Helium One Global (AIM: HE1), the primary helium explorer in Tanzania, is pleased to provide the following operational and financing updates.
Highlights
· Replacement iron rough neck for the Epiroc Predator 220 drilling rig purchased and currently being mobilised from the USA; installation expected to be completed within three weeks
· Hydraulic and electrical maintenance and repairs currently nearing completion
· Civils work at the revised Itumbula well pad (West-A) now complete and rig successfully rigged down from Tai-3 and moved to Itumbula
· Spud of Itumbula well now anticipated to be early January 2024; targeting a large, deep seated basement fault and additional play concept
· Site personnel reduced to minimise costs during rig maintenance and repair period
· A cost analysis and budgeting exercise in relation to Itumbula well indicates a need for further funding and the Company is in positive and advancing discussions with a number of investors
Rig Maintenance and Drilling Operations
The Company has now successfully purchased and mobilised a replacement iron rough neck from the USA. This new item will replace the existing iron rough neck component on the Company’s Epiroc Predator 220 drilling rig and is expected to arrive on site, at the Itumbula well location, and to be installed within the next three weeks.
Over the past two weeks, a specialist Hydraulics Engineer has been reviewing the hydraulic system of the drilling rig and the Company is confident that these issues have now been rectified.
Following rig down at Tai-3, the rig itself and all associated equipment (including the substructure and the pipe skate), have now been successfully moved to the Itumbula lay down area, located approximately 1.2km from the Itumbula well pad. It is at this location that the remainder of the rig maintenance and repair work will be completed and the rig will then be moved the short distance to the new Itumbula well pad.
Itumbula prospect: revised well location and drilling programme
Following the positive drilling results from the Tai-3 well, and the increase in concentration of helium encountered in the fault and fractures close to Basement, the Company has subsequently reviewed the geology of the Itumbula prospect. It is bounded by a large, deep seated western fault which extends into the Basement source rock. It is this fault that is interpreted to be associated with the active surface helium seep 3km away.
With the results from Tai-1/-1A and Tai-3 suggesting that it is the migration of fluids that play a crucial role in liberating the helium out of the Basement source and along fractures and faults, the Company has now elected to target the western bounding fault at Itumbula as a primary target. Therefore, the Itumbula well has been designed to directly target this new fault play where the Company anticipates helium concentrations to be significantly elevated.
The Company now expects to spud the Itumbula well in early January 2024; we anticipate the drilling programme to be completed within 30 days.
Funding update
Having successfully moved the rig to Itumbula and, following the identification of the new Itumbula well, completed the new well pad civils work in readiness for drilling, the Company has undertaken a full cost analysis and budgeting exercise in order to ensure that, once spudded, the Itumbula well can be successfully drilled as planned. In undertaking this costing exercise the Company has been cognisant of the contingency funding that may be required given the significant additional costs and time delays encountered during the drilling of Tai-3.
Having completed the costing exercise, the Company has identified a need for additional funds before Itumbula can be drilled. In addition, the Company is in receipt of a number of unsolicited approaches from potential investors and, in light of the findings of the costing exercise, is advancing these discussions while also assessing other financing options. The Company is confident of securing the additional funding in the near future so as to realise the cost synergies of avoiding a delay to the drilling of Itumbula and will provide an update in due course.
Lorna Blaisse, Chief Executive Officer, said:
“The team has worked exceptionally hard to find a resolution to the rig maintenance issues and we are delighted to now be well on the way to completing this, having sourced and mobilised the replacement parts to site so quickly. The rig upgrade and repairs will provide us with a better platform for future drilling activities.
The well results from Tai-3 have enabled us to better understand the established helium system in the Rukwa Basin and we look forward to being able to utilise these findings and drill the fault play at Itumbula as soon as possible.
The Company is advancing discussions with potential investors while also assessing other financing options and is confident of securing additional funding in the near future.”
