REG - Helium One Global Ld - Acquisition of He & CO2 project, and fundraise

Helium One GlobalAnnouncement

27/08/2024 07:15

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RNS Number : 6900B  Helium One Global Ltd  27 August 2024

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as amended by The Market Abuse (Amendment) (EU Exit)
Regulations 2019.

This announcement may contain certain statements about the future outlook for
the Company.  Although the directors believe their expectations are based on
reasonable assumptions, any statements about the future outlook may be
influenced by factors that could cause actual outcomes and results to be
materially different.

27 August 2024

Helium One Global Ltd

("Helium One" or "the Company")

Acquisition of near-term development and production

helium and carbon dioxide project and fundraise of £6.43 million

 

Helium One Global (AIM: HE1), the primary helium explorer in Tanzania,
announces that the Company has entered into a conditional binding heads of
agreement (the "Agreement") pursuant to which Helium One has agreed to acquire
a 50% legal and beneficial interest (the "Interest") in ASX listed Blue Star
Helium's (ASX: BNL) ("Blue Star") Galactica-Pegasus project in Colorado, USA
("the Galactica Project"), as well as a similar interest in the leases
associated with 246 km(2) (61,000 gross acres) of acreage in the proven helium
fairway of Las Animas County, southern Colorado (the "Acquisition").

The Company also announces that it has raised gross proceeds of £6.43 million
(approximately US$8.2 million) by a direct subscription (the "Subscription")
pursuant to a cash box structure, through the issue of 590,000,000 new
ordinary shares of no par value in the capital of the Company ("New Ordinary
Shares") at a price of 1.09 pence per Ordinary Share (the "Issue Price") to
fund the acquisition. The Subscription is conditional on admission of the New
Ordinary Shares to trading on AIM becoming effective.

Highlights:

·    Conditional acquisition of a 50% interest in Blue Star's
Galactica-Pegasus project

·    The Galactica project contains confirmed discovery wells in the
region flowing up to 6% helium (average of 3%) as free gas and are well
positioned close to existing helium infrastructure

·    The Company's internal gross resource estimates, assuming a P50
Helium concentration of 3%, are 675 million cubic feet

·    Full development programme for the Galactica Project will require the
drilling and tie-back of 15 wells, as well as commissioning of the relevant He
and CO(2) processing facilities

·    Initial six development well programme planned for Q4 2024 which are
expected to be on stream and producing in H1 2025

·    Acquisition is in line with Helium One's strategy to build a
diversified helium company

·    Tanzania projects remain the primary focus of the Company with
Extended Well Test ("EWT") currently ongoing at Itumbula West-1, a separate
announcement providing an update on progress of the EWT has been released by
the Company today (27 August 2024)

·    £6.43 million (approximately US$8.2 million) fundraise via a direct
subscription with Cynosure Capital PTY Ltd, with Marex Financial acting as the
placing agent

 

Lorna Blaisse, Chief Executive Officer, commented:

"We are very pleased to have entered into this partnership with Blue Star that
allows us to build an expanding global footprint in the helium sector at such
a pivotal time. Our projects in Tanzania remain our primary focus, but this
development opportunity enables the Company to potentially secure near-term
cash flow to aid with progressing our Tanzanian asset.  We now have a
portfolio of two potential near term revenue projects in our portfolio.

"We very much look forward to working with Blue Star in this new partnership
and aim to draw on our learnings from another proven helium play in order to
extend our knowledge to this new play as we advance towards producing assets."

 

The Acquisition

The Company has entered into the Agreement pursuant to which, the Company has
agreed to acquire the Interest in Blue Star's Galactica Project and a similar
interest in the leases associated with 246 km(2) (61,000 gross acres) of
acreage in the proven helium fairway of Las Animas County, southern Colorado.
 Confirmed discovery wells in the region have flowed up to 6% helium (average
of 3%) as free gas and are close to existing helium infrastructure. Blue Star
drilled the State-16 development well in June 2024 which flowed 1.9% He at 285
Mcfd in addition to 70% CO(2). The Company's internal gross resource
estimates, assuming a P50 Helium concentration of 3%, are 675 million cubic
feet.

The Acquisition is conditional on a number of conditions being satisfied or
waived (if capable of waiver) on or before 31 October 2024, including but not
limited to: (i) the parties agreeing and executing definitive agreements, in
agreed form, in respect of the Acquisition which will take the form of a
farm-in agreement and a joint operating agreement (provided that should the
parties fail to enter into the definitive agreements on or before the longstop
date and subject to the Company having waived the requirement, the Agreement
will be deemed to be the definitive agreement in respect of the Acquisition;
and (ii) approval by the Energy and Carbon Management Commission of Colorado
of the oil and gas development plan submitted to the CECMC relating to the
Galactica Project and known as Galactica-Pegasus OGDP I and having Docket No:
240400088.

Blue Star, through its local operating entity, will continue to act as
operator on the project. The Company has also agreed a right of first refusal
with Blue Star pursuant to which the Company will be entitled to acquire all
other Blue Star helium acreage (other than Blue Star's Serenity prospect) on
the same terms as those offered to Blue Star by a third party. Should the
Company fail to exercise the right within a certain period, then the right
will expire The Agreement also provides for a period of exclusivity from the
date of the Agreement until the earlier of the longstop date or the date on
which all of the conditions are satisfied which includes customary
restrictions on Blue Star.

