Helix Exploration PLC (AIM:HEX) earlier this week provided an update on its ongoing projects, including its helium exploration at Ingomar Dome and the commercialization of the Rudyard project.
David Minchin, Helix chair, in an interview with Proactive, discussed its Clink #1 well where it is acidizing the Charles Formation, a cost-effective and capital-efficient approach to testing for helium potential.
Helix Exploration recently secured a £5 million placing, ensuring full funding for Rudyard’s production while also allocating excess capital for growth and potential acquisitions.
Minchin highlighted that, while the company remains focused on Rudyard - which is expected to generate between $15.00 million and $25.00 million in cash flow annually - the Ingomar Dome presents significant upside.
Here, we take a closer look at what was said in the interview.
Proactive: Joining me is Helix Exploration chairman David Minchin.
David, very good to speak with you. You've announced that you're re-entering the Clink #1 Well at Ingomar Dome in the next couple of weeks and starting an acidisation process. Could you tell us more about that?
David Minchin: That's right. While our recent focus has naturally been on the rapid commercialization of the Rudyard project - where we have a discovery in place and are looking to generate between $15 million and $25 million in cash flow per year - we've not forgotten the huge upside represented by Ingomar Dome.
We’ve seen really exciting helium and hydrogen indications from the Clink #1 Well.
With the completion of a non-discounted £5 million placing, we are fully funded to take Rudyard into production while also having excess capital for growth projects and M&A.
We are acidising the Charles Formation at a very low cost, which is a highly capital-efficient way of testing its potential for helium at the Ingomar Dome project.
Proactive: Why are you testing Clink and not the Flathead Formation?
David Minchin: There's a very simple tactical reason for that. The Charles Formation is a limestone, and limestone reacts very well with hydrochloric acid.
The Flathead Formation, on the other hand, is a quartzite. Quartzite cannot be stimulated with hydrochloric acid—you need hydrofluoric acid (HF) instead.
Hydrofluoric acid is a much more aggressive chemical. Given the additional complexities of using it and the high costs of deploying it in winter, we decided to postpone any testing on the Flathead Formation for now. We will reconsider it in Q3, once conditions are more favourable and we have results from the Charles Formation.
At Clink, we intersected the Flathead Formation quite a long way down dip and very close to the Sumatra Thrust fault. Ideally, we would prefer to be a couple of kilometers further west.
There are several ways to get back into the Flathead, such as drilling another well to test it up dip. However, conducting an acidisation in the middle of winter with hydrofluoric acid is not a cost-efficient approach.
Proactive: As you mentioned Rudyard, you recently upgraded the helium reserves there and the economic estimates. What are the next steps for Rudyard?
David Minchin: Yes, we continue to advance the Rudyard project. The plant is currently at the Kota site.
We have engaged in discussions regarding the supply of a membrane unit, which will be installed ahead of the plant and is expected for delivery in Q2.
Additionally, we have progressed with permitting and have started surveying for two more production wells, which are also scheduled for Q2.
We are moving ahead with our production targets, and it’s a really exciting time as we transition into positive cash flow this year.
Proactive: David, I hope you'll keep us posted on the progress of both projects. Thank you very much for the update today.