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Highlights
- Helium One Global started new drilling operations at the Tai-2 exploration well in Tanzania.
- The news prompted the company’s shares to rise by 30 per cent, making it the highest riser across the LSE.
AIM listed helium production company Helium One Global Ltd’s (LON:HE1) shares surged to 30 per cent in today’s trading session after the company announced the beginning of drilling operations at the Tai-2 exploration well.
The well is located at the Rukwa project site in Tanzania. Helium One became the highest riser across the London Stock Exchange in today’s session due to the positive investor sentiment following the Tai-2 drilling operations announcement.
Helium One Global Ltd’s (LON:HE1) share price performance
Helium One’s shares were trading at GBX 14.95, up by a whopping 30.00 per cent on 19 August at 13:15 PM GMT+1 following the news.
Comparatively, the FTSE AIM All-Share index, which it is a part of, was trading at 1,258.55, down by 0.62 per cent.
(Image Source: Refinitiv)
The company’s market cap stands at £70.78 million, and its year to date return is at 106.23 per cent.
Related Article: Helium One and RTC Group - Is it the right time to buy these AIM stocks?
Drilling operations details
The company announced that this is the second exploration well in the Tai play, which is set to explore the Lake Bed region. Helium One had earlier identified the Lake Bed region during its Tai-1 operations, however, the company had not done a complete evaluation of this prospect.
The Tai-1 prospect had earlier proved that the Rukwa Basin has a working helium system, thereby significantly reducing the risk involved in exploring the Tai-2 well.
Tai-2 is located 20 meters from the Tai-1 well, thus allowing the firm same drill pad. This helped Helium one to benefit from not putting additional relocation costs and time for mobilising a new rig.
Tai-2 is Helium One’s first exploration initiative in 2021 and will be testing shallower prospects that have not been fully evaluated in Tai-1. The firm has a 100 per cent ownership of the Rukwa basin, which has licensing for the 3,500 square meters of the untested area at the basin.
The company had announced its Tai-1A exploration results last week, reporting encountering 5 intervals in the Karoo formation encounters and having 15 per cent to 20 per cent in porosities. The results had caused the shares prices to drop sharply by over 37 per cent.
Bottom Line
While the commencement of the Tai-2 drilling operations has been cheered by the market, the stock is still below its price prior to its Tai-1 announcement. Also, as the stock is currently trading about 50 per cent below its 52-week high of GBX 29.00, it still holds strong upside potential.
