HeLIX Exploration PLC (AIM:HEX) is stacking up value catalysts in Montana, where it is now drilling its next well – while waiting for test results at its flagship Ingomar Dome helium project.
The company, which has quickly become a popular AIM stock since its April IPO, is advancing its interests in Montana’s ‘helium fairway’.
Today, it started drilling the Darwin well at the Rudyard project.
At the Ingomar Dome project, meanwhile, the Clink well is being tested after it was deepened by Helix earlier in October.
In London, Helix shares are up some 125% since its IPO which was priced at 10p, raised £7.5 million and at that time valued the explorer at around £12 million.
Today, on AIM, Helix is valued closer to £30 million.
With results incoming from two separate wells in the coming weeks, the company has the catalysts to finish 2024 on a further high.
Clink well at Ingomar Dome
News that Helix has started drilling a new well comes less than a week after it told investors that it was ready to test the Clink well at the flagship Ingomar Dome project.
At Clink, the firm is running cased-hole wireline and testing from the bottom upwards. Subject to results, it's planned that an extended well test will follow.
Any gas recovered during this process will be sent to an external laboratory for composition analysis. If initial results are promising, the company will advance to an extended well test.
The Clink well is testing multiple targets and notably follows encouraging prior results seen in the Amsden, Charles, and Flathead formations.
“This is where we’ll see what kind of production we can get out of the well, and it’s a key phase for us,” chief executive Bo Sears commented in an interview last week.
Helix chair David Minchin, meanwhile, talked Proactive through the Clink programme.
Helix Exploration chair David Minchin tells Proactive that a discovery could be announced in a matter of weeks as testing advances at the Clink well, in Montana. #helium #montana #clink #darwin #helix #GasDiscovery #Helium #exploration pic.twitter.com/blMZydn7Pi
— Proactive (@proactive_UK) October 30, 2024
Darwin well at Rudyard project
Drilling is now underway at the Rudyard project, with the bit turning in the Darwin well.
Darwin is targeting ‘stacked’ reservoir structures within the Souris River and Dry Creek intervals, both of which are known for their helium potential.
Tests in past in this area have returned helium values as high as 1.3%. Estimates have pitched the P50 Gross Contingent Resources at 484,193 Mcf within the Souris and Red River zones.
Drilling is expected to last around two to three weeks. Helix intends to conduct wireline logging and, subject to results, undertake extended flow testing.
The Darwin well may also be cased for production, to allow further testing in the future.
Rapid progress since IPO
Clink and Darwin are two targets in Helix’s portfolio focused on helium exploration and development across the ‘Montana Helium Fairway,’.
Helix holds 52 leases in this ‘fairway’, including the Ingomar Dome project.
Montana is a mature oil and gas basin, and according to experts, that makes helium exploration and development easier and lower cost than would otherwise be expected.
Helium’s scarcity and the US’s position as a global swing producer means that there is “perpetual excess demand, generating upward pressure on pricing”.
While the helium market is opaque, observations earlier this year from the US Geological Society placed helium conservatively at $420 per thousand cubic feet, but open market and surge pricing can push that figure closer to $1,000/mcf.
The Ingomar Dome project was valued at $303.1 million (NPV) in a scoping study report, in June, with the initial capital requirement of less than $20 million – with the project expected to generate in excess of $600 million after CAPEX, OPEX, tax, and royalty over a 29-year mine life.
Also in June, the Rudyard project acquisition further sweetened the proposition for investors.
Now, evidently, Helix promises a busy and exciting end to the year for its investors.