Nick Tulloch, CEO of Mendell Helium, joins StockBox to unpack a major operations update. The Rost well in Kansas is set for production by June, backed by an offtake agreement with Scout Energy—America’s second-largest helium producer. Nick explains the updated $8M Hugoton farm-in deal, now nearly self-funded, and reveals plans to harness waste methane for Bitcoin mining.
Key Highlights:
- Rost well to produce high-pressure helium
- Strategic partnership with Scout Energy
- $8M Hugoton deal restructured with minimal upfront cost
- Innovation: Using methane waste to mine Bitcoin
Cryptocurrency
Mendell Helium is working on a feasibility study to use the excess methane produced at either the Rost well or future offset wells in the same area to provide energy for a cryptocurrency/Bitcoin mining operation. This work is at a very early stage but, if successful, could see the Company install a gas-powered generator and computer at a well site. A significant advantage of Rost is its very close location to the main road meaning that communications and logistics are relatively straightforward.
Based on comparator studies, the Company’s preliminary estimates indicate that this project, if successful, would pay back in a little over one year. It would also provide a solution for methane which would otherwise be a waste product of M3 Helium’s production at Rost or other offset wells. There can be no guarantee at this stage that the feasibility study will determine a viable project and further announcements will be made in due course.
The Company is carefully managing its limited working capital position.
Nick Tulloch, Chief Executive Officer of Mendell Helium and Chairman of M3 Helium, said: “We have been clear with shareholders for some time that the opportunity to bring Rost, M3 Helium’s 5.1% helium composition well, into production is significant. Even on conservative estimates, this well has the ability to cover all of M3 Helium’s G&A and provide funds for ongoing development.
“This week’s agreement in principle with Scout Energy on a helium offload for all Rost production is the final preparatory step and an excellent result. We have been successful in agreeing a helium sale price some way ahead of our own modelling, thereby increasing the potential profitability of the well. But, even more importantly, M3 Helium’s arrangement with Scout Energy to substantially fund its previously announced Hugoton farm in from Rost production dramatically changes the economics of that project too. We will be able to settle M3 Helium’s obligations to Scout Energy out of payments made to M3 Helium by Scout Energy.
“We are also pleased to welcome Alex Clem, a former Scout Energy Business Development Engineer and Senior Operations Engineer, to our team. His connections and knowledge of Kansas operations, including the Hugoton gas field, are self-evident as is his expertise in valuing and developing producing assets. The successes we are reporting today show how we continue to benefit from the ongoing relationship with Scout Energy.”
