsley,

It’ll likely be anchored as a % of free cash flow — just an annual token gesture at first….

It’s more a signal of intent than income.

I used to hold AEO a high growth company that paid an annual dividend— before you know it it was 5% Pa then they introduced an interim!

So all things are possible but tbh -

I would rather they raced for that hundred wells and used all the cash to add assets quickly so that we get a better price on what I see as an inevitable takeover probably late 2027.

Usual caveats

Trek

(Read posts … oldest first)

….Admission document is released

Usual caveats

Trek

Best read my posts oldest first!

So let’s make it real and look at the projected revs this year if hit 7 wells on the analogous morrow sands!

With the £5 million fundraise approved, Mendell Helium (MDH) is shifting from a single-well operation to a multi-well production model. The second purification plant is the "multiplier" that allows this scale. [1, 2, 3, 4]

Based on the latest production updates, here is the projected cash flow outlook for 2026 and 2027:

1. Revenue Benchmarks (Per Well) [4]

The performance of the current Rost 1-26 well serves as the baseline for the upcoming 4-well drilling programme:

* Flow Rate: ~250 Mcf/day.

* Helium Concentration: 5.1%.

* Gross Revenue: Approximately $1.4 million (~£1.12 million) per year per well at a helium price of $300/Mcf. [5, 6, 7, 8, 9]

2. The Impact of the Second Purification Plant

A single purification plant at Fort Dodge is typically sized to handle up to four production wells. By constructing a second plant in 2026, the company can double its processing capacity: [1, 10]

* Target State: Moving toward 7-8 wells in total across Fort Dodge.

* Gross Revenue Potential: If seven wells achieve similar flow rates to Rost 1-26, the annualised gross revenue potential reaches approximately $9.8 million (~£7.84 million). [2, 5, 6, 10]

3. Operating Costs & EBITDA Margin

Production costs at Fort Dodge are reportedly highly economical due to the shallow nature of the wells (under 2,000 ft): [11]

* Electricity: ~$5,000/month per well site.

* Site Inspections: ~$1,000/month.

* Logistics: ~$500 per load to offtakers.

* EBITDA Projection: Analysts note that once the infrastructure is built out, helium production typically enjoys high margins (often 60-70%+) because the "lifting costs" are low relative to the high value of the gas. [12, 13]

Summary: The Road to Dividends

Mendell Helium has explicitly stated its goal to commence dividend payments in 2027, contingent on successful execution of this 2026 programme. [2, 14]

Phase [5, 6, 10]…. Est. Annual Gross Revenue…. Status

Current (1 Well)…. ~£1.1M…. Operational

Post-2026 (7 Wells)…. ~£7.8M…. Targeted

[1] https://www.investegate.co.uk

[2] https://www.londonstockexchange.com

[3] https://www.youtube.com

[4] https://www.share-talk.com

[5] https://www.aquis.eu

[6] https://www.investegate.co.uk

[7] https://www.investegate.co.uk

[8] https://en.igascn.com

[9] https://www.investegate.co.uk

[10] https://www.branduk.net

[11] https://www.aquis.eu

[12] https://www.investegate.co.uk

[13] https://www.branduk.net

[14] https://www.share-talk.com

And I haven't even included Jayhawk or the Snz dewatering and eventuall 300mcf production well at 1.9% helium!

How can you say this will stunt growth and sp? Those 4p warrants with the ops news will imo clear in no time because they are the primary source of liquidity— we will see the lock-in data that ties the M3 warrants and directors for 1 yr when the

Translate that to in ground value - Fort Dodge only! I have deliberately used 4p to anchor warrants and ignored the rest of the acreage - 5 wells!

Based on the updated Competent Person's Report (CPR) and recent analyst notes, there is a massive disconnect between Mendell Helium's (MDH) current Enterprise Value (EV) and the "in-ground" value of the Fort Dodge assets.

1. In-Ground Value Estimate

Recent calculations by analysts like Alan Green use a benchmark helium price of $300/Mcf to value the prospective resources at Fort Dodge. Based on the current CPR figures: [1]

Resource Case [1, 2, 3]…… Volume (Bcf)…… Notional In-Ground Value (GBP)*

Low (P90) 2.12…… ~£509 Million

Best (P50) 5.34…… ~£1.28 Billion

High (P10) 9.78…… ~£2.34 Billio

2. The Valuation Gap

If we compare these figures to your calculated £6.17 million EV (post-raise at 4p), the market is currently valuing the company at a tiny fraction of its potential resource:

* Valuation vs. P90 Resource: The market is paying roughly £0.01 for every £1.00 of helium estimated in the lowest-case (P90) scenario.

* Production Context: The flagship Rost 1-26 well is already producing at 5.1% helium, which is exceptionally high grade. This well alone is estimated to generate roughly $1.4 million in annual revenue at current flow rates. [4, 5]

3. Why is the gap so large?

In junior mining, "in-ground value" is always heavily discounted because:

1. Extraction Cost: Helium is not "free" to get out; it requires significant infrastructure (purification plants, disposal wells).

2. Probability: These are prospective resources, meaning they aren't "proven" reserves until the 2026 drilling programme (targeting 7 total wells) confirms them.

3. Market Liquidity: MDH is a micro-cap on the Aquis Stock Exchange, where lower liquidity often leads to deeper valuation discounts compared to major exchanges. [2, 3, 6, 7, 8]

Summary Table

Metric…… Value

Fully Diluted EV (at 4p)…… £6.17M

P90 In-Ground Value…… £509.00M

EV / In-Ground Value Ratio…… ~1.2%

The £5m raise is specifically designed to close this gap by funding the drilling of 4 additional wells and a second purification plant in 2026 to move these numbers from "prospective" to "producing". [2, 9]

[1] https://x.com

[2] https://www.share-talk.com

[3] https://www.londonstockexchange.com

[4] https://www.investegate.co.uk

[5] https://www.investegate.co.uk

[6] https://www.aquis.eu

[7] https://www.lse.co.uk

[8] https://www.ajbell.co.uk

[9] https://www.share-talk.com

Usual caveats

Trek