In my last blog on Helix Exploration we discussed the successful completion of the Clink #1 well drilling programme which discovered helium in all target horizons along with a bonus hydrogen discovery.  In fact it wasn't any old hydrogen, it was 'geological hydrogen' You can read the blog here to get the low-down on why geological hydrogen is extra special!

Moving on to todays news...

Successful Re-Entry of Clink #1

Investors have been waiting with baited breath for todays news as post completion of the well back in September the company had intended to perform wireline logging and flow-testing, however due to caving in the Mowry shale compromising the stability of the wellbore, the company needed to set intermediate casing through the shale section and there was certainly no guarantee they'd be able to do it!

The company responded quickly (a by-product of CEO, Bo Sears industry connections I'd imagine) and mobilised a new rig with an initial goal of placing the problematic Mowry shale formation behind pipe.  The Mowry was successfully cased over the entire interval with 7-inch casing cemented to surface.

Following successful re-entry, the company have also deepened to well to determine if the Precambrian could be reached.  Precambrian rock was not found but a second thick Cambrian sandstone horizon was found at 8,290 ft all the way to total depth.

The company can now complete the well with production casing and commence wire-line logging and flow-testing (the well appraisal!)

For investors, todays news is a mix of good-luck and strong execution from Management in mobilising a rig so quickly and showing clear evidence of technical nous!

With Helium discovered in all target horizons and Hydrogen thrown into the mix, successful appraisal could mark a significant re-rate for Helix given the company reckon they can get the well into production in around a year.  

The transition to production will involve building a processing plant that can deliver up to ~55,500 Mcf per annum. The company plan to then sell the helium to Tier 2 distributors end end-users by-passing industrial majors to get the best possible prices.  Given the short time-frame to production and that the company clearly know how to sell into the end market, Helix could be throwing off c.$40m in FCF per annum from Ingomar Dome in as little as 12 months from discovery.

Rudyard in the Mix

Lets not forget Rudyard either. 

The Rudyard project is a discovery with previously identified commercial quantities of helium where two adjacent wells have tested up to 1.3% helium with significant flow rates. The project gives Helix a maiden contingent resource of 0.48Bcf

The company plan to do an appraisal drill at Rudyard immediately after the drilling campaign at Ingomar where an extended flow test over c.30 days will allow the company to convert Contingent Resources into Reserves and fast-track the project towards commercial production.  Upon completion of successful flow-testing the company plan to use the appraisal well as a production well.

You can read my full Helix research note here where I go into detail on the projencts, the Helium Market and provide some interesting peer comparisons showing the upside potential!

Helix is now 'back in play' and the coming weeks look very exciting for investors !