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Mendell Helium #MDH – Update on progress
Mendell Helium is pleased to provide the following overview of M3 Helium Corp.’s (“M3 Helium“) assets following a visit in October 2024 by Nick Tulloch, Chief Executive Officer of the Company, to Kansas, USA.
As announced on 27 June 2024, the Company has an option to acquire M3 Helium Corp., a producer of helium which is based in Kansas and holds an interest in nine wells. There is no certainty that the Company’s option to acquire M3 Helium will be exercised, nor that the enlarged group will successfully complete its re-admission to trading on the AQSE Growth Market.
Highlights
M3 Helium has three potential “company maker” projects
- Farm in to Scout Energy Partners’ Hugoton acreage
- 5.1% helium in its high pressure Rost 1-26 well
- “Big frack” at its Nilson well is producing rising flow rates
Farm in to Hugoton acreage
As announced on 6 November 2024, M3 Helium entered into a farm in agreement with Scout Energy Partners (“Scout Energy”) covering 161,280 acres (252 square miles) of the Hugoton field, one of the best known gas fields in the world. The agreement includes a minimum target of 25 new wells but M3 Helium estimates a potential 100 – 200 well opportunity within this acreage.
All production from new wells will be delivered to Scout Energy’s gathering system and the Jayhawk processing facility (which produces 4% of the world’s helium). The offtake is based on a fixed helium price with an annual price escalator based on the consumer price index through to the end of 2029. The partnership with Scout Energy also includes discounted royalties and operating expenses. No payments are due from M3 Helium until drilling commences or 31 March 2025, if drilling has not commenced prior to 31 March 2025 (and there are no penalties on M3 Helium in the event that it does not proceed with the agreement).
In addition, this exclusive agreement with Scout Energy includes a right of first refusal over any other farm outs in Scout Energy’s 1 million acres in Kansas.
Rost 1-26 well in Fort Dodge
M3 Helium’s flagship well, located in its Fort Dodge prospect, was tested by Shamrock Gas Analysis, Inc. as containing a gas composition of 5.1% helium in July 2024. Thurmond-McGlothlin, LLC also tested a well pressure at 302.7 psi in July 2024. The flow rate was measured at 47,100 cubic feet per day (47.1 Mcfd), with this result being achieved even though brine levels were 1,058 feet over the perforations.
As announced on 9 September 2024, M3 Helium commenced the installation of its Pressure-Swing Adsorption (“PSA”) modular processing unit to enable purification of helium onsite along with de-watering the well ahead of production. The latter exercise has led to two conclusions.
Firstly, the likely level of water hauling could be 800-1,000 barrels per day in which case M3 Helium will make use of a nearby former oil well which can be repurposed as a disposal well. Although there will be an upfront cost, this will be more economic, and payback is expected within months.
Secondly, and more significantly, expectations are that potential flow rates from the Rost well could exceed previous expectations. The table below illustrates the well’s revenue capability between its existing production rate through to the maximum capacity of the onsite PSA.
| Production(Mcf/day) | 50 | 150 | 250 | 500 | 750 |
| Daily revenue ($) | 765 | 2,295 | 3,825 | 7,650 | 11,475 |
| Monthly revenue ($) | 22,950 | 68,850 | 114,750 | 229,500 | 344,250 |
| Annual revenue ($) | 275,400 | 826,200 | 1,377,000 | 2,754,000 | 4,131,000 |
The above illustrations are based on a helium sale price of US$300 per Mcf and assumes nil value for any other gases or liquids produced by the well.
Nilson “big frack”
On 26 September 2024, the Company announced a second, significantly larger frack, on the Nilson well owned by M3 Helium. This programme was innovatively funded by local investors and one of the contractors who committed US$170,000 in aggregate to cover the costs for a 25% economic interest in the well.
The frack injected 170,000 gallons of gelled water along with 150,000 pounds of sand. As far as M3 Helium’s management are aware, this was the Hugoton field’s first large water-based frack stimulation in several decades.
The response from the Nilson well has been impressive. Typically post-frack production results in a spike and then a subsequent decline in the well. However, in Nilson’s case, production has steadlily risen by a little under 1 Mcf per day at around 1 cubic foot per 2 minutes. This is illustrated in the graph below:
At present, there is insufficient data to determine when or where the Nilson well might peak but the M3 Helium team have been studying an analogous frack by Amoco in 1992 which took around 8 months to peak. It is too early to say whether this case can be used as a reliable guide, but the table below illustrates the well revenue capability between its existing production rate through to where the rate could peak should it continue to grow at the same rate for 8 months.
| Production(Mcf/day) | 50 | 100 | 150 | 200 | 300 |
| Daily revenue ($) | 143 | 285 | 428 | 570 | 855 |
| Monthly revenue ($) | 4,275 | 8,550 | 12,825 | 17,100 | 25,650 |
| Annual revenue ($) | 51,300 | 102,600 | 153,900 | 205,200 | 307,800 |
The above figures are based on a helium sale price of US$350 per Mcf (higher than Rost given that Nilson is tied into Scout Energy’s gathering system) and a NGL (natural gas liquids) sale price of US$0.75 per Mcf.
The significance of Nilson’s performance, aside from the value within this well, is that it provides a reference point and a pathway with which to develop other wells in the region, particularly within the farm in agreement with Scout Energy referred to above.
Nick Tulloch, Chief Executive Officer of Mendell Helium, said: “Since entering into the option to acquire M3 Helium, we have worked hard to develop the company’s asset base and, as shown in recent announcements and today’s update, the results have significantly exceeded our expectations. Alongside the farm in with Scout Energy, which provides an immediate and cost-effective path to scale our business, the exceptional performance of our flagship Rost well could potentially become a significant contributor to M3 Helium’s cashflow in the coming months.
