The Alberta-focused, cash-flowing, multi-project helium developer First Helium stock (TSXV:HELI) is seeing a demand for its assets. The company has two premier helium projects in Alberta that are high-value, low risk to high-impact exploration opportunities. The company plans to continue drilling at its Worsley project throughout the reminder of 2023.
Joining us to talk about First Helium is the president, CEO and director, Edward Bereznicki.
Hello, Ed. Welcome to The Top Line.
TMH: It appears to be exciting times in the helium business – with global demand for helium increasing in the high-tech and space exploration, in addition to renewable energy applications, helium prices seem to be robust for the near to mid-term and into the future. Please give us a quick introduction on yourself and First Helium.
EB: My name is Ed Bereznicki. I’m the president and CEO of First Helium. I got involved with the company over four years ago now. At that time, the company had identified a shut-in natural gas well with over 1.3% helium content. The well was retested, and First Helium acquired the property. We’ve named the well, the 15-25 which ties to its land location. The Well had originally been drilled for natural gas. It was a large well with high pressure, high deliverability, absolute open flow production of 88 million cubic feet per day. So, a very, very substantial well. The well was never produced. It was shut-in due to high nitrogen content. It could not be produced for natural gas. The company then proceeded to purchase more acreage in the area, and this really set up and established our core Worsley property.
TMH: What progress has First Helium made towards establishing commercial helium operations since its initial listing in mid-2021?
EB: That’s correct. We listed our shares for trading in July of 2021 and since that time we’ve made significant strides on bringing the 15-25 Well towards commercial production. Some of the notable achievements include: we completed our front-end engineering design study for a single-well helium processing facility. We recently signed a helium sales offtake agreement with a large global industrial gas supplier. Now over the first five years of production where we’ve got firm pricing, this contract is worth up to potentially $100 million U.S. to the company. So, it’s a substantial piece of business for us potentially here.
We’ve also drilled a horizontal helium exploration well we call the 5-27, and this is going to prepare us for a potential helium resource play. We’re going to complete and test that well in the next 12 months or so. So investors should stay tuned for that.
We’ve also added some exploration lands at Worsley and established a second core area down in southern Alberta, creating two premium helium projects within the province and then lastly, based on our geological evaluation work of those properties, we’ve generated multiple perspective drill targets for future helium production growth.
TMH: Can you provide more details on the company’s key objectives for 2023?
EB:I think I’d like to highlight a few things that we’ll be working on for the next 12 months. So first off, we’re going to confirm our helium processing facility selection and begin construction and our targeted completion date for the facility is mid-2024. Following that, we would bring our 15-25 helium well into production. We feel that based on the offtake contract we’ve got in place and our forecast, we should be able to cashflow at a field level approximately $5 million per year. And then following that, we’d like to bring the 5-27 horizontal well that I just spoke about into potential production following testing and completion, which could lead to a more expansive, predictable, lower risk regional helium play. Then lastly, I think what we’d like to do is prioritize a number of lower cost, high chance of success drilling and re-entry operations, which could add potential resource and near-term potential cashflow.
TMH: What achievements have the company made regarding the Worsley property exploration and development?
EB:Since we acquired the 15-25 Well the company’s been busy. We successfully retested the 15-25 Well in late 2021 at 1.3% helium content. We’ve added land in the Worsley area. We’re now at over 60,000 contiguous acres of a hundred per cent owned land up in the Worsley region. During this time, we’ve also drilled three exploration lands, including the horizontal 5-27 Well I spoke of and two oil wells, which have added immediate cashflow to the company.
One of the key pieces of our exploration success at Worsley has been confirming our geologic model, which makes use of 3D seismic. In fact, our successful helium well and our two oil wells confirm this exploration strategy. So, to further the program, we shot two proprietary 3D seismic programs that we’ll be evaluating to choose other locations to further our exploration efforts there. One of the other things we did just to prove up our 15-25 helium well was to commission a third-party independent resource evaluation with Sproule Associates of Calgary, which provided a contingent resource report for our 15-25 Well. And then lastly, as I’ve alluded to earlier, we’ve completed our front-end engineering design study on our single well helium facility at Worsley.
TMH: Could you shed some light on the progress made with the southern Alberta lands?
EB: We secured an option on approximately 880,000 acres of land in mid-2021. We evaluated that land under an exclusive option agreement and based on our work there, we high graded 276,000 acres of land which we took a further option on and over 60% of it is covered by 3D seismic data, which is a tremendous way for us to explore that land efficiently from a time and cost perspective. So, we’ve conducted a thorough evaluation of that high-graded land and as a result we’ve identified a number of high-impact prospects, including one drill-ready location, which we look forward to getting to later this year.
TMH: Is there anything else you would like to add that we didn’t cover?
EB:I think one of the things I would just touch on is the two oil wells that we did drill in late 2021 and 2022 have provided the company with over $12 million in revenue and contributed $8 million in operating cashflow to the company, which has helped us to carry on our exploration and development activities. So, we’ve got a tremendously exciting period of time coming towards the next 12 months, and we invite investors to keep tabs on us at our website and our Twitter feed.
TMH: Thanks again for joining us today, Ed, talk soon.
Again, we have been speaking with Ed Bereznicki, president, CEO and director of First Helium. Follow the company on the Venture Exchange where it trades under the ticker symbol HELI or head to their website at firsthelium.com.
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