Desert Mountain Energy Corp V.DME

Total Helium (TOH.V)

[Fredo51545]

TOH is entering the Holbrook Basin as a competitor via a just announced joint venture. Two 8%wells are completed already and TOH is going to drill 8 more by June 30. The well productivity is very low at 130 Mcf/d, probably due to the shallow depth and low pressures characterizing the historic Pinta Dome wells in the same area.  I am wondering if production levels  this low are being extrapolated to DME's project and thus a cause of the recent  price weakness in the stock.

[Bertie20]

Personally I view this as a positive. It validates the attractiveness of the acreage, and the fact that Total Helium are paying $12m to farm-in to a 20% share of two producing wells, albeit with a bigger 50% share of a whole raft of new wells that are not yet on stream, also highlights the value of helium right now. DME Will of course be getting a higher price, as well, as it owns its processing

[mrfrankl]

Does that mean DME might l process and sell their helium?

[fredo1]

We won't know until one of the companies tells us.

[fredo1]

Your view is correct unless TOH develops enough He to damage the local price structure. Also, I wonder whether this is contributing to the DME price weakness?