Helium One Global Ltd (AIM: HE1, OTCQB: HLOGF) shared a promising update on its extended testing of the Itumbula West-1 well in Tanzania. It also announced a major acquisition that expands the group’s geographic reach and, importantly, opens up the potential for near-term cash flow.
Starting with the test results: The exploration group successfully achieved helium flow with concentrations as high as 7.6%, averaging 786 barrels per day from the faulted Karoo interval.
Highlights:
· Conditional acquisition of a 50% interest in Blue Star’s Galactica-Pegasus project
· The Galactica project contains confirmed discovery wells in the region flowing up to 6% helium (average of 3%) as free gas and are well positioned close to existing helium infrastructure
· The Company’s internal gross resource estimates, assuming a P50 Helium concentration of 3%, are 675 million cubic feet
· Full development programme for the Galactica Project will require the drilling and tie-back of 15 wells, as well as commissioning of the relevant He and CO2 processing facilities
· Initial six development well programme planned for Q4 2024 which are expected to be on stream and producing in H1 2025
· Acquisition is in line with Helium One’s strategy to build a diversified helium company
· Tanzania projects remain the primary focus of the Company with Extended Well Test (“EWT”) currently ongoing at Itumbula West-1, a separate announcement providing an update on progress of the EWT has been released by the Company today (27 August 2024)
· £6.43 million (approximately US$8.2 million) fundraise via a direct subscription with Cynosure Capital PTY Ltd, with Marex Financial acting as the placing agent
During a five-day test period, the ITW-1 well averaged a helium concentration of 5%. It was also noted that as helium levels increased, hydrogen levels decreased, with a maximum recorded hydrogen concentration of 1.2%.
Chief Executive Lorna Blaisse expressed her satisfaction with the results, stating, “I am very pleased with the outcomes. This is a globally unique helium play, and it has taken significant effort and collaboration across multiple disciplines to understand how this system operates in the southern Rukwa Basin.”
Looking ahead, the company plans to conduct a second extended well test, this time focusing on the fractured basement horizon of the well.
In a separate announcement, Helium One revealed plans to acquire a 50% interest in Blue Star Helium’s Galactica-Pegasus asset in Colorado, which is listed on the ASX.
Located in Las Animas County, within a known helium-rich area in southern Colorado, the project features discovery wells producing up to 6% helium and is conveniently located near existing infrastructure.
Galactica-Pegasus is estimated to contain 675 million cubic feet of helium at an average grade of 3%, based on a P50 estimate.
The full development program envisions 15 wells and CO2 processing facilities, with work on six wells planned for the fourth quarter, expected to come online in the first half of next year.
To fund these initiatives, Helium One has announced plans to raise £6.43 million at 1.09p per share.
CEO Blaisse commented, “We are very pleased to have entered into this partnership with Blue Star, which allows us to expand our global presence in the helium sector at such a crucial time. Our projects in Tanzania remain our primary focus, but this opportunity enables us to potentially secure near-term cash flow to support the advancement of our Tanzanian asset. We now have two potential near-term revenue-generating projects in our portfolio.”