“Meanwhile M3 Helium’s innovative larger frack at the Nilson well has provided ample evidence to support further use of this technique to stimulate increased production in Hugoton wells, something that could prove to be a crucially important factor as M3 Helium develops its farm in programme.
“M3 Helium is fortunate to have several advantages – the Hugoton location puts the company in prime production territory, it has access to infrastructure through Scout’s Energy’s gathering system to facilitate rapid monetisation of production, a fee payment structure geared to drilling activities and a farm in agreement along with the right of first refusal over any other Scout Energy farm outs that provides a platform through which our Company can exponentially scale up its operations.”
The Directors of the Company are responsible for the release of this announcement.
Nick Tulloch will be presenting at the Aquis Showcase on 12 November 2024. Details of the event are available at https://www.eventbrite.co.uk/e/aquis-showcase-tickets-951428316707.
ENDS
Enquiries:
| Mendell Helium plc
Nick Tulloch, CEO
|
Tel: +44 (0) 1738 317 693
nick@mendellhelium.com https://mendellhelium.com/ |
| Cairn Financial Advisers LLP (AQSE Corporate Adviser)
Ludovico Lazzaretti/Liam Murray
|
Tel: +44 (0) 20 7213 0880 |
| SI Capital Limited (Broker)
Nick Emerson |
Tel: +44 (0) 1483 413500 |
|
Stanford Capital Partners Ltd (Broker)
Patrick Claridge/Bob Pountney
|
Tel: +44 (0) 203 3650 3650/51
|
| Brand Communications (Public & Investor Relations)
Alan Green
|
Tel: +44 (0) 7976 431608
|
Overview of M3 Helium
Mendell Helium, formerly Voyager Life plc, announced on 27 June 2024 that it has entered into an option agreement to acquire the entire issued share capital of M3 Helium through the issue of 57,611,552 new ordinary shares in Mendell Helium to M3 Helium’s shareholders. The exercise of the option will constitute a reverse takeover pursuant to AQSE Rule 3.6 of the Access Rule Book and is subject to, inter alia, publication of an admission document.
M3 Helium has interests in nine wells in South-Western Kansas of which five (Peyton, Smith, Nilson, Bearman and Demmit) are in production. Eight of the company’s wells are within the Hugoton gas field, one of the largest natural gas fields in North America. Significantly these wells are in the proximity of a gathering network and the Jayhawk gas processing plant meaning that producing wells can quickly be tied into the infrastructure.
The nineth well is in Fort Dodge and was tested in July 2024 as containing 5.1% helium composition. Although not within direct access to the gathering network, M3 Helium owns a mobile Pressure Swing Adsorption production plant which could be used to purify the helium on site.
FORWARD LOOKING STATEMENTS
This announcement includes “forward-looking statements” which include all statements other than statements of historical facts, including, without limitation, those regarding the Company’s financial position, business strategy, plans and objectives of management for future operations, or any statements preceded by, followed by or that include the words “targets”, “believes”, “expects”, “aims”, “intends”, “will”, “may”, “anticipates”, “would”, “could” or “similar” expressions or negatives thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company’s control that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which the Company will operate in the future. These forward-looking statements speak only as at the date of this announcement. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based unless required to do so by applicable law.
Mendell Helium #MDH – M3 Helium acquires further producing wells in the Hugoton Field
Mendell Helium is pleased to announce that M3 Helium Corp. (“M3 Helium”) has acquired interests in three further wells on the western side of the Hugoton gas field in Kansas. Two of these wells are in production and the third is believed to be suitable for conversion into a water disposal well.
As announced on 27 June 2024, the Company has an option to acquire M3 Helium Corp., a producer of helium which is based in Kansas and holds an interest in six wells. There is no certainty that the Company’s option to acquire M3 Helium will be exercised, nor that the enlarged group will successfully complete its re-admission to trading on the AQSE Growth Market.
Highlights
- Acquisition of interests in two further producing wells takes M3 Helium’s total number of wells to eight (not including disposal wells)
- No consideration was payable on the acquisition
- M3 helium’s management have identified a path of action to bring the wells to profitability
M3 Helium has acquired an 85 per cent. interest in the Bearman, Demmit and Cockerham wells which are all located on the western side of the Hugoton gas field in Stanton County, Kansas. The Bearman and Demmit wells are currently producing 25 Mcf/day in aggregate with a helium composition of approximately 0.6 per cent. The Cockerham well is not currently in production.
The wells are connected to Scout Energy’s Jayhawk gas processing plant via a pipeline operated on vacuum by Energy Transfer LP, one of the largest and most diversified midstream energy companies in North America.
Taking account of water disposal costs, the three wells break even financially at present and, as a consequence, M3 Helium was able to acquire them for nil consideration. The rationale for the acquisition is that M3 Helium’s management have identified certain steps to take to bring the wells to profitability:
- In common with many older wells in the region, helium produced at the Bearman and Demmit wells is not accounted for by the processor, which in this instance is Scout Energy: only the value of methane and natural gas liquids are paid to the producer.If M3 Helium is able to obtain a price for the helium produced then, noting the higher value of helium relative to the other components, this would be transformational for the economics of the two wells.
