The helium sector is currently experiencing a surge in demand and attention, and for good reason. As highlighted in an interview with Total Helium's (TSXV: TOH) (OTCQX: TTLHF) CEO, Robert Price, on The Deep Dive channel, the world is facing a growing shortage of helium, a critical element with applications in numerous industries.
Helium and the CHIPS Act
Price Highlights that one of the key areas feeling the impact of this shortage is the semiconductor manufacturing sector, particularly in the United States. The passage of the CHIPS Act, which involves a significant investment of $50 billion to onshore semiconductor chip production, underscores the urgency of securing a reliable helium supply. Companies like Intel and Texas Instruments are investing billions in building new facilities, and they require a consistent, domestic source of helium for their operations.
Dwindling Domestic Helium Reserves
The U.S. government has recognized the significance of helium for decades and has maintained control over helium storage facilities in places like Amarillo, Texas. Helium has been crucial for various government purposes, including weather balloons and space exploration. With the increasing demand for helium, it has become even more vital to ensure a stable domestic supply, especially as the existing storage facilities are being phased out due to dwindling domestic reserves.
Total Helium's Vision: Meeting Helium Demand Through Expansion
TOH is actively addressing this helium shortage. In the video Price discussed the company's plans for the future, including drilling additional wells to expand helium production. TOH has been drilling wells in the Holbrook Basin in Arizona, known as the "Saudi Arabia of helium" due to its rich helium concentrations ranging from 5% to 8%. This high concentration makes their wells very profitable, even with lower gas volumes.
Total Helium's Vision: Meeting Helium Demand Through Expansion
TOH's partnership with Linde has played a pivotal role in their helium exploration efforts. Linde's investment of nearly three million dollars comes with the condition that they can purchase helium at a reasonable price, currently set at $500 per mcf. This partnership has allowed TOH to accelerate its drilling and production activities.
While exploring for helium can be challenging for many companies due to low helium concentrations in some areas, Total Helium's focus on regions with high concentrations gives them a competitive advantage. The company's plans include optimizing production from existing wells, announcing new production rates, and initiating a drilling program for additional wells, including those in sand channel formations, which offer significant growth potential.
Full interview here:
Posted on behalf of Total Helium Ltd.