Opened: 08-Apr-2022
Shares Held at Open: 3,925,926
What does NHE do?
Noble Helium (ASX:NHE) is a helium exploration company working to define a helium resource in the East African Rift (Tanzania). If proven, this resource has the potential to be the world’s third largest helium reserve behind the nations USA and Qatar, and the largest ever reserve held by a single company.
What is the macro theme?
Helium is a critical part of the semiconductor (computer chip) supply-chain and cannot be substituted across most of its other industrial uses. We expect helium demand from semiconductors to increase rapidly as the world becomes more technologically advanced and countries seek to localise supply.
Helium prices have increased five fold in 2022 on supply chain issues, geopolitical tension and demand. We expect current price pressures to highlight the importance of helium, and improve investor sentiment around helium companies.
Our Big Bet for NHE
NHE discovers the world’s largest helium reserve held by a single company and is strategically acquired by a major company OR a state owned enterprise to secure supply (USA, China, Qatar).
Why did we invest in NHE?
East African Rift System
Top helium experts highly rate NHE’s geology: - two prominent helium experts think the East African Rift is the best geology in the world for helium and it could house a globally significant resource. (NHE’s Mean unrisked prospective volume of 175.5 billion cubic feet (bcf) across nine structures).
String of Pearls
NHE is aiming to identify drill targets from a series of leads across similar geology in the East African Rift system - known as a “String of Pearls”. If NHE drills the first “pearl” and it turns out successful, it implies all the other leads (pearls) could be successful too. This is similar to what happened to Africa Oil Corp’s “String of Pearls” back in 2012 when it surged 1,200% on a successful result from its first drill in a string of targets in the East African Rift System.
Our past success with basin opening exploration
Some of our best investing success has come from major drilling events in frontier exploration - companies like Elixir Energy, Invictus Energy, 88 Energy and our first ever Top Pick from many years ago - Africa Oil Corp in the East African Rift System. We hope to replicate that success with NHE.
Founder owned and operated
NHE CEO Justyn Wood built the company over many years and holds more than a third of the company’s shares, so is heavily incentivised to deliver value for shareholders. Justyn brings significant East African Rift System experience. He played a key role in opening up the region’s geology with breakthrough exploration success in 2006 with Hardman Resources (~2c to $2.50). He knows the ground NHE is working with.
Exclusive rights to global “Helium Atlas”
Years ago NHE commissioned and licensed the world’s first “helium atlas” from two of the foremost helium experts. Basically it’s many years of research into a detailed database of all the helium prospects in the world and is how NHE first settled on Tanzania. We think access to these experts and their “helium atlas” will also help NHE in selecting future helium project acquisitions.
What do we expect NHE to deliver?
Objective #1: Target generation to produce two drillable targets
With drilling planned for late 2023, over the course of 2022 NHE will use modern exploration techniques to acquire data and then interpret that data to identify drill targets during the course of 2022.
Milestones
Airborne gravity gradiometry (Q2-Q3 2022)
3D seismic (Q2-Q4 2022)
Geochemistry survey (Q2-Q3 2022)
2022 Bonus: Resource re-quantification (Q4?)
2022 Bonus: finalise drill targets (Q4?)
Objective #2: Acquire more Tanzanian permits, strengthen in-country presence
NHE has 14 permits with 9 more to be acquired covering ~4000km2 in total. Along with acquiring these permits, we expect NHE to increase its stakeholder engagement efforts and add to their Tanzanian team:
Milestones
Finalise licence areas (9 Prospecting Licences) (Q2 2022)
Stakeholder engagement (Ongoing)
Tanzanian team additions (Ongoing)
Objective #3: Explore new opportunities
With expert advice and based on their exclusive licence to the “helium atlas”, NHE may look to acquire another helium exploration asset.
Milestones
Acquire a new asset
Objective #4: [NEW] Drill first helium well
[Added Friday 13th October]
NHE’s drill rig has arrived on site in Tanzania, and on October 10th NHE announced that final repairs have been completed on remaining equipment which can now be assembled and commissioned prior to spud (commencement of well).
Milestones
Drill Rig Mobilised
Drilling Commenced
Drilling Update 1
Drilling Results
Objective #5: [NEW] Drill Second Helium Well
Milestones
Drilling Commenced
Drilling Update 1
Drilling Results
What could go wrong?
Permitting risk
While NHE currently holds 14 Prospecting Licences, there are 9 more yet to be granted and there is a risk that these additional licences are not granted.
Exploration risk
NHE may fail to find commercial quantities of helium despite having promising geology on its side. For example, 3D seismic data may not yield the drillable targets they are looking for.
Underlying commodity risk
Helium prices may fall as additional supply comes on line, forcing down prices and reducing investor appetite for new helium resources.
Country risk
Tanzania is an emerging resource jurisdiction and although a change in government has improved the ability to invest in Tanzania, local politics, changes to mining regulations and royalty systems may be a factor in NHE’s future prospects.
