HeLIX Exploration PLC (AIM:HEX, OTCQB:HHEXF) said it has agreed to acquire Montana-based Treasure State Drilling LLC in a US$600,000 all-share deal that gives it direct control of the rig used across its Rudyard helium project in Montana.
The AIM-listed helium developer said the acquisition would remove contract day rates, mobilisation costs and demobilisation costs from future drilling at Rudyard once the deal completes. TSD’s rig is already on site and has drilled all four of Helix’s existing production wells.
The consideration will be satisfied entirely through the issue of new Helix shares, priced by reference to a 20-day volume-weighted average price from the date of signing. Helix said the price represents a 37% discount to an independent equipment appraisal of US$955,900.
TSD’s Cardwell KB-150 rig is rated to 8,000 feet, which Helix said is suitable for the Souris and Red River target formations at Rudyard. The package includes an 800-horsepower Emsco mud pump, two Bomco F-1000 mud pumps, dual generator sets providing more than 1,300 kilowatts of power and more than 22,000 feet of drill pipe inventory.
Chief executive Bo Sears called ownership of the rig “a game-changer” for Helix, adding that future wells would be drilled “without a day rate invoice and without a mobilisation bill”.
Helix said TSD may also be used as a commercially independent drilling subsidiary and hired out to regional operators when not required for the company’s own programme, though it stressed that no third-party contracts have yet been entered into.