- To date, water produced by the Bearman and Demmit wells is hauled by truck to a disposal site.With the (current) low production, this is a disproportionately high expense of operating the wells. If the Cockerham well was converted to a water disposal well, the cost of which is estimated at around US$30,000, then it would be economic to increase the frequency of pumping at the Bearman and Demmit wells. This would produce more water, which would then be efficiently disposed of through the Cockerham well, but it would very probably increase the gas production. M3 Helium estimate that this would be at least an additional 25 Mcf/day.
- Acidising the wells is also expected to increase production of gas although it would also produce additional water.Whilst this is not economic at present, it would be a valuable addition to the wells once a disposal well is in place.
Nick Tulloch, Chief Executive Officer of Mendell Helium, said: “Today’s acquisition is a further example of the progress that M3 Helium is able to make due to its connections in the Kansas region. Whilst these are not going to be significant producing wells, the incremental production they will provide M3 Helium is at minimal cost. There is no obligation to spend any funds on the wells but, once the team evaluate the potential advantages of a disposal well, we will be able to assess the ecomomics of extending their production capabilities.
“Through our proposed investment of M3 Helium, we remain committed to increasing our helium production on a cost-effective and rapid basis.”
This announcement contains inside information for the purposes of the UK Market Abuse Regulation and the Directors of the Company are responsible for the release of this announcement.
ENDS
Enquiries:
| Mendell Helium plc
Nick Tulloch, CEO
|
Tel: +44 (0) 1738 317 693
nick@mendellhelium.com https://mendellhelium.com/ |
| Cairn Financial Advisers LLP (AQSE Corporate Adviser)
Ludovico Lazzaretti/Liam Murray
|
Tel: +44 (0) 20 7213 0880 |
| SI Capital Limited (Broker)
Nick Emerson |
Tel: +44 (0) 1483 413500 |
|
Stanford Capital Partners Ltd (Broker)
Patrick Claridge/Bob Pountney
|
Tel: +44 (0) 203 3650 3650/51
|
| Brand Communications (Public & Investor Relations)
Alan Green
|
Tel: +44 (0) 7976 431608
|
Overview of M3 Helium and the Hugoton North Play
Mendell Helium, formerly Voyager Life plc, announced on 27 June 2024 that it has entered into an option agreement to acquire the entire issued share capital of M3 Helium through the issue of 57,611,552 new ordinary shares in Mendell Helium to M3 Helium’s shareholders. The exercise of the option will constitute a reverse takeover pursuant to AQSE Rule 3.6 of the Access Rule Book and is subject to, inter alia, publication of an admission document.
M3 Helium has interests in eight wells in South-Western Kansas of which five (Peyton, Smith, Nilson, Bearman and Demmit) are in production. Seven of the company’s wells are within the Hugoton gas field, one of the largest natural gas fields in North America. Significantly these wells are in the proximity of a gathering network and the Jayhawk gas processing plant meaning that producing wells can quickly be tied into the infrastructure.
The sixth well is in Fort Dodge and was tested in July 2024 as containing 5.1% helium composition. Although not within direct access to the gathering network, M3 Helium owns a mobile Pressure Swing Adsorption production plant which could be used to purify the helium on site.
Mendell Helium #MDH – M3 Helium signs exclusive farm-in agreement for Hugoton field with Scout Energy
Mendell Helium is pleased to announce that M3 Helium Corp. (“M3 Helium”) has signed an exclusive farm in and fixed price helium agreement with Scout Energy Partners (“Scout Energy”) over 161,280 acres of the Hugoton gas field (“Leases”), one of the largest natural gas fields in North America.As announced on 27 June 2024, the Company has an option to acquire M3 Helium Corp., a producer of helium which is based in Kansas and holds an interest in six wells. There is no certainty that the Company’s option to acquire M3 Helium will be exercised, nor that the enlarged group will successfully complete its re-admission to trading on the AQSE Growth Market.
Highlights:
- Farm in covers 161,280 acres (252 square miles) of the Hugoton gas field
- Minimum target of 25 new wells but estimated by M3 Helium’s management to be a potential 100 – 200 well opportunity
- All production delivered to Scout Energy’s gathering system and the Jayhawk processing facility
- Fixed helium price with an annual price escalator based on the consumer price index from 1 January 2026 through to the end of 2029
- Discounted royalties and operating expenses agreed with Scout Energy
- Gathering and processing tariffs waived by Scout Energy in return for methane from the new wells
- Exclusive agreement with Scout Energy includes a right of first refusal over any other farm outs in Scout Energy’s Kansas acreage
- US$1 million due from M3 Helium when drilling commences or by 31 March 2025 (whichever is the earlier). In the event that M3 does not proceed with the agreement no fee will become payable.
Overview of the Farm In Agreement
With a term ending on 31 March 2027, the farm in agreement covers seven townships in the Hugoton gas field, with each township being 36 square miles (23,040 acres). The townships are in south-west Kansas, within Scout Energy’s gathering system and proximate to the Jayhawk gas processing plant which is estimated to process around 4% of the world’s helium, processing approximately 700,000 cubic feet per day of crude helium. Scout Energy is the second biggest producer of helium in the United States.
Under the terms of the agreement, M3 Helium is entitled to nominate drilling locations of its choice subject only to maintaining a distance of 1,500 feet from any existing well operated by Scout Energy. The M3 Helium management team estimate potential for not less than 100 wells within the allocated area and up to 200 wells. The agreement has a minimum commitment of 25 wells by 31 March 2026. The wells are permitted to access the Chase and Council Grove gas formations, being around 3,000 feet deep. M3 Helium management estimate that a conventional oil & gas lease over land of the type included in the farm in agreement would be in the region of US$50 per acre. This implies an indicative farm acreage value of over US$8 million.
