REG - Helix Exploration - Results of Scoping Study

Helix ExplorationAnnouncement

11/06/2024 07:00

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RNS Number : 8770R  Helix Exploration PLC  11 June 2024

11 June 2024

Helix Exploration PLC

 

("Helix Exploration" or "Helix" or the "Company")

 

Results of Scoping Study

 

 

Helix Exploration, the helium exploration and development company focused on
helium deposits within the 'Montana Helium Fairway', is pleased to announce
the results of a Scoping Study Economic Analysis conducted by Aeon Petroleum
Consultants Corporation ("Aeon").

 

Highlights

·      NPV8 of $303.1 million using a helium price of $550/Mcf and grade
of 1.50%

·      Initial CAPEX requirement of only $19.7 million

·      Net revenue of $605.6 million (after CAPEX, OPEX, tax and
royalty) over 29-year LOM

 

Bo Sears, CEO of Helix Exploration, said:

 

"We are delighted with the results of this Scoping Study that demonstrate the
potential for exceptional economic returns across a range of modelled
scenarios.

 

"The Ingomar Dome Project demonstrates potentially high returns and low
capital requirements.  Rapid payback and free cash-flow estimates of over $40
million dollars a year release a range of finance possibilities to provide
initial CAPEX requirement."

 

 

Details

 

The Company engaged Aeon act as independent experts in producing a Scoping
Study report over the Company's Ingomar Dome project.  The report was
compiled by James Weaver, a petroleum engineer with 45 years of industry
experience in economic analysis, production optimisation and reserves
estimation and evaluation.

 

The Scoping Study used raw gas in place, reservoir specific recovery factors,
a well spacing of 640 acres, and a helium grade of 1.5% He to determine
recoverable helium resources per well.  This was combined with production
data from well tests undertaken on historic wells within the Company's leases
(Amsden and Charles Formation) or from nearby analogous producing fields
(Flathead Formation) to develop a "type-curve" for each reservoir.  This
allowed the development of a detailed production plan and well schedule over
the life of the project.

 

Various iterations of the production plan were run alongside various plant and
surface designs to produce an optimised schedule.  This optimised schedule
included the following:

·    Initial production in 2025 from 3 wells supplying a 10,000Mcf/day
inlet PSA plant.  This reduces initial CAPEX and equity/debt burden
increasing project NPV on a per-share basis.

·   Self-funded expansion to 20,000Mcf/day plant in 2027 with drilling of an
additional 3 wells maintaining steady state production rates.

·      7 additional production wells drilled between 2030 and 2035 to
maintain pressure and flow to plant.

·   Recovery of byproduct natural gas from Amsden and Charles formations to
feed into an onsite co-gen facility offers significant OPEX saving.

 

Using a helium price of $550/Mcf, results of the optimised schedule estimated:

·      NPV8 of $303.1 million

·      Undiscounted net revenue of $605m (after tax, royalty, CAPEX and
OPEX)

·      Robust economics with positive NPV8 down to 0.4% Helium grade or
Helium price down to $125/Mcf

·      Initial CAPEX requirement of $19.7 million

·      Initial CAPEX payback in 12 months

·      Time to first payout of 2.58 years

 

The results of the Scoping Study demonstrate the potential for positive
economic returns across a range of modelled scenarios and based on a P50
probabilistic determination of gas originally in place.

The Scoping Study used parameters from the 1 February 2024 CPR report prepared
for the Company by Ryder Scott, who applied the principles and standards
outlined in the 2018 Society of Petroleum Engineers Petroleum Resources
Management System (SPE-PRMS) to the estimation of the Helium Prospective
Resources at Ingomar Dome.  As the Scoping Study is based on Prospective
Resources it is subject to discovery risk and there can be no guarantee that
any helium discovered will be developed into profitable production, or that
helium will be discovered in commercial quantities or developed to profitable
production.  Economic results are derived from P50 resource numbers, and
therefore there is an equal probability that economic results will be higher
or lower following the results of the Company's scheduled Q3 drilling
campaign.

 

The Company looks forward to drill testing the Ingomar Dome project with a
drilling campaign in Q3 of this year and will provide the market with updates
to the economic model based on flow-test and grade data from within the
project lease area.

 

 

This announcement contains inside information for the purposes of the UK
Market Abuse Regulation and the Directors of the Company are responsible for
the release of this announcement.

 

 

 

Enquiries

 

Helix Exploration

 Bo Sears       via Camarco
 David Minchin  info@helixexploration.com (mailto:info@helixexploration.com)

Cairn - Nominated Adviser

 Liam Murray          +44 (0)20 7213 0880
 Ludovico Lazzaretti
 James Western

 

Hannam & Partners - Joint Broker

 Neil Passmore              +44 (0)20 7907 8502
 Andy Crispin
 Spencer Mignot

 SI Capital - Joint Broker
 Nick Emerson               +44 (0)14 8341 3500
 Renato Rufus
 Nick Briers

 

OAK Securities - Joint Broker

 Jerry Keen   +44 (0)20 3973 3678
 Henry Clark

Camarco - Financial PR

 Emily Hall     +44 (0)20 3757 4980
 Tilly Butcher  helixexploration@camarco.co.uk (mailto:helixexploration@camarco.co.uk)

 Billy Clegg

 

 

Notes to Editors

 

Helix Exploration is a helium exploration company focused on the exploration
and development of helium deposits within the 'Montana Helium Fairway'.
Founded by industry experts with extensive experience of helium systems in the
US, the Company's assets comprise of 52 leases over the Ingomar Dome; a large
closure of 16,512 acres with P50 unrisked prospective helium resource of
2.3Bcf and upside of 6.7 billion cubic feet. Historic drilling and/or testing
has identified gas in all target reservoir horizons.

 

Helix Exploration will focus on a drilling campaign and early production at
the Montana Ingomar Dome Project.  An aggressive development timeline will
see a drilling campaign targeted for Q3 2024 and first helium production
targeted for Q4 2025.  Helix is committed to open and transparent
communication with investors and the wider market as the project progresses
through development.

 

The Company's Admission Document, and other information required pursuant to
AIM Rule 26, is available on the Company's website at
https://www.helixexploration.com/ (https://www.helixexploration.com/) .

 

 

Caution regarding forward looking statements

 

Certain statements in this announcement, are, or may be deemed to be, forward
looking statements. Forward looking statements are identified by their use of
terms and phrases such as ''believe'', ''could'', "should" ''envisage'',
''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect",
''will'' or the negative of those, variations or comparable expressions,
including references to assumptions. These forward-looking statements are not
based on historical facts but rather on the Directors' current expectations
and assumptions regarding the Company's future growth, results of operations,
performance, future capital and other expenditures (including the amount,
nature and sources of funding thereof), competitive advantages, business
prospects and opportunities. Such forward looking statements reflect the
Directors' current beliefs and assumptions and are based on information
currently available to the Directors.

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