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Helium Evolution Incorporated’s (TSXV:HEVI) chief executive is confident North American Helium’s drilling activities at HEVI’s asset in southern Saskatchewan will yield some great results that will prime its project for development.
“Part of our deal with North American Helium (NAH) is that they’re going to be drilling a number of exploration wells on our land. They also have production facilities at hand. So should they make a discovery, the idea is that it’ll go to development quickly and to production quickly,” explained Greg Robb, president and CEO of HEVI.
HEVI has partnered with NAH for a farmout agreement for its land asset in Saskatchewan, offering near-term drilling catalysts that can potentially accelerate cash flow generation for HEVI without incurring up-front capital costs.
As part of the partnership terms, NAH will be drilling between five and eight wells over a period of up to 18 months, which will likely result in about 60 to 80 kilometers of new seismic, according to Robb.
“We’re in the data gathering stage of this play at this point,” he explained. “Because of the amount of data in this play… we would expect, on the exploration side, that they would hit on the order of one in three or one in four. And this is with a heavy seismic database to be drilling on. When they do get discoveries, they tend to drill three to five development wells. So of the eight wells (NAH is) going to draw for us, we’re expecting a success of maybe two or three, and then development to follow up on that. And that’ll keep us busy going into the second half of 2023.”
The chief executive said with current efforts by the United States and Canada to onshore the production of critical elements, like helium, there is a huge opportunity for the company to establish a domestic supply chain.
“The more we can produce locally or in North America, the better for us. And the United States currently is about 30 percent of all helium demand. With this onshoring that should only increase,” Robb said.
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The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.