M3 Helium has no obligation to make any payment to Scout Energy until the first well is commenced (which must be by 31 March 2025). At that time, a one-off fee of US$1 million is due. Should M3 Helium decide not to proceed with the farm in agreement, then it has no financial liability to Scout. If the fee is not received by Scout Energy on or before 31 March 2025, the agreement will be terminated with no further action required by M3 Helium or Scout Energy.
Each well drilled will be connected to Scout Energy’s gathering system. Scout Energy will manage the operations of the wells and the parties have agreed a discounted rate, reflecting the nature of their partnership. Likewise, royalty payments on production have been reduced by a third to support M3 Helium’s expansion plans.
M3 Helium is able to drill both vertical and horizontal wells under the farm in agreement.
If M3 Helium completes and connects at least 25 wells on or before 31 March 2026, M3 Helium shall have the right, but not the obligation, to continue to drill wells and earn wellbore assignments pursuant to the agreement until 31 March 2027.
In the event that M3 Helium fails to drill a minimum of 25 wells prior to 31 March 2026, it may extend the drilling period for a further 12 months to 31 March 2027 by making a further payment (by 31 March 2026) of an amount equal to the shortfall from the 25 wells multiplied by US$50,000. There are no other payments due to Scout Energy, aside from operating expenses, for the remainder of the agreement.
Provided that M3 Helium remains in compliance with the terms of the farm in agreement, its right to drill wells over the acreage specified in the agreement is exclusive. More importantly, the agreement provides M3 Helium with a right of first refusal should Scout Energy be approached by any third parties to farm into its Kansas lands which, in aggregate, amount to over 1 million acres.
Overview of the Hugoton gas field
The Hugoton gas field, located primarily in southwestern Kansas, western Oklahoma, and the Texas panhandle, is one of the largest natural gas fields in North America, deriving its name from the town of Hugoton, Kansas. Discovered in 1927, this field which covers around 8,500 square miles has significantly contributed to the natural gas supply in the United States. Over its long history, more than 12,000 wells have been drilled in the Hugoton field.
The field’s cumulative production is substantial, with over 30 trillion cubic feet of natural gas produced since being discovered. Additionally, it has yielded substantial quantities of natural gas liquids and helium. The natural gas in the Hugoton field of Kansas and Oklahoma, plus the Panhandle Field of Texas, contains unusually high concentrations of helium, ranging between 0.3% to 1.9%. Because of the large size of these fields, they contain the largest reserves of helium in the United States.
Natural gas is produced from several different rock layers and many individual fields. Most of the gas is produced from two rock units, the Chase and Council Grove groups, that were deposited during the Permian Period, about 280 million years ago.
M3 Helium’s farm in acreage covers an area where production to date has indicated a helium content of around 0.6%. M3 Helium estimates that the average life of vertical wells in the Hugoton gas field is around 30 years and management models an 8% annual decline. Drilling costs are expected to be under $300,000 per well with the possibility of cost savings if several wells are drilled in succession. Tie and frack costs are expected to amount to less than $200,000 with the exact cost being dependent on the size of frack proposed.
Overview of Scout Energy
Scout Energy is a private energy investment manager focused on the acquisition, operation and improvement of upstream energy assets and associated midstream energy infrastructure throughout the contiguous United States. Scout Energy’s portfolio currently consists of over 60 assets currently producing over 110,000 BOEPD from over 22,000 wellbores across more than 4 million acres in eight states: Kansas, Texas, Oklahoma, New Mexico, Colorado, Utah, North Dakota, and Montana.
Management changes at M3 Helium
Nick Tulloch, CEO of Mendell Helium, has been appointed as Chairman of the board of M3 Helium as the two companies work closely together to execute the farm in agreement and finalise the exercise of the Company’s option to acquire M3 Helium. A new COO has also recently been appointed by M3 Helium to oversee the company’s portfolio of projects.
Nick Tulloch, Chief Executive Officer of Mendell Helium, said: “This agreement with Scout Energy is the culmination of several months of research of suitable opportunities within the Hugoton gas field and discussions with the Scout Energy team.
“M3 Helium now has low cost access to some of the world’s most prospective acreage for helium extraction. Furthermore, its partnership with Scout Energy guarantees an offtake of all of its production at pre-determined price levels and low operating costs. Natural resources exploration is inherently uncertain but M3 Helium’s agreement provides a level of predictability that many companies in this sector may never achieve.
“We said at the time of our proposed acquisition of M3 Helium that we would demonstrate a scalable business plan. The framework set out in this farm-in agreement establishes that plan and does so on very advantageous terms.
“To put the financial terms of this agreement in context, M3 Helium’s management estimates that a conventional oil & gas lease over land of the type included in the farm in agreement could be at least US$50 per acre implying an indicative value of the farm in acreage of over US$8 million. The US$1 million fee M3 Helium will pay on commencement of drilling represents just 12% of that, plus M3 Helium also receives access to established infrastructure and processing facilities as part of the arrangements.
“Global demand for helium has naturally generated investor interest in the sector. Across UK quoted companies alone, there are a number of different strategies. Ours is straightforward. We have the right to drill new wells in a proven helium producing region. We have a low cost model, partnered with the biggest operator in the region. And we have access to nearby infrastructure and processing.”
This announcement contains inside information for the purposes of the UK Market Abuse Regulation and the Directors of the Company are responsible for the release of this announcement.