Operational risk
If NHE doesn’t achieve operational milestones before the start of the Tanzanian wet season, they could miss the start of the drilling window in 2023, leading to a 12 month delay in drilling. Weather is a factor in NHE’s prospects.
What is our investment plan?
As with our other previous exploration stage oil & gas investments (Helium is a gas) we invest early, well before the main drilling event and will aim to be free carried and have taken profit before the drill results are announced in 2023.
We look to hold at least 50% of our initial position into the first drill result and this is usually a ~3 year strategy. In the case of NHE, this investment plan is truncated to ~1.5 years.
NOTE: Our selling plan must adhere to our trading blackout policy and IPO escrow conditions shown below:
Disclosure: S3 Consortium Pty Ltd (The Company) and Associated Entities own 3,925,926 NHE shares and 1,851,852 options, The Company’s staff own 40,000 NHE shares at the time of publishing this article. The Company has been engaged by NHE to share our commentary on the progress of our investment in NHE over time.
NHE’s Probable Free Gas Cap 6x Bigger Than Expected? This Upcoming Drill Will Find Out…
Mar 6, 2024
Mar 6, 2024 |
8 min
Noble Helium (ASX:NHE) has announced a “Probable free gas cap at Mbelele 6x larger than originally mapped.”
A Globally Significant Helium Discovery? Bigger than anyone expected…
Dec 4, 2023
Dec 4, 2023 |
31 min
Noble Helium (ASX: NHE) is chasing potentially the largest helium resource in the world owned by a single company
Rising off a low base?
Nov 11, 2023
Nov 11, 2023 |
10 min
WA lithium exploration has been a shining light in an otherwise dark sentiment small cap market.
Just a couple more days… (again)
Nov 6, 2023
Nov 6, 2023 |
7 min
On the weekend, we wrote about the potential of IVZ and NHE making key announcements on their drilling results today… And this morning we got announcements from both:
NHE Reaches Total Depth: Announcement Explained
Nov 2, 2023
Nov 2, 2023 |
11 min
Today’s Noble Helium (ASX: NHE) pre market open announcement was… a bit confusing? In this note we look into what today's announcement means for NHE investors and its drill program.
NHE lab results increase net pay by over two-three times.
Feb 7, 2024
Feb 7, 2024 |
2 min
Helium Investment Noble Helium (ASX: NHE) just announced the lab results from its two well drill program at its project in Tanzania.
Noble Helium CEO Justyn Wood on Positive Progress at Tanzanian p
Nov 3, 2023
Nov 3, 2023 |
49.1 seconds
The CEO of our helium Investment, Noble Helium (ASX: NHE), Justyn Wood, gave a positive update on the progress of the company’s current drilling program in Tanzania today.
Mbelele-1 Spudded: NHE’s Helium Drilling Event Begins
Oct 27, 2023
Oct 27, 2023 |
55.9 seconds
NHE is chasing a globally significant helium discovery with this drilling and NHE’s CEO and Co-Founder Justyn Wood characterised it as an opportunity to “secure the future of helium and all the technologies it enables, present and future”.
NHE is now days away from drilling its helium well
Sep 28, 2023
Sep 28, 2023 |
1 min
Our helium Investment Noble Helium (ASX: NHE) is now just days away from drilling its helium well in Tanzania.
NHE’s helium project grows with maiden drilling on the horizon
Sep 7, 2023
Sep 7, 2023 |
1 min
Our helium Investment Noble Helium (ASX: NHE) is now a few weeks away from drilling its project in Tanzania and has just increased the size/scale of its project.
Free flowing gas well, two clarifications and a Zimbabwe gas discovery
Dec 9, 2023
Dec 9, 2023 |
10 min
This was the most busy week of major announcements we have seen in our Portfolio in a long time.
The result that stops a nation
Nov 4, 2023
Nov 4, 2023 |
14 min
“Discoveries” in oil & gas exploration are rare. The majority of attempts fail. …but a rare few are lucky enough to declare an official “discovery”.
Next Cap Raise - for Sophisticated Investors
Oct 14, 2023
Oct 14, 2023 |
9 min
After years of preparation, our investment Noble Helium (ASX: NHE) nears its crucial drilling phase for a monumental helium project in Tanzania. Meanwhile we have launched our new "Next Cap Raise" mailing list which offers exclusive investment opportunities for certified s708 sophisticated investors.
Mid Week Oil & Gas Update: EXR, IVZ, NHE
Oct 4, 2023
Oct 4, 2023 |
8 min
Over the next two months there are three small cap companies with drilling events we expect should deliver a significant share price reaction when results come out, and even in the lead up to results.
Share price catalysts we expect in the next 12 weeks
Sep 23, 2023
Sep 23, 2023 |
11 min
In the upcoming 12 weeks, expect a flurry of activity in the small-cap market, with companies striving to release crucial news and achieve significant share price impacts before the Christmas break.
