Is the drill rig drought ending for Helium One?
“…the rig market now is completely different to a year ago with much more availability. We are in a strong position. We have warm leads from last year. Being fully funded for drilling, operators want to talk to us and many indeed have made contact as they have rigs available…”
For one drill rig contract to turn into a proverbial duster is forgivable, but for it to happen twice is more than a little uncomfortable.
Helium One could not have predicted that its first drill rig ‘Predator’ would become embroiled in legal complications, or the back up and preferred Exalo rig expected for duty in Quarter One, would unexpectedly be unavailable due to its current contract being extended.
The disappointment of losing a second rig was a bitter blow, but according to chief executive David Minchin all is not lost for the Tanzanian helium explorer. He says the macro outlook for drill rigs is much more positive this year with supply less constrained than in previous years, and since the market was made aware of another drill rig disappointment Helium has had “a great many companies “contacting the company and Minchin says “our long list of rigs is looking incredibly healthy.”
Minchin is confident about a drilling campaign sometime this year. He stresses how low risk his Rukwa Project is. It is fully funded after an oversubscribed placing, the environmental and import permits remain valid, Tier One energy firm Baker Hughes is still on for supplying integrated services and the relationship with the government remains strong.
Those are all variables. The project though is the constant.
“We have a high grade primary Helium 50 to 200 times higher grade than anything currently in production. We have a robust structural closure with the three way faulted closure, which has got all the potential to make a world class discovery and unlock an entire helium province,” says Minchin who adds “the geology of our projects makes us strategically significant in bringing back new supply into production.”
Tantalisingly, he tells Sarah Lowther that other operators are keen not to have their own drill rig disappointments and discussions are underway to create a Tanzanian Buyers Club that would see members split services and the rig, though Helium One investors would hope that the company gets first dibs if this becomes a reality.
Watch the company’s most recent technical presentation featuring David, principal geologist Lorna Blaise and drilling superintendent Mike Williams
Access the company’s latest corporate presentation
Follow the company on Twitter @Heliumone1
The author was remunerated but does not hold shares in the company
