It’s still a relatively complex matter getting around the globe in these virus-ridden times, but for Minchin the trip was a no-brainer in the light of Helium One’s recent and early drill success.
“It was at 70 metres and we’d only been drilling for an hour and a half when we got this gas flow,” explains Minchin.
He’d been following the on-site logging remotely on his laptop and was somewhat unprepared for what he now saw coming through – a showing of gas coming up in the drilling mud grading upwards of 2.2% helium.
As it stands, the showing in the drilling mud represents a commercial grade of helium on its own. However, there’s a strong likelihood that dilution occurred as the gas was brought to the surface and that the actual in-situ grade will be significantly higher.
That’s a matter for a later date, though.
What really matters now is that Helium One - almost as soon as the drillbit hit the rock - has delivered proof of concept.
“It shows for the first time that we have a subsurface reservoir trap that works,” says Minchin.
“It’s at shallow depth and indicates that the system works. It broadens the prospectivity of the entire basin.”
Where once helium was only hypothesized, now it’s known to be physically present.
It’s a huge step, especially given that the current well is continuing on down for a further 1,000 metres. In the context of a gas showing in the first horizon of the first hole, there’s now plenty of grounds for optimism that further gas showings will be encountered.
“The fact that we have a helium show and it’s right at the top of the sequence is highly significant,” says Minchin.
“The implication is that it goes all the way down.”
It’ll be around three weeks before we know for sure, and the current well is complete. After that, the drilling will turn to two other prospects, and the hope is that at the end of the programme, which will also include an appraisal well, Helium One will be able to put together a maiden reserve.
How big that will be is still a subject for conjecture, but early hypothesizing has it that Helium One’s Tanzanian portfolio may contain the largest primary helium resource in the world, pegged at a preliminary 138bn cubic feet.
The current drilling will take us a long way towards establishing whether these initial hopes are well-founded or not, and the early helium show has certainly set an encouraging precedent.
In the event of success, Helium One is already looking ahead to next steps. The company is well embedded in Tanzania, and enjoys significant support both at local and at governmental levels. The project will have only a very slight environmental impact, and physically won’t cover much ground.
Perhaps more significantly, if the project is as big as the early estimates suggest, then it will put Tanzania on the map as one of the most significant producers of helium in the world. That’s an aspiration the government of any country anywhere might have, and in that context it’s hardly surprising that government support is forthcoming. It doesn’t hurt, either, that the President has been in office only a few months, and that fresh ideas are currently at a premium.
If Helium One can indeed prove up the world’s largest primary helium resource, the thinking is that it will take less than US$100mln to develop it, perhaps even as little as US$80mln. That doesn’t look like such a stretch for a company that’s already capitalised at £148mln.
The aggressive timeline which aims at first commercial production by the end of 2023 will help too.
All told, this is a company that’s on the move, and it’s hardly surprising that the shares have jumped by more than 20% in the past couple of days.