Mendell Helium Plc Regulatory News (MDH.PL)

Mendell Helium plc

("Mendell Helium" or the "Company")

Operations, Rost well & Loan Facility update

Mendell Helium is pleased to provide an operational update on M3 Helium Corporation ("M3 Helium"), along with a further update on the loan facility extended to M3 Helium previously announced on 7 April 2025.

As announced on 27 June 2024, the Company has an option (the "Option") to acquire M3 Helium, a producer of helium which is based in Kansas and holds an interest in nine wells. There is no certainty that the Company's option to acquire M3 Helium will be exercised, nor that the enlarged group will successfully complete a re-admission.

Rost well update

A rig has been commissioned and is expected to arrive on site at M3 Helium's Rost 1-26 well ("Rost") during the course of this week. This is the first step in the recompletion of the Rost well to bring it into production.

The Rost recompletion project will test the target reservoir of Cherokee age, at a depth of 5,000 feet, known locally as the "Morrow" formation. This represents a thick, water saturated sandstone approximately 46 feet thick.

In 2022, the original developer of Rost conducted a drill stem test which yielded a maximum flow rate of approximately 2,900 Mcf per day. Gas samples taken during the test, and then subsequently by M3 Helium, indicated a helium composition of 5.1 per cent. within the gas stream. Despite these positive results, the original developer was discouraged by the need to de-water Rost in order for production to commence and the opportunity arose for M3 Helium to take over these operations.

M3 Helium owns both Rost and the nearby Brobee salt water disposal well ("Brobee SWD") which was plugged in 2013. M3 Helium intends to re-enter the Brobee SWD for use as a disposal well for Rost, with work commencing following the arrival of the rig on site. Multiple zones are present in the Brobee SWD including the ability to dispose of produced water on a vacuum at the lower zones and with the upper zones likely requiring a feed pump. M3 Helium estimates that initial water production from Rost could be in the range of 1,000 barrels per day and the Brobee SWD will be able to accommodate several times that level, meaning that it could in time also be suitable for servicing future offset wells from Rost. With a disposal well in place, de-watering a production well is economical.

M3 Helium has budgeted a total capital expenditure of US$400,000 for the Rost recompletion project, of which around half of that amount is expected to be applied to make the Brobee SWD ready for disposal operations and half is estimated to get Rost itself ready for production operations, the latter comprising principally the installation of a higher capacity pump and connecting the on-site helium processing plant. The project is fully funded from the placing and subscription (the "Fundraising") announced on 7 April 2025.

M3 Helium has already installed a pressure swing adsorption ("PSA") unit at Rost which is capable of processing up to 800 Mcf per day of raw gas and purifying it up to 99.999% helium. The exact on site purification will be determined when operations start once the efficiency of the PSA is compared with costs of transporting lower helium concentrations to a processing plant for onward purification.

As previously announced by way of illustration, operating Rost at around one third of the PSA's capacity is expected to generate revenues for the Company in excess of US$100,000 per month but further upside is possible based on an improved helium price since the Company conducted this feasibility study.

In time, and if production at Rost exceeds current estimates, further investment in on-site helium processing could increase helium production from the well or potential offset wells. It should be noted that Rost is positioned just a few metres off a paved road and has access to 3-phase power meaning that both access and operations are straightforward.

Further announcements will be made as the Rost recompletion project progresses.

M3 Helium loan facility

Since the grant of the Option, and pending its exercise, Mendell Helium has funded the development of M3 Helium's operations through a loan facility to M3 Helium. The loan facility has been prepared on the basis of an arm's length commercial agreement between Mendell Helium and M3 Helium for a term of up to one year. The loan facility bears an interest rate of 6 per cent. per annum. As at 31 March 2025, being the Company's financial year end, US$510,000 had been drawn down under the loan facility. Further to the Fundraising and the Rost recompletion project, the Company has increased the loan facility by an additional US$490,000 and the available amount that may be drawn down has now increased to US$1 million.

Nick Tulloch, Chief Executive Officer of Mendell Helium and Chairman of M3 Helium, said: "The importance of Rost to M3 Helium and the Company is self-evident. This high pressure well with its high helium composition provides an opportunity to deliver meaningful revenues within the near term. Work is targeted to begin next week on the disposal well and, based on the progress made there, we expect to be in a position to develop a timetable to production in the coming weeks. We are fully funded to develop what could be one of the most exciting helium opportunities in Kansas."

This announcement contains inside information for the purposes of the UK Market Abuse Regulation and the Directors of the Company are responsible for the release of this announcement.

ENDS

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Overview of M3 Helium

Mendell Helium, formerly Voyager Life plc, announced on 27 June 2024 that it has entered into an option agreement to acquire the entire issued share capital of M3 Helium through the issue of 57,611,552 new ordinary shares in Mendell Helium to M3 Helium's shareholders. The exercise of the option will constitute a reverse takeover pursuant to AQSE Rule 3.6 of the Access Rule Book and is subject to, inter alia, publication of an admission document.

M3 Helium has interests in nine wells in South-Western Kansas of which five (Peyton, Smith, Nilson, Bearman and Demmit) are in production. Eight of the company's wells are within the Hugoton gas field, one of the largest natural gas fields in North America. Significantly these wells are in the proximity of a gathering network and the Jayhawk gas processing plant meaning that producing wells can quickly be tied into the infrastructure.

The ninth well, Rost, is in Fort Dodge and was tested in July 2024 as containing 5.1% helium composition. Unlike the Hugoton, Rost is not within direct access to a gathering network but M3 Helium owns a mobile Pressure Swing Adsorption production plant which has been installed on site and will be used to purify the produced helium. The plant is capable of processing up to 800 Mcf per day of raw gas and purifying it up to 99.999% helium.