HeLIX Exploration PLC (AIM:HEX, OTCQB:HHEXF) CEO Bo Sears talked with Proactive about the company achieving a major milestone: becoming the first helium producer in the state of Montana.
Sears addressed the market reaction to the production news and put the achievement into perspective, highlighting the speed of execution since IPO and talking through the company’s strategy and progress with off-takers.
Proactive: Bo, congratulations on production. But the stock is down nearly 10% today. What's going on?
Bo Sears: Well, Stephen, thanks for having me on. I think some of that pre-production news had already been baked into our stock. But I want to put this into context. First, we are the first producer in the entire state of Montana. That is a milestone in itself. Secondly, from IPO in April 2024 to today, that’s 22 months. Not a single publicly traded helium explorer has done what we have done. Compare that to our peers. This is an incredible milestone for the company, and we couldn’t be more excited that we have moved as quickly as we have.
Proactive: Now that production has started, what's the strategy for offtake agreements and why were these not finalized ahead of production?
Bo Sears: That’s a great question. The helium exploration world is essentially a graveyard of folks that promise and don’t deliver. It has always been our mandate to get into production and then enter into those offtake agreements. It’s important to do it this way because the off-takers want to actually see that helium is coming out of the plant in pure form. Before all of this, we have talked to several off-takers. Now we will have off-takers on site over the coming weeks and start selling helium. It’s quite an exciting movement.
Proactive: Can you share details on the quality of helium being produced at Rudyard? What’s the purity and how does it compare to industry standards?
Bo Sears: It’s going to be ultra-high purity helium. The plant was designed for five-nine purity helium — 99.999% pure — and that’s what we’re going to get. You can sell helium at various stages of purity. Balloon grade is about 98% pure. Ultra-high purity opens up our market even further. This is a stellar plant. We’ve had a stellar team in Wikota Design & Construction LLC and Nu Wave Services helping us. We’re really excited about the quality of helium being produced.
Proactive: What is the current and expected field output from the three producing wells, and how might this change as you scale up?
Bo Sears: Right now we have three wells tied into the plant and the gathering system built. We are expecting production of about 1,500 Mcf per day to start at a prudent flow rate. We will tie in the Inez well shortly. That should max out the plant at about 6,000,000 cubic feet of input gas per day, equivalent to about 65,000 cubic feet of helium per day. That represents significant revenue potential.
Proactive: What happened at Inez? The ‘snapping off’ sounds serious?
Bo Sears: It’s not as serious as it might sound. We were drilling through a very small diameter pipe and sometimes the drill string twists off from the drill collars. We’re going to go back in and fish those out. Importantly, this had no effect on our helium production zone and does nothing to impact hydrogen prospectivity. Both are intact. We just need to retrieve the equipment and will return to it after completing plant requirements.
Proactive: Bo, congratulations again on this milestone. I hope you'll keep us updated.