Enquiries:
| Mendell Helium plc
Nick Tulloch, CEO
|
Tel: +44 (0) 1738 317 693
|
| Cairn Financial Advisers LLP (AQSE Corporate Adviser)
Ludovico Lazzaretti/Liam Murray
|
Tel: +44 (0) 20 7213 0880 |
| SI Capital Limited (Broker)
Nick Emerson |
Tel: +44 (0) 1483 413500 |
|
Stanford Capital Partners Ltd (Broker)
Patrick Claridge/Bob Pountney
|
Tel: +44 (0) 203 3650 3650/51
|
| Brand Communications (Public & Investor Relations)
Alan Green
|
Tel: +44 (0) 7976 431608 |
Overview of M3 Helium
Mendell Helium, formerly Voyager Life plc, announced on 27 June 2024 that it has entered into an option agreement to acquire the entire issued share capital of M3 Helium through the issue of 57,611,552 new ordinary shares in Mendell Helium to M3 Helium’s shareholders. The exercise of the option will constitute a reverse takeover pursuant to AQSE Rule 3.6 of the Access Rule Book and is subject to, inter alia, publication of an admission document.
M3 Helium has interests in six wells in South-Western Kansas of which three (Peyton, Smith and Nilson) are in production. Five of the company’s wells are within the Hugoton gas field, one of the largest natural gas fields in North America. Significantly these wells are in the proximity of a gathering network and the Jayhawk gas processing plant meaning that producing wells can quickly be tied into the infrastructure.
The sixth well is in Fort Dodge and was tested in July 2024 as containing 5.1% helium composition. Although not within direct access to the gathering network, M3 Helium owns a mobile Pressure Swing Adsorption production plant which could be used to purify the helium on site.
M3 Helium has also signed a farm in agreement with Scout Energy Partners over 161,280 acres of the Hugoton gas field giving it the potential to drill between 100 – 200 new wells. All production will be handled by Scout Energy’s gathering network and the Jayhawk gas processing plant.
FORWARD LOOKING STATEMENTS
This announcement includes “forward-looking statements” which include all statements other than statements of historical facts, including, without limitation, those regarding the Company’s financial position, business strategy, plans and objectives of management for future operations, or any statements preceded by, followed by or that include the words “targets”, “believes”, “expects”, “aims”, “intends”, “will”, “may”, “anticipates”, “would”, “could” or “similar” expressions or negatives thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company’s control that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which the Company will operate in the future. These forward-looking statements speak only as at the date of this announcement. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based unless required to do so by applicable law.
Mendell Helium plc #MDH (Formerly Voyager Life plc #VOY) – Update on proposed acquisition of M3 Helium. Change of name to Mendell Helium
Mendell Helium is pleased to provide the following update on its option (the “Option”) to acquire M3 Helium Corp. (“M3 Helium”).
As announced on 27 June 2024, the Company has an option to acquire M3 Helium Corp., a producer of helium based in Kansas and with an interest in six wells. There is no certainty that the Company’s option to acquire M3 Helium will be exercised, nor that the enlarged group will successfully complete its re-admission to trading on the AQSE Growth Market.
Highlights
- Option exercise date extended to 31 January 2025
- The Company’s name has changed to Mendell Helium plc
- Three M3 Helium wells in production and revenue generating
- A further well expected to begin production shortly
- Second, larger frack carried out at the Nilson well through project finance
- All M3 Helium wells are proximate to a gathering system or have an on-site purification plant
- Approximately US$487,000 drawn down by M3 Helium from the Company’s loan facility
Overview of M3 Helium operations and future strategy
M3 Helium has made significant progress since the Company entered into an agreement to acquire it. Two further wells, Smith and Nilson, have been tied into the local gathering system and brought into production. A third well, Rost, is expected to commence production shortly. As announced on 26 September 2024, M3 Helium initiated a second, much larger frack on the Nilson well which was designed to stimulate further production.
During the frack, a total of 210,000 gallons of gelled water was pumped into the well (higher than the forecast 170,000 gallons) with pressure reaching 1,500 psi (pounds per square inch) at the peak of the operations (the first frack on that well averaged 550 psi). Seven frack pumps were able to deliver up to 80 barrels per minute of a gelled water and sand mixture. This equated to 12 tonnes of mass per minute. The team will now be assessing the well’s performance over the coming weeks.
As announced on 27 June 2024, these developments have been, with the exception of the project finance for the Nilson frack, funded through the Company’s loan facility to M3 Helium (the “Loan Facility”) that was put in place at the same time as the option. To date, US$487,362 has been drawn down by M3 Helium under the Loan Facility.
The next phase of M3 Helium’s development is to identify further locations for new wells. M3 Helium operates in two locations: the Hugoton gas field, one of the largest natural gas fields in North America, and Fort Dodge. Management believe that expansion opportunities are more limited in Fort Dodge but helium concentrations (5.1% at the Rost well) are likely to be higher. Conversely there are extensive options in the Hugoton and the Company and M3 Helium have developed a good working relationship with Scout Energy Partners, the largest operator in the region and owner of the Jayhwak gas processing plant, a relationship which the M3 Helium board considers is likely to be key to expansion.
Change of name and transaction update
With the extent of the operations undertaken in Kansas since the Company took the Option, there has been inevitable time pressure on the management teams’ time. Alongside these operations, the Company has also published its own audited accounts and, as announced on 30 September 2024, signed heads of terms to dispose of the Company’s existing health & wellness operations to another healthcare business (the “Disposal”).
