NHE raises $13.5M to fund drilling, directors buy ~$1M

Published 05-JUN-2023 12:43 P.M.

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Our helium Investment Noble Helium (ASX: NHE) just raised $13.5M at 18c per share in the lead up to its two well drill program planned for Q3-2023.

NHE will start using the cash to purchase long lead items and will now work toward executing a well services agreements.

NHE’s plan is to be on the ground drilling the first well (Mbelele) in September.

Interestingly the company’s directors also took up a large chunk of the raise by taking $1.055M of the placement (subject to shareholder approvals).

Typically director buying is a sign of confidence so we think the commitment is a strong sign heading into the company’s drill program in Q3.

We tried to participate in this placement, but it was very tightly allocated and we couldn’t get a position.

Webinar for shareholders

This morning we also received the details for a webinar NHE’s Managing Director Justyn Wood and Chairman Shaun Scott will be running on Thursday (8 June 2023).

Any shareholders who want to view the webinar can register here:

Time: 11am – 12pm AEST (9am – 10am Perth time) Thursday, 8 June 2023

RSVP: https://attendee.gotowebinar.com/register/2116931949912717397

Dial-in Number: +61 2 9091 7604

Audio Access Code: 575-456-376

We will be listening in.

An update on NHE’s farmout

In today’s announcement NHE confirmed that its Farmout Heads Of Agreement (HOA) was terminated, meaning the company has chosen to go ahead with the drilling on its own.

We like this approach by the company because its two wells are both onshore and down to shallow depths meaning the wells should be relatively low cost compared to other oil/gas drilling events we have seen in the past.

NHE during the farmout process was expecting the wells to cost ~$12-13M each, now Managing Director says the costs could be ~$6m + taxes.

Managing Director explains it well in the following webinar:

On top of this the farmout would have seen NHE give up 50% of its project.

NHE can avoid giving up such a large % of its project and if a basin opening helium discovery is made NHE will be able to negotiate with potential project partners with a derisked project as 100% owners.