Helium One reports solid first-half progress in Tanzania

7th Mar 2024 11:00

(Sharecast News) - Helium One Global described significant milestones in its half-year report on Thursday, including the acquisition of the Epiroc Predator 220 drilling rig, which it said had been successfully mobilised to the Rukwa site.

The AIM-traded firm said the start of the second drilling campaign in the third quarter proceeded as scheduled.

Notably, the drilling of the Tai-3 well was completed, reaching a total depth of 1,448 metres measured depth, providing valuable data for understanding the region and identifying the follow-on Itumbula prospect.

Financially, Helium One raised £12.9m before expenses through two fundraises in September and December, resulting in a net cash balance of $8.7m by 31 December.

Since the half-year ended, the company had drilled the Itumbula West-1 well, achieving a total depth of 961 metres measured depth at a revised well location.

Subsequently, significant discoveries were made, with the well flowing a high concentration of helium at 4.7% and hydrogen at 2.2% to the surface.

Those concentrations were thousands of times above background levels, indicating promising potential for commercial extraction.

Moreover, hot basement fluids exceeding 80 degrees Celsius were encountered across the fault zone, consistent with helium and hydrogen prone intervals.

To further advance the project, Helium One had raised £4.7m before expenses through a company-led placing.

Despite the complexity of operations, the company maintained a strong safety record, with 197 operating days completed since the spud of the Tai-3 well, boasting zero lost time injuries.

"This has been an incredibly busy and transformational period for the company, especially post the half year-end," said chairman James Smith.

"The acquisition of our own rig in July 2023 enabled us to commence our second drilling campaign and provides us with significant optionality going forward, whether that be to drill additional wells efficiently and quickly or as a future revenue stream for the company.

"Helium One's phase two drilling campaign has been very successful."

Smith said Tai remained an interesting prospect which had been logged and sampled, while the Tai-3 well had been cased and suspended.

"The results from Itumbula can only be seen as transformational for the company - flowing helium concentrations at these levels to surface would position Itumbula in the top section of major helium producing fields and this success is a testament to the hard work of the team and their expertise.

"The results acquired across both wells will now hold our focus as we look to evaluate the best way to advance this project in the most effective way possible.

"This is an exciting time for the company, and we would like to thank all our stakeholders, local communities and the government of Tanzania for their continued support and look forward to providing further updates in the near future."

At 1245 GMT, Helium One Global shares were down 12.33% at 1.89p.

Reporting by Josh White for Sharecast.com.