As a consequence of these activities, the Company and M3 Helium have agreed to extend the date by which the Option can be exercised to 31 January 2025. Terms under the Loan Facility have been correspondingly extended. As previously announced, the exercise of the Option will constitute a reverse takeover pursuant to AQSE Rule 3.6 of the Access Rule Book and is subject to, inter alia, publication of an admission document (the “Admission Document“). The Company’s board clarifies that the new extension date is not a target for exercising the Option. Progress is being made on preparing and auditing M3 Helium’s financials and obtaining a competent person’s report. The Admission Document will also address the Disposal, subject to contracts being concluded with the proposed buyer.
There are no other changes to the Option which will be exercised through the issue of 57,611,552 new ordinary shares in Voyager to M3 Helium’s shareholders. At the current share price, this would value the enlarged group at approximately £3 million.
Reflecting its new proposed business focus, the Company has changed its name to Mendell Helium plc and, once the change of name takes effect, will trade on AQSE Growth Market with the ticker “MDH”.
The Company’s website address (including its investor relations content) will remain www.voyagerlife.uk until it is updated to www.mendellhelium.com.
Paul Mendell, founder of M3 Helium, has been instrumental in that company’s development and the decision to reflect that in the Company’s new name is a fitting endorsement of his ongoing efforts.
Nick Tulloch, Chief Executive Officer of Mendell Helium, said: “As our recent announcements have shown, we have had a very busy summer working with the team at M3 Helium to develop that business. The funds we have loaned to M3 Helium have been put to good use with, in particular, three wells in production, a 5.1% helium concentration tested at the Rost well and a significant frack carried out at the Nilson well. As a result, exercising the Option will give us larger and more advanced operations than we previously envisaged in June 2024.
“It has always been our view that a particular attraction of M3 Helium is its proximity to local infrastructure. Production is an important metric but the ability to deliver helium to market cost-effectively and without restrictions is what can define our business. The speed at which we and M3 Helium have been able to develop their operations is testament to that and the involvement of local investors in the recent Nilson frack, in our view, is a powerful endorsement of our strategy. Natural resources activities are extensive across Kansas and neighbouring states, so investors choosing to back M3 Helium recognises the progress we are making.
“With such an intensive period of expansion, coupled with our own audit and potential disposal of our existing operations, I am sure investors will understand why we have decided to extend the option with M3 Helium. I can assure investors we are working hard to complete the regulatory process but our focus has been on growing the business that may shortly be part of our company. With the progress that is being made, the time was right to change our name to reflect our future focus and I will be pleased to report as Mendell Helium from now on.”
This announcement contains inside information for the purposes of the UK Market Abuse Regulation and the Directors of the Company are responsible for the release of this announcement.
ENDS
Enquiries:
| Mendell Helium plc
Nick Tulloch, CEO
|
Tel: +44 (0) 1738 317 693
|
| Cairn Financial Advisers LLP (AQSE Corporate Adviser)
Ludovico Lazzaretti/Liam Murray
|
Tel: +44 (0) 20 7213 0880 |
| SI Capital Limited (Broker)
Nick Emerson |
Tel: +44 (0) 1483 413500 |
| Stanford Capital Partners Ltd (Broker)
Patrick Claridge/Bob Pountney
|
Tel: +44 (0) 203 3650 3650/51
|
| Brand Communications (Public & Investor Relations)
Alan Green |
Tel: +44 (0) 7976 431608 |
Overview of M3 Helium and the Hugoton North Play
Mendell Helium, formerly Voyager Life plc, announced on 27 June 2024 that it has entered into an option agreement to acquire the entire issued share capital of M3 Helium through the issue of 57,611,552 new ordinary shares in Mendell Helium to M3 Helium’s shareholders. The exercise of the option will constitute a reverse takeover pursuant to AQSE Rule 3.6 of the Access Rule Book and is subject to, inter alia, publication of an admission document.
M3 Helium has interests in six wells in South-Western Kansas of which three (Peyton, Smith and Nilson) are in production. Five of the company’s wells are within the Hugoton gas field, one of the largest natural gas fields in North America. Significantly these wells are in the proximity of a gathering network and the Jayhawk gas processing plant meaning that producing wells can quickly be tied into the infrastructure.
The sixth well is in Fort Dodge and was tested in July 2024 as containing 5.1% helium composition. Although not within direct access to the gathering network, M3 Helium owns a mobile Pressure Swing Adsorptionproduction plant which could be used to purify the helium on site.
Voyager Life #VOY – Helium production commences at two further wells. Sales of helium and methane to generate revenue for M3 Helium
Voyager is pleased to announce that the Smith and Nilson wells owned by M3 Helium Corp. (“M3 Helium”) are now in production and tied into the gathering system owned by Scout Energy Partners (“Scout”). Sales of helium and methane will generate revenue for M3 Helium, and the Company currently anticipates receiving these revenues on a monthly basis.
M3 Helium owns a 100 per cent. working interest in the Smith and Nilson wells, both of which have been previously tested at high pressures capable of producing economic flow rates. The wells recorded respective pressures of 174psi (pounds per square inch) and 180psi respectively (in tests carried out by Precision Wireline and Testing). The tie in to Scout’s infrastructure was concluded recently with production beginning almost immediately thereafter. Scout’s gathering network is connected to the Jayhawk gas processing plant which produces methane, helium, nitrogen and natural gas liquids.
The Company expects that production levels will take a few weeks to stabilise, and at this point, helium content is anticipated to be in the region of 0.635 per cent., based on a competent person’s report previously prepared for M3 Helium by WSP. Management of M3 Helium are accordingly optimistic about the potential revenue capability from the wells.
As previously announced, Smith and Nilson are to the east of the core part of the Hugoton gas field in what is known as the transition zone. It is M3 Helium’s belief that this lesser produced area could provide considerable upside to the company by accessing formations previously overlooked by other operators.