This development project targets the Permian-aged Lyon Sandstone reservoir
fairway sealed by the overlying Blaine Formation anhydrite. Regional well test
data indicates good to excellent reservoir properties, with helium primarily
being sourced from the deeply weathered fractured, granitic basement. The He
is trapped in structural closures developed during Late Palaeozoic rifting,
and the CO(2) has been introduced into the system from later stage Tertiary
volcanic intrusions.

This is a strategic move which allows the Company to diversify its portfolio,
both operationally and geographically, and follows an extensive review of
several potential asset acquisition targets over the past 12 months, in North
America and elsewhere. Whilst the Tanzania asset remains the primary focus,
the Company believes that this represents a unique opportunity and required
swift action by the Board following completion of all relevant due diligence.

The Company believes that this will be the first step in developing a
diversified and wider operating asset base, one that will lead to greater
growth opportunities and provide an accelerated income stream and near-term
attributable reserves that will benefit shareholders and stakeholders.

The full development programme for the Galactica Project will require the
drilling and tie-back of 15 wells, as well as commissioning of the relevant He
and CO(2) processing equipment. The initial programme, which has been funded
by the capital raise, will require the drilling of six development wells which
are planned for Q4 2024. Once these are complete, it is forecast that the sale
of He and CO(2) from these initial wells, will generate sufficient cash to
fund the drilling and tie-back the remaining nine wells as the project is
close to existing helium processing facilities, associated infrastructure and
downstream users.

The initial wells are expected to be on stream and producing in H1 2025 and an
independent third-party competent person's report indicates that an average of
approximately US$2 million per annum will accrue to the Company over a period
of five years. However, these estimates represent only sales from the
production of helium, and the Company believes that the sale of associated
CO(2) into the local market, could increase this by up to 50%.

 

The Subscription

The Subscription was made with a single institutional investor, Cynosure
Capital PTY Ltd, with Marex Financial acting as the placing agent, and will
enable the Company to meet the financial obligations under the Agreement which
will result in the Company acquiring the Interest. Subject to the conditions
in the Agreement having been satisfied or waived (if capable of waiver), the
net proceeds of the Subscription will be applied in respect of the Acquisition
as follows:

·    US$1.5 million in respect of past costs incurred by Blue Star on the
Galactica Project;

·    100% of the costs in respect of six wells capped at US$450,000 per
well;

·   up to US$2.55 million in in respect of the Company's 50% participating
interest share of the tie-back, installation andprocessing expenditures
required for the development of the Galactica Project;

·  the balance of US$1.18 million in respect of associated fees, legal
costs and working capital and development contingencies.

The New Ordinary Shares represent 9.99% of the Company's enlarged share
capital after the issue of the New Ordinary Shares. The Issue Price represents
a discount of approximately 37 per cent. to the closing price of 1.74
pence per Ordinary Share on 23 August 2024, being the last business day
prior to the announcement of the fundraise.

 

Admission and Total Voting Rights

Application has been made to the London Stock Exchange for the New Ordinary
Shares to be admitted to trading on AIM ("Admission"). It is expected that
Admission will become effective and that dealings in the New Ordinary Shares
will commence at 8.00 a.m. on 30 August 2024. The New Ordinary Shares will be
issued as fully paid and will rank pari passu in all respects with the
Company's existing Ordinary Shares.

Upon Admission, the Company's issued ordinary share capital will consist of
5,905,710,763 Ordinary Shares with one voting right each. The Company does not
hold any Ordinary Shares in treasury. Therefore, the total number of Ordinary
Shares and voting rights in the Company following Admission will be
5,905,710,763. With effect from Admission, this figure may be used by
shareholders in the Company as the denominator for the calculations by which
they will determine if they are required to notify their interest in, or a
change to their interest in, the share capital of the Company.

For further information please visit the Company's website: www.helium-one.com
(http://www.helium-one.com)

Contact

 Helium One Global Ltd                                         +44 20 7920 3150

 Lorna Blaisse, CEO

 Graham Jacobs, Finance and Commercial Director

 Panmure Liberum Limited (Nominated Adviser and Joint Broker)  +44 20 3100 2000

 Scott Mathieson

 Nikhil Varghese

 Zeus Capital Limited (Joint Broker)                           +44 20 3829 5000

 Simon Johnson

 Louisa Waddell

 Tavistock (Financial PR)                                      +44 20 7920 3150

 Nick Elwes

 Tara Vivian-Neal

 

Notes to Editors

Helium One Global, the AIM-listed Tanzanian explorer, holds prospecting
licences across three distinct project areas, with the potential to become a
strategic player in resolving a supply-constrained helium market.

The Rukwa, Balangida, and Eyasi projects are located within rift basins on the
margin of the Tanzanian Craton in the north and southwest of the country. The
assets lie near surface seeps with helium concentrations ranging up to 10.6%
helium by volume. All Helium One's licences are held on a 100% equity basis.

The Company's flagship southern Rukwa Project is located within the Rukwa Rift
Basin covering 1,900km(2) in south-west Tanzania.  This project is considered
to be entering an appraisal stage following the success of the 2023/24
drilling campaign, which has proved an established helium system where the
Itumbula West-1 exploration well successfully flowed 4.7% helium to surface in
Q1 2024. Additional follow-on leads and prospects are defined by subsurface
database including multispectral satellite spectroscopy, airborne gravity
gradiometry, 2D seismic data, and QEMSCAN analysis.

Helium One is listed on the AIM market of the London Stock Exchange with the
ticker of HE1 and on the OTCQB in the United States with the ticker HLOGF.

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