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Helium One Global Ltd (LSE:HE1) provided an encouraging update on the extended test of its Itumbula West-1 well in Tanzania, along with news of a strategic acquisition that broadens the group's geographic footprint and offers the potential for near-term cash flow.
The exploration team successfully flowed helium concentrations of up to 7.6% at an average of 786 barrels per day from the faulted Karoo interval at Itumbula. During the five-day test, the well averaged 5% helium, with a notable decrease in hydrogen concentration as helium levels increased, reaching a maximum of 1.2% hydrogen.
Chief executive Lorna Blaisse expressed satisfaction with the results, describing the project as a "globally unique helium play" that required significant effort and expertise across multiple disciplines to understand the system in the southern Rukwa Basin.
Moving forward, the company plans to conduct a second extended well test on the fractured basement horizon of the well.
In a separate announcement, Helium One revealed plans to acquire a 50% interest in ASX-listed Blue Star Helium's (ASX:BNL) Galactica-Pegasus asset in Colorado.
The Galactica-Pegasus project, located on a known helium fairway in Las Animas County, Colorado, hosts discovery wells producing up to 6% helium and is close to existing infrastructure. The project is estimated to contain 675 million cubic feet of helium at an average grade of 3% on a P50 basis.
The full development program includes 15 wells and CO2 processing facilities, with work on six wells scheduled for the fourth quarter, aiming to bring them on stream in the first half of the following year.
To support these initiatives, Helium One announced plans to raise £6.43 million at 1.09p per share.
CEO Blaisse highlighted the significance of the partnership with Blue Star, emphasizing the expansion of the company's global footprint in the helium sector at a crucial time. While projects in Tanzania remain the primary focus, this development opportunity offers a path to potential near-term cash flow, aiding in the advancement of the Tanzanian asset. The company now holds a portfolio of two potential near-term revenue-generating projects.
