It is uncommon for a natural resources company to transition from exploration to production to cash generation within 18 months of going public.
Yet, Helix Exploration PLC appears to be achieving precisely that after its listing in April last year.
Under the leadership of CEO Bo Sears and Chairman David Minchin, the company has rapidly demonstrated the commercial viability of its helium assets in Montana.
The company raised £5 million in January to accelerate the development of its flagship Rudyard Project, where it has already drilled its first well.
The Darwin #1 well uncovered a 236-foot gas column, producing 2.75 million cubic feet daily with a 1.1% helium concentration—well above the commercially viable threshold of 0.5%.
Helix Exploration Eyes Strong Cash Flow as Rudyard Project Advances
Each well at Rudyard has the potential to generate approximately $4 million in pre-tax cash flow per year, with the site capable of accommodating 8 to 12 wells.
The primary challenge is funding the drilling program quickly enough to scale production. However, with each well costing only $1.2 million to drill, the company plans to self-finance expansion using early cash flow.
A crucial part of this strategy is the processing plant, which CEO Bo Sears acquired at a low cost of $500,000. The final step before production begins is securing a membrane system to separate the helium. With these components in place, production is expected to start by early summer.
Rather than committing to a long-term, fixed-price contract, Helix is taking a flexible sales approach, engaging multiple buyers to maximize pricing opportunities.
“We are gathering off-takers right now,” says Sears. “I don’t think we’ll have too many issues with that.”
Beyond Rudyard: The Ingomar Dome Project
While Rudyard remains the top priority, Helix is also advancing its Ingomar Dome Project, another promising helium asset in Montana. Engineers will soon acidize the Clink #1 well, a process designed to clear near-wellhead blockages before testing the Charles Formation.
A second target, the Flathead Formation, may be tested later in the season. This layer is believed to hold some of the highest-grade helium deposits in the U.S.
The 16,512-acre Ingomar Dome site is estimated to contain a prospective resource of 2.3 billion cubic feet of gas, with a net present value (NPV) of $304 million.
Strong Financial Potential
For now, Rudyard remains the company’s primary focus, given its significant financial potential. Helix estimates that additional production wells could generate $15 million to $25 million in free cash flow annually, reinforcing its ability to self-fund future growth.
Helix is on track to become one of the fastest pure-play helium exploration companies to progress from its IPO in April 2024 to first gas by the second half of 2025—a feat that has taken many of its peers two to three years to achieve.
The speed of this development is impressive. When Helix listed just 10 months ago, its timeline seemed ambitious, yet CEO Bo Sears and his team have consistently met every milestone.
Since debuting at 10p per share, Helix’s stock has surged 180% (52-wk high 29.00) July 2024, making it one of 2024’s most successful IPOs. Investors will now be watching closely to see if the company can sustain this momentum through 2025 and beyond.
