A NEW feature from #TMStalks
“…ask the analyst…”
This week we cover Helium One Global Ltd
“…It’s actually quite remarkable what the management team has managed to achieve here. If you look at the North Sea, for example, it took 40 odd wells to make commercial discovery. They’ve managed to float helium to surface here in three wells. It’s significant…”
That’s the opinion of Liberum Capital’s new energy analyst Sam Wahab about Helium One’s progress across its Tanzanian prospects.
In his research note he reiterates the not insignificant figure of 4.7% which relates to the flowing concentrations of helium to surface at the company’s Itumbula West-1 well. That, he says, could represent ‘a world class discovery.’ He also reminds readers that Helium One has found pure helium which contrasts with larger industry players who have found impure helium often associated with hydrocarbons. “It costs more to pull those two commodities apart,” says Wahab and that pulling apart process “doesn’t really tick that ESG box.”
Helium itself may be number 2 on the periodic table, but in the grand scheme of things, its discovery in 1868 makes it a relatively recent elemental find. The requirement for this nobel gas in 2024 however is increasing exponentially.
“It’s going into some major infrastructure, whether that be in medical appliances or technology.” stresses Wahab. “An increasing part of the world we live in is artificial intelligence and that’s only going to grow. That requires data centres, which again requires helium. So, I think the price will continue to be tight and Helium One can capitalise on that with commercial volumes of helium.”
The company’s extended well test at Itumbula in the third quarter of 2024 could determine whether and how Helium One can commercialise what it has. The hope is that what is has is a consistent concentration of 4.7% and that it’s plentiful.
Conditional upon these results, Wahab says, the company will then be able to advance discussions with off-takers and industry partners and consider designs for a potential production facility. “If they can prove up Itumbula and indeed Tai, I wouldn’t see any shortage of admirers for a company like Helium One.”
In terms of the price the gas could command, Sam explains to Sarah Lowther in this video how the gas is priced and how he has calculated the target price for the company’s share price.
Read Sam’s March 2024 research note on Helium One
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For regular video updates on Helium One follow on @Heliumone1
Helium One was featured as one of our companies to watch in 2024
The author was remunerated but does not hold shares in the company
