Excellent upcoming catalysts for First Helium! First helium signed an off-take agreement in May 2023 with plant construction anticipated to begin early 2024.
A little background on the company since it became public in July 2021.
During the course of 2022, First Helium has drilled 2 successful oil wells which has provided $12million of revenue to the company. This paid off both oil wells ($5million) and also contributed to acquiring additional lands and 3D seismic of their lease holdings.
Other 2022 accomplishments
- Built an oil battery(oil storage)
- Owns 43km of Natural gas pipeline
- Roads and critical infrastructure are in place
- Has helium wells ready to be put into production
- Secured a permit for a dewatering well
During the course of 2023 the two oil wells ran into some issues with watering. Barrels per day of oil dropped substantially. Currently producing 34barrels per day which translates to $1.5million of gross revenue per year. This is good enough to pay the bills but that's about it.
Off take agreement signed in May 2023 - Projected 5 year revenue from this helium off-take agreement is $100million
Oct. 2023 - Capital raise of $2.5million to drill another oil well in a "proven untapped pool" 3D seismic shows the same thing as the other oil wells.
First Helium management and insiders are investing $1million(possibly more) of their own money into the company at 10c/share with warrants exercisable at 20c/share(Those will bring in an extra $5million to the company)
Share pool is still low. After the current private placement, First helium will have 112million shares currently on the market(25million more warrants can be exercised at 20c and 12million more at 35c. Fully executed these warrants will generate an addition $9million in revenue. Fully diluted share pool would be 150million shares)
What does this all mean?
You have a company with a $100million helium offtake agreement signed and enough revenue to pay for day to day operations of the company. HELI.V ran into a cash crunch and needed some money to pay to drill more oil. They know it's there, hence management putting up a sizeable amount in the Oct. 2023 private placement. The well will be drilled winter 2023.(More details should be given at the annual shareholders meeting Nov. 28th) A rumour is also going around the message boards that they will frack the oil pool with the 2 producing wells in an attempt to get more barrels per day out of them.
Investors are pissed because the oil wells are not doing well and a few bad quarters will do that.
What your getting for 10c/share investment and a $9million market cap
For 10c/share today you are basically getting a revenue generating company with a signed helium off-take agreement worth $100million over 5 year. They are drilling for more oil this winter. Management invested $1million of their own money for this drill. Last time they hit oil share price jumped up x4 in 3months. I don't really see them missing this time around.
Investors from a year ago are not happy... which clearly makes this company way oversold at this point in time(Also the quarterly financials show their assets alone are worth $16million)
Did I mention HELI has minimal debt($750,000)
For any new investor, or old investor looking to get a second set of shares, this is what's called a firesale. $1000 buys you 10,000 shares today.
Risk
They don't hit oil on their next drill. Considering management is putting up such a sizeable amount of their own money.... I think it's worth the risk.