JV Acquisition Completed - Ready For Growth Now As helium continues to be a critical element in industries such as semiconductor manufacturing, aerospace, and MRIs, among others, prices and demand have both seen significant growth over the past few years with expectations of a continued shortage due to the element being a non-renewable resource.
https://www.globenewswire.com/en/news-release/2023/02/06/2602431/0/en/Helium-Global-Market-Report-2023.html
With Total Helium’s recent JV for helium production in Arizona, the new property (The Pinta South Project) currently contains over 150 potential drill sites, with production already underway from two wells. And there are a lot of plans for the new project moving into the future.
- The gas field currently features helium concentrates of 5-8% which will have low-cost processing due to the nitrogen content of the gas stream.
- With shallow-depth targets, drilling and completion costs are estimated to be just $220,000 per well.
- The Pinta South JV includes a 20% acquisition of the 2 producing wells, 50% in 8 wells that are currently in the process of being connected to a processing plant, and the right to have 50% working interest in all future wells drilled at Pinta South.
With the acquisition now completed and plans to have 20 operational wells by the end of H1 2023, there’s a lot of revenue scaling potential here especially considering the $500/Mcf off-take agreement with Linde for the first 10 wells and additional upside with other wells helping them balance risk and return.
Considering the current wells are already producing a combined 265 Mcf/D above 8%, the revenue-generating potential is huge here once more wells go online, as $TOH.V will have a more significant stake in them. Considering the future cash flow projections and current $36M valuation, there’s a lot to look out for here as they continue to develop their helium assets.
They have a lot of great information on their presentation if interested: https://www.totalhelium.com/wp-content/uploads/2023/05/Total-Helium-Corporate-Presentation.pdf
Posted on behalf of Total Helium Ltd.