String of Pearls: two leads become one larger lead
This morning our helium Investment, Noble Helium (ASX:NHE), announced that two of its leads on the south western end of its North Rukwa project are in fact a single much larger Basin Margin Fault Closure Play.
A Basin Margin Fault Closure Play is a specific type of gas lead that has 100% success to date for oil and gas in the East African Rift System (EARS) basins of Uganda and Kenya (14 discoveries from 14 wells).
We think this is promising for NHE’s prospects ahead of its upcoming two well drilling program. Below is a great image which shows the geological similarities between the South Lokichar Basin in Kenya and NHE’s North Rukwa project:
As above, the “String of Pearls” is a series of leads that extend along the sides of the basin. This was part of our original NHE Investment Thesis as per our NHE Investment Memo from a year ago:
Across the Kachinga and Dagaa leads (which the company now sees as one lead) there is a company-estimated, unrisked, summed mean Prospective Helium Resource of 22.5 Bcf.
That brings NHE to a Drillable Prospect Inventory to 39.0 Bcf when including the two wells that NHE intends to drill in Q3.
NHE believes that the Kachinga/Dagaa lead could mature into a drillable prospect - more quality targets is always a good sign.
What’s more, NHE thinks that it is likely the gas trapped here is “composed predominantly of nitrogen and helium” which is “green” hydrogen.
We think that green hydrogen could one day command a premium to hydrogen produced using hydrocarbons, so if proven out, this would be another good result for NHE.
What’s next for NHE?
- Resource update 🔄
- Farmout partner secured 🔄
- Rig contract executed 🔄
- ⚠️The Big One: Drilling ⚠️ 🔄
To read more about this upcoming newsflow and see our rough calculations on what NHE’s project could be worth, read our latest NHE note: Multiple Interested Parties in NHE’s Project.