M3 Helium’s next project, which is already underway, is to bring its Rost well at Fort Dodge into production. As announced on 15 July 2024, this has been tested by Shamrock Gas Analysis, Inc. as containing 5.1% helium.
Nick Tulloch, Chief Executive Officer of Voyager, said: “Bringing the Smith and Nilson wells into production is a significant step forward for M3 Helium. The Hugoton gas field is one of the best known sources of helium in the world and, with substantial opportunity to drill further wells in this highly prospective region, M3 Helium now has proof of concept as it looks to further expand its assets.
“The speed at which the two wells were brought into production is another reminder of M3 Helium’s competitive advantage. With access to Scout’s gathering system and its Jayhawk gas processing plant, M3 Helium has the ability to quickly monetise any new wells that it develops.”
“From Voyager’s standpoint, our ultimate focus has always been to build our business to become cash flow positive. The rate of progress and development milestones already achieved by M3 Helium since we announced the acquisition at the end of June gives our management team great confidence that the business we are building can realistically deliver this objective.”
As announced on 27 June 2024, the Company has an option to acquire M3 Helium, a producer of helium based in Kansas and with an interest in six wells. There is no certainty that the Company’s option to acquire M3 Helium will be exercised, nor that the enlarged group will successfully complete its re-admission to trading on the AQSE Growth Market.
This announcement contains inside information for the purposes of the UK Market Abuse Regulation and the Directors of the Company are responsible for the release of this announcement.
ENDS
Enquiries:
| Voyager Life plc
Nick Tulloch, CEO
|
Tel: +44 (0) 1738 317 693
|
| Cairn Financial Advisers LLP (AQSE Corporate Adviser)
Ludovico Lazzaretti/Liam Murray
|
Tel: +44 (0) 20 7213 0880 |
| SI Capital Limited (Broker)
Nick Emerson |
Tel: +44 (0) 1483 413500 |
|
Stanford Capital Partners LLP (Broker)
Patrick Claridge/Bob Pountney
|
Tel: +44 (0) 203 3650 3650/51
|
| Brand Communications (Public & Investor Relations)
Alan Green
|
Tel: +44 (0) 7976 431608 |
Overview of M3 Helium and the Hugoton North Play
Voyager announced on 27 June 2024 that it has entered into an option agreement to acquire the entire issued share capital of M3 Helium through the issue of 57,611,552 new ordinary shares in Voyager to M3 Helium’s shareholders. The exercise of the option will constitute a reverse takeover pursuant to AQSE Rule 3.6 of the Access Rule Book and is subject to, inter alia, publication of an admission document.
M3 Helium has interests in six wells in South-Western Kansas of which three are in production. Five of the company’s wells are within the Hugoton gas field, one of the largest natural gas fields in North America. Significantly these wells are in the proximity of a gathering network and the Jayhawk gas processing plant meaning that producing wells can quickly be tied into the infrastructure.
The sixth well is in Fort Dodge and was tested in July 2024 as containing 5.1% helium composition. Although not within direct access to the gathering network, M3 Helium owns a mobile Pressure Swing Adsorption production plant which could be used to purify the helium on site.
Voyager Life #VOY CEO Nick Tulloch discusses today’s RNS & the latest developments with M3 Helium in Kansas with Alan Green
Voyager Life #VOY CEO Nick Tulloch discusses today’s RNS & the latest developments with M3 Helium in Kansas with Alan Green.
- Overview of the M3 VOY deal
- Fundraise & loan, is the money being well spent?
- Drilling latest from Carter 1 & 2, plus Fort Dodge Rost well & Scout Jayhawk plant
- High levels of #helium tested & vast expansion potential
- High levels of interest from US investors
Voyager Life #VOY – M3 Helium asset overview
Voyager is pleased to provide the following overview of M3 Helium Corp.’s, (“M3 Helium”) assets following a visit last week by CEO Nick Tulloch to Kansas, USA. The Company has an option to acquire M3 Helium, a producer of helium based in Kansas and with an interest in six wells.
Highlights
- Six wells in South-Western Kansas
- One well in production and tied into nearby gathering and processing infrastructure
- Two further wells in the process of being tied into the same infrastructure
- Two further wells in the Hugoton North Play fracked and undergoing assessment
- Sixth well in Fort Dodge tested at 5.1 per cent. helium content as announced on 15 July 2024
Hugoton North Play
M3 Helium has an interest in five wells in its Hugoton North Play project. These wells are situated around Garden City in western Kansas and are all within or near the gathering network connected to the Jayhawk gas processing plant near the town of Ullyses and which is owned and operated by Scout Energy Partners (“Scout”). Jayhawk produces methane, helium, nitrogen and natural gas liquids.
Carter 1 and Carter 2 wells
These are the most recent of M3 Helium’s wells to be drilled and are approximately one mile apart situated to the north of Garden City. M3 Helium owns a 100 per cent. interest in both of these wells although the Carter 1 well was funded by a third-party in return for the opportunity to acquire helium produced from that well at a price of US$280/Mcf.
The Carter 2 well completed a fracking operation last week and the team has now begun the process of well clean up, primarily swabbing for accumulated frack fluids, before an assessment can be made of the well’s potential flow rates. It is important to note that the geology of M3 Helium’s wells varies considerably. The Carter wells, which are situated at the north end of its operations are known to carry greater levels of water and, consequently, this particular fracking operation was executed at low pressure to ensure that the well, following fracking, was not compromised by fluid levels. Although it is early days, initial signs are positive – on completion of the operation, a vacuum was immediately observed in the wellbore indicating that the frack fluid was being absorbed into the rock below. As M3 Helium observes the well’s characteristics over the coming weeks, it expects to gain a greater understanding of the economics of developing this northern part of its operations.
