GGE signs MoU for US helium project - what comes next?

Published 13-MAY-2025 11:36 A.M.

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Our Investment Grand Gulf Energy (ASX: GGE) just put out an update on its US helium project.

GGE signed a non-binding MoU with TSX listed Sage potash to collaborate and share costs on exploration in and around GGE’s ground.

At the moment, Sage Potash owns the potash rights to the areas that cover the MoU and GGE controls helium and other commodity rights.

Our key takeaways from the MoU were the following:

GGE and Sage will share costs on a 3D Seismic Survey on a 50/50 basis
Companies will look to share the costs of an exploration well.
GGE and Sage will also discuss the potential to share the costs of infrastructure development.

All of this will mean reduced costs in holding and advancing GGE’s helium project, which is exactly what we want to see with GGE’s recent move into Offshore Namibia.

Setting up the US helium asset to be advanced at a much lower cost makes it more likely GGE can get more value out of the project.

It also means GGE can preserve as much cash as possible to re-allocate to its Offshore Namibia asset (once that application is granted).

We are backing GGE’s move into Offshore Namibia and swing for the fence style oil exploration BUT we think there is still a lot of value in GGE’s US helium asset.

At its helium project GGE has already managed to:

✅ Confirm a helium discovery - GGE’s first well hit a 61m gross gas column (net pay of ~31m), returned 1% helium to surface.
✅ Extend its initial discovery - Jesse-2 was drilled ~1.5 miles away from Jesse-1A, extending GGE’s helium discovery.
✅ Flow helium grades up to 0.9% - GGE flowed gas from its Jesse discovery with peak flow rates of ~0.95mmcfd over the 60-hour flow test.Helium grades were up to ~0.9%.

Before macro sentiment for helium projects turned negative, GGE had also put together a plan to drill its third well.

We think GGE’s US helium project is a good one to hold onto in the background at as low a cost as possible while we wait for the helium macro to improve…

For now though we are waiting for GGE’s offshore Namibian exploration license application to be granted.

The latest on GGE’s move into Offshore Namibia:

Just last week we put out a note on the latest discovery made by a consortium which includes supermajor BP.

That discovery was made to the south of GGE’s application - in the Orange Basin where all the other mega discoveries have been made in Namibia.

GGE’s project is in the Walvis Basin, Offshore in Namibia (to the north of those discoveries).

Our view is that as the Orange Basin becomes more mature, exploration activity will slowly move north, and by that time GGE would have had its application granted and be right in the middle of an exploration hotspot.

We already know that the Walvis Basin has the same source rocks as the Orange Basin, so far there just hasn’t been any major discoveries made in this area yet… here is where the Walvis Basin sits relative to the Orange Basin:

So far most of the activity in Namibia has been focussed in and around the Orange Basin (for obvious reasons), but we are seeing the major operators slowly start to move north with their planned wells.

Chevron entered PEL 82 just a few months ago, and it sits just north of GGE’s (pending) block.

Chevron is ‘considering’ drilling an offshore well here in 2026 or 2027.

Here is where Chevron's farm in sits relative to GGE’s application:

This map from 2023 also shows how, after those major discoveries in the Orange Basin, the planned wells are slowly starting to shift towards the north (into the Walvis Basin where GGE is).

(Source)

Our view is that as more capital and expertise flocks into Namibia, the value of ground in this part of the world will increase simply because of how close it will be to big operating assets with huge sunk costs into infrastructure.