Whether you’re seeking exposure to exploration upside or established profitability, the helium market offers compelling candidates for the commodity sleeve of your portfolio.
Helium is an essential resource notable for its widespread use-cases and perennially short supply, as highlighted by it nearly doubling in price from about US$267 per million cubic feet (mcf) in 2020 to an all-time-high of almost US$500 in 2023, according to MIT Technology Review, and gaining 638% since 2000, according to the United States Geological Survey, propelled by declining production and a lack of new infrastructure development.
The non-renewable gas, predominantly extracted as a by-product of natural gas, is prized for filling balloons, as well as its refrigeration properties, which come in handy to cool the technology that powers our modern lives, including everything from nuclear reactors, to MRI machines, space rockets and silicon during semiconductor manufacturing, granting helium a more than US$30.4 billion global market in 2024 that is expected to grow to US$46.8 billion by 2034, according to Future Market Insights.
The helium market is a volatile one because the gas is incredibly light and difficult to store, with up to half a year’s extraction evaporating or escaping before it can be used. Compounding its scarcity, fewer than 15 companies and only four primary countries – the United States, Russia, Qatar and Algeria – account for the vast majority of the world’s supply. If a war breaks out or factories shut down, the ensuing deficit leads to upward price pressure, making it especially stressful for companies that require the gas to operate, and increasingly profitable and prospective for those that produce, distribute and explore for it.
Many established and emerging helium players represent attractive long-term investments thanks to their quality assets, minimal competition, and an expected industry-wide acceleration in demand, driven primarily by AI’s prodigious consumption of computing power, as well as decreasing U.S. production and the geopolitical risks associated with doing business with Russia, Qatar and Algeria, each of which has been accused of human right abuses.
New ventures are sprouting up across the world to capitalize on this demand, including four plants in Canada since February 2023, setting eagle-eyed investors up to identify helium stocks with the value propositions best suited to outperform over a long-term holding period. Here’s a quick survey of companies you should know and why they might deserve a place in your portfolio.
Large capitalization helium stocks
ExxonMobil: US$510B market cap
ExxonMobil (NYSE:XOM), an oil and gas major, generates about 20% of the world’s helium through natural gas extraction at its Labarge facility in Wyoming, which boasts a more than 80-year resource to be extracted through the next century, and has captured more carbon dioxide than any other industrial facility in history. While the company derives most of its profits from fossil fuels, including more than US$30 billion in 2023, it is actively investing in future-oriented areas such as recycling, next-gen carbon materials and carbon dioxide capture technology with eyes on multi-bagger earnings growth from 2019-202, giving shareholders reason for conviction to hold on and build upon ExxonMobil stock’s 48.5% return since 2019 and more than 2,150% return since 1984.
Linde: US$213B market cap
Linde (NDAQ:LIN) is the world’s top helium supplier with more than 50 transfill facilities and a leading processing facility in Kansas, in addition to 12 other essential gasses to the global industrial complex such as nitrogen, oxygen and hydrogen. The company has been increasingly profitable since inception in 1993, growing earnings per share by an average of 12 per cent per year, rewarding shareholders with a more than 5,400% return through the period. With upwards of US$50 billion in investment opportunities in its sights and capabilities across the value chain, Linde is a strong candidate for a long-term allocation.
Air Liquide: US$100B market cap
Air Liquide (EPA:AI) is a gasses, tech and services company that helps more than 4 million customers in more than 72 countries with their oxygen, nitrogen and hydrogen needs. The company is renowned for its hollow fiber-based helium recovery technology, which enables the extraction of purified helium from natural gas or nitrogen-rich gasses with industry leading efficiency, and it plays the starring role in Canada’s largest helium plant. Air Liquide averaged more than 7.2% earnings per share growth between 1993-2023, leading it to post a 1,711% return over the period, with a more than 8-billion-euro project pipeline to continue creating value over the next few years.
Air Products and Chemicals: US$60B market cap
Air Products and Chemicals (NYSE:APD) is another industrial gas leader that offers exposure to the most diverse helium source mix in the world across methane, carbon dioxide and liquid natural gas, in addition to a global distribution network that can accommodate millions of standard cubic feet of helium per month. The company has delivered double-digit earnings per share growth every year since 2014, resulting in a more than 160% return during the period, and will play a major role in the energy transition with US$15 billion in hydrogen projects planned by 2027 to cement its position as the gas’ No. 1 global supplier. Backed by management that has proven its commitment to shareholder value by increasing dividends at a 9% compound annual growth rate over more than 40 years, investors owe Air Products and Chemicals a thorough once-over as a means to benefit from helium’s global tailwind.
