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One of the Last Stocks Filling the Helium Supply Gap

Stockhouse Editorial
2 Comments| February 17, 2022

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(Map via Desert Mountain Energy Corp. Click to enlarge.)

From medical equipment, aerospace applications, alternative energy sources, and even the computer and video gaming industries, distinct major markets claim helium as a crucial element to their future. While supplies dwindle, prices are rising.



There are three global sources that are temporarily offline, Russia, Qatar, and the US BLM. A major supply source had recently gone offline, which only contributed to the supply shortage and increases the expectation (and value) of the work going on with resource company Desert Mountain Energy Corp. (TSX-V: DME, OTCQX: DMEHF, Forum), who is working to unearth new discoveries in the last, and possibly most significant sources of helium - Northeastern Arizona’s Holbrook Basin.


New land for wells in the McCauley Field:

In January 2022, DME announced the purchase of an additional 40 acres of land for the drilling of developmental wells and began work right away.

Believing it is in the best interests of both local landowners and the company itself, Desert Mountain continues to advance ownership of acreage surrounding future well locations.

Desert Mountain Energy’s Chief Executive Officer, Robert Rohlfing laid out the company’s long-term plan in the release on this news, stating that the intent had always been to become a vertically integrated helium producer selling directly to end-users.

“Due to our location, we have the luxury of having 36 end-users within 300 miles of our finishing facility. We expect to be adding further end-user contracts and we look forward to building upon those relationships.”

The permitting process was previously started for the next well in the McCauley field and the team expects to have that permit shortly.

The company has entered into an agreement with Drake Well Services Inc. and gave priority use of a top drive rig with a 4,876 metre (16,000 ft.) depth capability in exchange for pre-payment for drilling services. The company has also completed the required filings to sell processed helium to the US Government and has signed non-disclosure agreements with other end-users.

Permits for next well:

DME followed this up with news that it had received the permit for the first offset well #5 ( 1-1 ) to the McCauley Field discovery well #4. Situated on a local structural high, this well is ideally located where the porosity and permeability are expected to be highly productive in multiple formations. The 1-1 well has now been drilled to depth with production casing set and cemented into place. The rig is now being moved to drill offset well #6 then offset well #7 immediately afterwards.

CEO Rohlfing noted “This second developmental well in the McCauley Field is an important part of bringing our processing plant online later this year.

Providing that offset wells #6 and 7 are successful, initial production from our McCauley Finishing Facility will be fed by 5 wells.

Sampling on the 3 offset wells will take place once they are all drilled to depth. Results should be available for release in the approximately 5 weeks. The Gunnar Dome wildcat prospect will now be drilled later in the year.

Investment summary:

An indispensable element, helium’s value to the medical and technical fields continues to expand and will likely find new causes to serve. Near-term options to fill this supply gap are limited to essentially Desert Mountain Energy, who stands to gain from helium’s impending price increase.

Desert Mountain Energy plans to be in production by Q3 2022 and stands apart from other producers, because unlike other sources overseas who are predominantly LNG projects that produce helium as a by-product of natural gas, this company is focused on helium.


(Desert Mountain Energy Corp. stock chart – Nov 2021 to Feb 2022. Click to enlarge.)

Recent events have changed up the market and this company’s share price is rising in time with helium’s values. DME stock climbed 60.2% since this time last year and 18% year to date.

For more on this company’s operations, visit desertmountainenergy.com.


FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.

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Comments

Thanks Marcello ,,,will revisit
(2)
February 24, 2022

XBC- xebec adsorption a great play on the helium sector and others do your DD and check it out. just became Air Liquide exclusive supplier in their helium space and more. Enjoy
(149)
February 17, 2022

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