Mendell Helium Partners with M3 Helium and Scout Energy for Low-Cost, High-Volume Production

Highlights:

• M3 Helium Secures Extensive Project in Kansas: M3 Helium’s farm-in agreement with Scout Energy covers the prolific Hugoton gas field, envisioning up to 200 potential wells.
• Favorable Financial Terms Ensure Low Operational Costs: The agreement secures M3 a fixed helium price, fee waivers, and discounted royalties, bolstering its low-cost production model.
• Predictable Offtake Agreements Support Long-Term Growth: The partnership guarantees all production to be purchased at pre-set prices, ensuring revenue stability from 2026 to 2029.

Article:

Mendell Helium PLC has announced a transformative partnership that places it in a leading position within the helium industry. Through an option to acquire M3 Helium Corp, a Kansas-based company, Mendell has gained a foothold in a large-scale helium project in the Hugoton gas field, spanning over 161,280 acres in Kansas. M3 Helium, through a recent farm-in agreement with Scout Energy, has positioned itself to extract helium on a low-cost basis with significant infrastructure and strategic advantages.

Mendell Helium, formerly known as Voyager Life Science before its rebranding in June, has been actively pursuing helium-focused ventures. The partnership with M3 Helium and Scout Energy opens a pathway for Mendell to deliver substantial helium volumes, targeting an output model designed to balance operational efficiency with long-term revenue security.

Large-Scale Development in the Hugoton Gas Field

The agreement between M3 Helium and Scout Energy initiates a development plan in Kansas’s Hugoton gas field, a highly prospective area for helium extraction. This project envisions drilling at least 25 new wells, with potential expansion to 200 wells, offering significant production potential. Hugoton, historically known for its natural gas reserves, holds substantial helium reserves, making it an ideal site for scaling production.

Through this agreement, M3 Helium secures exclusive access to one of the world's largest and most established helium production regions. With M3 Helium spearheading operations, the project stands to yield substantial helium production for Mendell Helium, supporting the company’s expansion in the helium market.

Favorable Terms and Infrastructure Access for Cost-Efficient Production

The farm-in agreement provides M3 Helium with several advantages that streamline costs and improve operational efficiency. Scout Energy has agreed to waive gathering and processing fees for M3’s helium production in exchange for methane output. This arrangement is set to lower operational expenses while guaranteeing that M3 Helium’s product has a direct path from extraction to processing through Scout’s established infrastructure and nearby Jayhawk processing facility.

The project also guarantees a fixed helium price from 2026 through the end of 2029, helping M3 Helium mitigate price volatility and secure predictable revenue. Additionally, M3 benefits from discounted royalties and reduced operating expenses, with an option to first refusal over royalty costs. M3 Helium is required to pay a fee when drilling begins or by March 2025, ensuring timely progress toward production goals.

The financial structure of the agreement highlights the advantage M3 Helium holds in maintaining a low-cost model. CEO Nick Tulloch contextualized the favorable terms, noting that the nominal fee required upon drilling commencement represents only a fraction of what a conventional lease would cost, given the land's implied value.

Guaranteed Offtake for Predictable Long-Term Revenue

One of the standout features of M3 Helium’s partnership with Scout Energy is the guaranteed offtake agreement. Under this arrangement, all helium produced will be sold at pre-set prices from 2026 to 2029, ensuring a stable revenue stream for the company. This predictable pricing provides financial stability and allows M3 Helium to focus on operational performance rather than market fluctuations, a considerable advantage in an industry often subject to price swings.

Nick Tulloch emphasized that the agreement with Scout Energy offers a level of predictability that is rare in the natural resources sector. The combination of low production costs, fixed pricing, and comprehensive infrastructure support positions M3 Helium—and by extension, Mendell Helium—favorably within the helium market.

Positioning Mendell Helium in a High-Growth Market

With global demand for helium rising due to its critical applications in technology, healthcare, and scientific research, Mendell Helium’s partnership with M3 Helium and Scout Energy comes at an opportune time. The fixed-price offtake agreement not only secures a market for Mendell’s future production but also aligns with its low-cost approach, reinforcing Mendell’s ability to deliver value.

Mendell’s acquisition option with M3 Helium provides a strategic advantage in scaling operations within a proven helium-producing region. The access to established infrastructure through Scout Energy’s gathering system and processing facilities simplifies the production pathway, enabling Mendell to minimize capital expenditures typically associated with new production projects.

Outlook: Mendell Helium’s Growth Prospects and Market Strategy

As an Aquis Exchange-quoted company, Mendell Helium represents an emerging player in the global helium sector, with its sights set on becoming a reliable supplier in a market characterized by increasing demand and limited supply. The option to acquire M3 Helium through a share-based reverse takeover provides Mendell with direct access to this transformative helium project in Kansas, establishing it as a serious contender in the market.

Mendell’s CEO, Nick Tulloch, underscored the company’s straightforward approach to growth, highlighting its advantageous cost structure, proven production region, and established infrastructure partnerships as defining factors. This focused strategy is expected to enable Mendell Helium to leverage the strong global demand for helium while maintaining operational agility and financial discipline.

The agreement with M3 Helium and Scout Energy also grants Mendell a scalable business model that prioritizes low-cost production, minimizing financial risk while setting the stage for profitable expansion. As Mendell works to finalize its acquisition of M3 Helium, it positions itself to meet the long-term demands of a market with significant growth potential, while reinforcing its standing as a nimble, cost-effective producer in the helium industry.

Conclusion: Mendell Helium’s Path to Market Leadership in Helium Production

Mendell Helium’s strategic partnership through M3 Helium’s agreement with Scout Energy signifies a pivotal step in Mendell’s growth journey, aligning with its goal of becoming a leading helium supplier. The extensive farm-in agreement not only provides Mendell with access to a high-potential helium resource but also incorporates financial advantages that support sustained low-cost production. With stable pricing, reduced operational costs, and guaranteed infrastructure access, Mendell is positioned to maximize its growth potential in the helium market.

As Mendell continues to build on its foundational partnerships and infrastructure advantages, the company remains well-positioned to capitalize on helium’s growing demand globally. The upcoming option to acquire M3 Helium through a reverse takeover will cement Mendell’s stake in the Kansas helium project, propelling it toward long-term success in a competitive and strategically valuable industry.