Small-capitalization helium stocks
Pulsar Helium: C$87M market cap
Pulsar Helium (TSXV:PLSR) is focused on developing its flagship Topaz project in Minnesota in the United States, where a primary helium occurrence is supported by flow rates of up to 821,000 cubic feet per day – subject to confirmation because of drilling fluid interference – and grades between 8.7-14.5%, making it one of the most prospective in the world. This is in addition to up to one kilometre of gas-bearing terrain to be drilled according to seismic data. Helium concentrations of more than 0.3% are considered economically significant.
Pulsar shareholders have collected a 210% return since inception in August 2023 thanks to Topaz’s outsized potential, and they are positioned for greater upside backed by an updated resource estimate slated for July and management’s high confidence in expanding high-grade intercepts.
Desert Mountain Energy: C$29M market cap
Desert Mountain Energy (TSXV:DME) focuses on the exploration, development and production of helium, hydrogen, natural gas and condensate. Its Holbrook project in Northeastern Arizona features more than 1 million acres of helium prospects and reported grades in the region as high as 8-10%, including four high-grade helium fields to date, but has had to delay initial in-house production because of permitting issues.
Holbrook is complemented by the West Pecos gas field in New Mexico, where we find 188 producing wells across a largely untapped 50-mile gas collection system. Despite revenue rising by 4x from C$440,000 in 2022 to C$1.74M in 2023, in addition to a healthy C$770,000 so far this year, Desert Mountain Energy has generated a more than C$20M net loss to date, causing its stock to tank by over 88%, a substantial discount should your due diligence confirm the company’s untapped value.
Avanti Helium: C$24M market cap
Avanti Helium (TSXV:AVN) is a helium exploration, development and production company with approximately 169,000 acres of leases and licenses in Montana, Alberta and Saskatchewan. To date, two wells in Montana have tested for a combined more than 18,500 mcf/d with a 1.1% helium concentration, with numerous structures identified for further drilling, while 84 wells drilled in Saskatchewan since 2016, 25 of which are producing 450 mcf/d (Sept. 2023), are mostly surrounded by other helium companies and poised for step-out drilling backed by recently acquired seismic data. Despite robust exploration upside, shares of Avanti Helium have given back over 45% since 2019.
Helium Evolution: C$13M market cap
ExplorerHelium Evolution (TSXV:HEVI) holds the largest portfolio of helium land rights among publicly traded companies in North America at approximately 5.6 million acres. These holdings house more than 185 potential helium anomalies marked by discoveries in Q4 2023 (0.95%) and Q1 2024 (0.64%) and a highly prospective drilling campaign designed to catalyze market sentiment before the goal of commercial production in 2025. Investors have discounted shares of Helium Evolution by 70% since 2022, irrationally turning a blind eye to projected near-term sales from its potentially world-class resource.
First Helium: C$10M market cap
First Helium (TSXV:HELI) is exploring multiple high-value and low-risk targets on its flagship 60,000-acre Worsley helium, oil and natural gas project in Alberta, including Worsley’s 1999 initial helium discovery well, where drilling yielded 1.3% helium and 26% nitrogen and a 10-day flow test of 2 mcf/d with 65% natural gas and 12 bbls/mcf of condensate.
The company has completed preliminary engineering on a helium processing facility and has secured a 10-year offtake agreement, demonstrating management’s commitment to lowering costs and generating shareholder value, teeing investors up to capitalize as First Helium explores 12 prospective multi-zone helium, oil and natural gas targets funded by robust cash flow from its oil and gas operations. The stock is down by 77% since 2021, making the broader market’s pessimism your opportunity.
Total Helium: C$5M market cap
Total Helium (TSXV:TOH) is a junior explorer and producer active in Arizona. Its flagship 27,000-acre Pina South helium field has posted highly economical concentrations between 5% and 8%, and boasts nine wells connected to pipeline, as well as 10 in development and more than 300 in expansion potential, leading Linde to secure a development and offtake agreement with the company.
As production ramps up on existing wells and more come online through this year, Total Helium is brimming with upside, though the thesis is contrarian, considering that its stock has given back more than 96% since inception in 2021.
Global Helium: C$4M market cap
Global Helium (CSE:HECO) specializes in applying oil and gas techniques to efficient and effective helium development. The company’s joint venture with Perpetual Energy (TSX:PMT) allows it to explore about 369,000 acres in Alberta that have yielded multiple helium discoveries between 1.2% and 1.5% and robust evidence for expansion. This is in addition to:
- The more than 1.8 million acres prospective for helium in Saskatchewan that it already owns, which feature large helium structures and seismic data meriting further exploration drilling slated for later this year.