Smith and Nilson wells
To the south of Garden City and in Haskell County near the town of Sublette are M3 Helium’s Smith and Nilson wells. M3 Helium owns a 100 per cent. interest in both of these wells. Both wells have been completed and have produced economic flow rates. M3 Helium has now commenced the process of tying them into the Scout pipeline network following which commercial production is expected to begin. To date, meters have been installed by Scout and M3 Helium is in the process of connecting a pipe between the well and meters. This is expected to be completed by end of August 2024 and a further announcement will be made at that time.
Smith and Nilson are to the east of the core part of the Hugoton gas field in what is known as the transition zone. It is M3 Helium’s belief that this lesser produced area could provide considerable upside to the company by accessing formations previously overlooked by other operators. The Smith well in particular was tested at pressure of 150 psi (pounds per square inch) in July 2024 and, following partial removal of water over the gas reservoir, M3 Helium believes this pressure is capable of rising.
Peyton well
Also to the south of Garden City but east of Smith and Nilson is the Peyton well. One of M3 Helium’s first wells, the Peyton well is in production and currently producing a return, net of all operating and administrative costs, of around $2,000 per month to the owners of the Peyton well. M3 Helium owns a 20 per cent. interest in the Peyton well. The well produces without the need for a pump.
The Peyton well is in the heart of the Hugoton gas field where wells have historically been reliable producers, with limited water content, but the area has seen more active production in the past and consequently M3 Helium’s management does not consider that potential reserves are as great as may be the case in the transition zone described above. However, the consistent production and expected well life makes this region an attractive area in which to operate.
Fort Dodge
M3 Helium’s Fort Dodge prospect is located a short drive to the east of Dodge City. Although a smaller prospect than the Hugoton North play project, Fort Dodge has test results showing high helium content and good well pressure.
Rost
The Rost well was tested earlier in July 2024 by Shamrock Gas Analysis, Inc. as containing 5.1% helium composition, announced on 15 July 2024. Thurmond-McGlothlin, LLC, an independent professional firm, also tested the pressure at 302.7 psi. Samples of gas were previously taken and measured at 47,100 cubic feet per day (47.1 Mcfd).
A combination of these factors make the Rost well and its Fort Dodge operation, in which M3 Helium owns a 100 per cent. interest, arguably its most exciting near term prospect. Although not within direct access to Scout’s gathering network, M3 Helium owns a mobile Pressure Swing Adsorption production plant which could be used to purify the helium on site. Discussions with Scout last week confirmed that Scout would accept M3 Helium’s purified helium which can be delivered to an access point around a one hour drive away.
Nick Tulloch, Chief Executive Officer of Voyager, said: “I was fortunate during my visit to Kansas to be able to tour Scout Energy Partners’ Jayhawk gas processing plant with whom M3 Helium partners with. The plant is vast, handling around 5 per cent. of world helium production according to the Scout Energy representative who showed us around, and the proximity of the gathering infrastructure to M3 Helium’s operations is a defining characteristic of the opportunity before us. Equally important is that the plant is still only operating below. capacity so further production will be welcomed.
“In a short time, M3 Helium has assembled a portfolio of assets in different locations, and with different geological characteristics, but all within reach of Scout’s infrastructure. As we develop our existing wells and add new ones, we can be secure in the knowledge that there is a ready and accessible market for our production.”
As announced on 27 June 2024, there is no certainty that the Company’s option to acquire M3 Helium will be exercised, nor that the enlarged group will successfully complete its re-admission to trading on the AQSE Growth Market.
The Directors of the Company are responsible for the release of this announcement.
ENDS
Enquiries:
| Voyager Life plc
Nick Tulloch, CEO |
Tel: +44 (0) 1738 317 693 |
| Cairn Financial Advisers LLP (AQSE Corporate Adviser)
Ludovico Lazzaretti/Liam Murray |
Tel: +44 (0) 20 7213 0880 |
| SI Capital Limited (Broker)
Nick Emerson/Nick Briers |
Tel: +44 (0) 1483 413500 |
| Stanford Capital Partners LLP (Broker)
Patrick Claridge/Bob Pountney |
Tel: +44 (0) 203 3650 3650/51
|
| Brand Communications (Public & Investor Relations)
Alan Green |
Tel: +44 (0) 7976 431608 |
Overview of M3 Helium and the Hugoton North Play
Voyager announced on 27 June 2024 that it has entered into an option agreement to acquire the entire issued share capital of M3 Helium through the issue of 57,611,552 new ordinary shares in Voyager to M3 Helium’s shareholders. The exercise of the option will constitute a reverse takeover pursuant to AQSE Rule 3.6 of the Access Rule Book and is subject to, inter alia, publication of an admission document.
M3 Helium’s North Play is part of the Hugoton gas field, one of the largest natural gas fields in North America. The North Play potentially extends to 250 sections with recoverable gas, with each section being approximately 640 acres (one square mile). Production to date has indicated a helium content of 1.25 per cent., a concentration that compares very favourably to other parts of the Hugoton gas field. Analogous wells drilled by other operators within the North Play have averaged over 0.44 bcfg per well, meaning that, with four wells per section, M3 Helium estimates a potential of up to 440+ bcfg of recoverable gas across the entire area. At a constant 1.25 per cent. helium content, M3 Helium estimates potential recoverable helium of over 5.5 bcf across the entire area.