Helium, although the second most abundant element, can only be economically produced from subsurface gas reservoirs. Due to its high economic value and non-renewable nature, the storage of helium is crucial. The growing hydrogen economy and the withdrawal of federal government management from the sole operational underground helium storage facility in Amarillo, Texas, pose new challenges for global industrial markets.
Total Helium (Ticker: TOH.v or TTLHF for US investors) aims to take the lead in developing and operating underground storage solutions for helium and hydrogen. The company has partnered with a multinational industrial gas company to establish an underground helium storage facility that will rival the U.S. Federal Helium Reserve's successor. TOH will have 50% ownership and will operate the facility.
TOH operates in two key states in the United States, namely Arizona and Kansas, which provides the company with a significant geographic presence in well-established helium-producing regions
In Kansas, TOH is constructing its crucial helium storage facility and controls the historic Hugoton field. This field has been a prominent center for helium production in the country, boasting over 300 billion cubic feet (BCF) of helium and 75 trillion cubic feet (TCF) of methane. TOH is leading an expansion initiative in this abundant resource area.
In Arizona, TOH recently acquired a stake in the Pinta South project, a helium-rich natural gas field, through a joint venture agreement. TOH now holds a 20% interest in two producing wells and a 50% interest in eight additional existing wells.
The Pinta South project boasts helium concentrations ranging from 5% to 8%. Additionally, the shallow-producing formation of the project presents an ideal scenario for cost-effective drilling and completion processes.
The agreement involved a purchase price of $12 million, with $8 million paid in cash and nearly 11 million common shares provided. To fund the cash portion of the agreement and future project development costs, TOH raised $12.5 million through a brokered private placement.
TOH aims to have 20 operational wells by the first half of 2023. This agreement positions TOH to become a prominent domestic supplier of helium, given the depletion of the U.S. government's reserves. The helium industry is experiencing sustained demand, and TOH expects significant value creation for its shareholders through this joint venture.
Learn more about the acquisition and TOH in general here:
https://www.totalhelium.com/cool_timeline/total-helium-completes-acquisition-of-joint-venture-interest-in-helium-production-in-arizona-and-private-placement-financing/ Posted on behalf of Total Helium Ltd.