Helium One Global Ltd's (AIM:HE1, OTCQB:HLOGF) new helium project, Galactica Pegasus, in Colorado, gives the explorer clear growth potential, that’s according to Panmure Liberum analyst Ashley Kelty.
The company this week confirmed the completion of its farm-in to the Colorado project where multiple wells are planned, with drilling slated to start before the end of this year.
Panmure Liberum, which has a ‘buy’ recommendation for the explorer, sees the potential for the exploration company to transform its valuation – with the broker’s target price pitched at 3.6p versus today’s price of 0.85p.
“The [Galactica Pegasus] project is advancing, with a phased development plan in place that could see initial production before the middle of 2025,” analyst Ashley Kelty said in a note.
“The initial phase of the project will see six new development wells, followed by a second development phase with 9 wells. Internal estimates suggest the potential helium resource could be 675mmcf (gross).”
Kelty added: “The completion of the farm-in opens up a path to production in the near term, and with a ready market for helium located across the US, we would anticipate maiden revenues next year.”
Following the farm-in, the broker has increased its estimated chance of commercial success to 33% from 25% and also lifted its price target to 3.6p from 3.44p.
Helium One yesterday announced the completion, with chief executive Lorna Blaisse commenting: “We're very pleased to have completed this agreement with Blue Star and anticipate positive results from the upcoming development wells as the project advances into the production phase.
“This project provides Helium One with the opportunity to diversify its helium portfolio and benefit from production and revenue from its first helium gas in the first half of 2025.”