Helium Evolution Incorporated ("HEVI" or the "Company"), a Canadian-based helium exploration and production company focused on finding, developing and commercializing assets in southern Saskatchewan, provides an update on the first of two wells that will be drilled by year end 2022 (the “First Test Well”), NAH Grasslands 13-30-2-8W3, on farmout lands within Block 1 at Mankota in Saskatchewan.
The First Test Well was drilled and fully funded by HEVI’s farmout partner, North American Helium (“NAH”), pursuant to a previously announced farmout arrangement (see press releases dated October 21, 2022, and June 28, 2022). After reaching total depth over the weekend, NAH has informed HEVI that the open hole portion of the First Test Well will be abandoned, but that NAH is electing to suspend the cased hole portion of the well to afford optionality and the ability to re-enter it at a later date, potentially to drill a sidetrack to another target. NAH is expected to spud its second licenced location on HEVI lands at NAH 1-1-6-10W3 (the “Second Test Well”) in mid-December.
With approximately $10 million in cash and liquid assets, HEVI is well positioned to maintain financial flexibility given the Company benefits from five, to up to eight, wells that NAH will drill and fully fund, leaving HEVI with significant optionality to pursue other targets across the Company’s 5.5 million acres of helium rights. The Company can also leverage NAH’s extensive expertise, current data as well as future seismic data to help expand understanding of the play and further build out its existing technical work to support the selection of HEVI’s future 100% operated drilling targets.
“The data provided from this First Test Well affords both NAH and HEVI with valuable insights and additional understanding of what is effectively still a ‘wild-cat’ play,” said Greg Robb, President & CEO of HEVI. “NAH’s Second Test Well will be drilled before year end 2022, providing HEVI with potential near-term upside, while maintaining the ability to conserve HEVI’s capital. We look forward to continued collaboration with the NAH team to prove up the prospectivity of our large land base, particularly in light of recent indications that helium prices have further expanded, rendering our forecast economics incredibly attractive.”