NHE drilling of first well on track for Q3 2023

ASX:NHE

Published 19-JUL-2023 11:00 A.M.

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Our helium Investment Noble Helium (ASX: NHE) is on track to drill its first helium well this quarter.

This morning NHE re-affirmed its timeline with an update on its drill rig.

NHE’s rig (Drillmec HH102 - Rig #16) is now in the drilling contractors (Marriot) yard going through routine maintenance and testing before it is shipped to Tanzania.

NHE expects the rig to be on-site and ready to spud the Mbelele-1 in Q3 2023.

We also noticed NHE mention that the company was receiving “inbound interest from other Operators in Tanzania for access to the rig once the upcoming campaign has been completed” - this could mean the rig stays in Tanzania making remobilisation a lot easier for NHE in the future.

NHE is going into the drill program having raised $13.5M via a placement at 18c per share - fully funding its first well.

We think the fact that NHE have managed to lock away financing so early means that any investors looking to get exposure to NHE’s drill program between now and drilling will need to buy shares on market.

Typically investors will look to wait for capital raises to buy a meaningful amount of shares in a company doing a high impact drill program like NHE. With no capital raise needed before drilling starts this won't be possible for NHE.

As with most high impact oil and gas wells we expect NHE may move into the “pre-drill speculation” stage where a company’s share price starts moving higher as investors start to build in expectations of what success would look like for the company.

What’s happening at NHE’s Tanzanian peer?

We noticed last week that NHE’s Tanzanian peer Helium One started moving up the charts.

Helium One’s market cap almost tripled to now sit at ~$145M.

NHE on the other hand is capped at just $67M (at 25c per share).

For context - Helium One’s unrisked prospective resource estimate sits at ~138 billion cubic feet whereas NHE has an unrisked prospective resource of ~176 billion cubic.

Helium One is also looking to drill a well at its helium project in Tanzania this year.