- More than 25,000 acres in Montana that showed up to 3.9% helium during an exploration test and offer numerous wells worthy of step-outs.
As Global Helium breaks ground on a production facility in Medicine Hat, Alberta, later this year and continues releasing positive news flow, and its target commodity continues to rise, the company is optimally positioned to reverse its stock’s 90% loss since 2021.
Royal Helium: C$28M market cap
The most attractive among smaller-cap publicly traded helium explorers is Royal Helium (TSXV:RHC), whose stock is down by 77% year-over-year despite being the first publicly traded company to begin helium production from its Steveville project in Alberta.
Its portfolio of drilled projects to date houses primarily nitrogen-associated helium reservoirs, each of which are supported by economical intercepts and the company’s ability to scale quicker than its competitors thanks to reaching production at Steveville, positioning investors to be rewarded for their patience as resources are drilled and brought to market. Additionally, the company’s portfolio of other project areas provides upside and runway for future growth.
Royal Helium’s Alberta properties
Royal Helium’s Steveville project, approximately 35 km northeast of Brooks, Alberta, boasts a best-case independent resource assessment of 145 mcf of risked marketable resources backed by wells with helium concentrations as high as 0.53%.
Steveville began commercial production at its purification facility in December 2023, which is designed to recover 99.999% helium and to process 15 mcf of raw gas per day or 22,000 mcf per year, in addition to 20 mcf of food-grade carbon dioxide and 8 bbls/day of condensate per year, with forecasted cash flow surpassing US$130 million over the first 10 years (slide 4).
The property has multiple off-take agreements in place for 100% of its production across diverse industries, including food and beverage, as well as two deals in the North American aerospace industry averaging more than US$500 per mcf, and will benefit from supplementary cash flow from recycling ancillary methane to power its operations, as well as the potential to monetize carbon credits generated under Alberta’s Technology Innovation and Emissions Reduction System.
Royal Helium’s tailor-made management team believes it can replicate Steveville multiple times across its million-acre portfolio with expedited efficiency using the property’s proof-of-concept.
The company’s other Alberta-based project, the 7,000-acre 40 Mile, 200 km south of Steveville, offers exposure to demonstrated potential for high flow-rate helium in at least two structures supported by 2D seismic data and historic test data showing significant helium concentrations. Management believes 40 Mile shows all the signs of economical helium production and believes it will become one of its highest priority areas. Initial drilling is planned once ongoing licensing and permitting are completed.
Royal Helium’s Saskatchewan properties
Royal Helium owns 10 main blocks of leased and permitted land spanning southwestern to southeastern Saskatchewan. These are highlighted by the discovery of commercial helium grades at:
- The Climax block, spanning 58,000 hectares, where crews encountered economic helium concentrations in April 2021 between 0.33% to 0.64% and production zones between 5 m to over 30 m thick.
- The Climax Nazare zone, a nearby 32-square-km contiguous helium-bearing zone with an independent resource estimate of best-case helium in place of 1.298 billion cubic feet (bcf), where geological and engineering work is ongoing to determine an optimal extraction strategy.
- Val Marie, a 13,000-hectare land package under a 21-year lease highlighted by robust natural gas production and successful helium production wells recently drilled on the Montana side of the structure. Royal Helium’s initial well, drilled in August 2022, yielded elevated helium readings and contributed to a C$25 million joint venture to develop more wells and a processing facility on the property.
- Ogema, a 27,000-hectare property where two wells graded between 0.60-0.76% helium and further zones have been identified for testing later this year.
Royal Helium intends to further explore and develop prospective blocks in Saskatchewan through an extensive portfolio of helium targets identified through drilling, high-resolution aeromagnetic surveys, and 2D & 3D seismic acquisition, while leveraging incentives from the province’s Helium Action Plan, which delineates a path to accumulating a 10% share of the global helium market by 2030.
The lowest risk and highest probability for success
Among the opportunities we’ve discussed here, Royal Helium stands out as the most prospective because it represents the shortest and clearest path among its smaller-cap competitors to establishing a vertically integrated supply chain and securing meaningful market share supported by durable competitive advantages.
As Andrew Davidson, Royal Helium’s chief executive officer, recently told Stockhouse, he and his team of resource industry veterans intend to triple or quadruple production capacity over the next 18 months through drilling and multiple new processing facilities – which will be funded from Steveville’s rapidly increasing cash flow and easier access to capital thanks to the company’s established resource – setting the stage for the stock’s multi-bagger ascent from its current market cap and transforming its almost 80% loss year-over-year into an enticing entry point.
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(Top photo of Royal Helium’s Climax block: Royal Helium)