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Mendell Helium #MDH – Nilson well update & Extension of Option
Mendell Helium is pleased to provide an update on the rapidly growing production at the Nilson well in Kansas, USA owned by M3 Helium Corp. (“M3 Helium”) which is now ranked in the top 1% of producing wells (by volume) in the Hugoton gas field. The Company also announces that, further to the announcement on 1 October 2024, the Company and M3 Helium Corp. (“M3 Helium”) have agreed to extend the date by which the option the Company has to acquire M3 Helium (the “Option”), to 31 March 2025 and provides an update on the proposed acquisition of M3 Helium transaction.
As announced on 27 June 2024, the Company has an option to acquire M3 Helium, 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
- Nilson production has passed 100 Mcf/day at the start of the week and continues to rise by over 2 Mcf per day
- Based on Scout Energy Partners’ (“Scout Energy”) data, Nilson is in the top 1% of producing wells (by volume) in the Hugoton (Kansas)
- Performance of the well provides evidence of the viability of producing from the Towanda zone, thereby creating a new strategy in the Hugoton field.
- This performance further enhances the potential value of the farm in to Scout Energy’s acreage
Background
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$170,000 in aggregate to cover the costs for a 25% economic interest in the well. The frack injected 210,126 gallons of slickwater along with 128,500 pounds of sand. As far as M3 Helium’s management are aware, this was the Hugoton field’s first large water-based frack stimulation in several decades.
Typically, post-frack production results in an upward spike and then a subsequent decline in the well’s production. However, in Nilson’s case, production has been steadily rising each day. When the Company announced its initial findings on Nilson on 11 November 2024, it reported that the well’s production was increasing by a little under 1 Mcf per day. However, since then, production has been accelerating and, based on the past seven days, is now increasing by over 2 Mcf per day.
At current levels, Nilson is producing a little under 20 Mcf of helium each month (based on a helium composition of 0.6%).
This is illustrated in the graph below:
The Company expects Nilson’s production to continue to grow until water levels within the well reduce. At present, there is insufficient data to determine where the Nilson well might peak but the table below illustrates the well revenue capability between its existing production rate through to higher levels.
| Production(Mcf/day) | 100 | 150 | 200 | 250 | 300 |
| Daily revenue ($) | 285 | 428 | 570 | 713 | 855 |
| Monthly revenue ($) | 8,550 | 12,825 | 17,100 | 21,375 | 25,650 |
| Annual revenue ($) | 102,600 | 153,900 | 205,200 | 256,500 | 307,800 |
The above figures are based on a helium sale price of US$350 per Mcf and a NGL (natural gas liquids) sale price of US$0.75 per Mcf. Helium composition is assumed to be 0.6%.
As with all producing wells owned by M3 Helium (other than Rost), the Nilson well is connected to Scout Energy’s gathering system and, from there, to the Jayhawk processing plant. M3 Helium’s business model delivers gas production from the wellhead to the gathering system with no requirement to separate, refine or otherwise transport the production. Scout Energy accounts for the production to M3 Helium on a monthly basis.
The theory behind Nilson
M3 Helium’s strategy on the Nilson well was based on a “gas bubble theory” or transition zone theory that offers the potential of accessing what could be a substantially untapped gas reservoir below the water level that, to date traditional oil & gas explorers would treat with caution. The Hugoton gas field has been prolific with over 7,000 wells and over 18.5 trillion cubic feet of gas produced. However, conventional drilling focused on the interior of the field where water levels were low and gas production was consistent. As the field has been in production for over 90 years, flow rates in the interior are not as significant as they once were.
The Nilson well has gone some way to prove:
- The Hugoton gas field is not depleted – modern or unconventional techniques can produce significant results
- The lower Towanda reservoir is potentially a significant source of gas and helium
- Sizeable fracks in the tight rock in this part of the Hugoton gas field can yield impressive results
- Water production within the wells is manageable at present
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. With the success of this well, M3 Helium is now exploring the idea of a larger frack on future wells to stimulate even greater production.
The Towanda reservoir
The Hugoton field produces from five different formations (or members) which are collectively called the “Chase Group”. Each of the five members mostly consist of dolomite but there are also lithological and petrophysical elements. Each member progressively dips eastward into a transition zone where gas containing helium and water coexist. That is the target area for M3 Helium and, specifically, the fourth member called Towanda.
The Nilson well’s Towanda formation consists of a 40 foot thick section of dolomite which is likely cherty and tight with shale breaks. M3 Helium’s frack applied methods employed by the shale industry, as opposed to methods applied to conventional gas reservoirs.
M3 Helium believes that the Towanda formation, and each other member, will have its own transitional fairway where significant reserves could be untapped and management believes that the methods being employed will lead to a deeper understanding of the field.
Transaction update
Since the Option was granted, M3 Helium’s business has undergone some significant but very positive developments:
- It has signed a farm in agreement with Scout Energy over 161,280 acres of the Hugoton gas field, one of the largest natural gas fields in North America
- The Nilson well has proved a new strategy for production in the Hugoton gas field
- The Rost well at Fort Dodge, with a 5.1% helium content, has shown potential to be a far higher producer than originally envisaged
- M3 Helium has acquired two further producing wells (Bearman, Demmit) on the western side of the Hugoton gas field in Stanton County, Kansas
Due to the ongoing change to M3 Helium’s activities, the Company and M3 Helium have agreed to extend the date by which the Option can be exercised to 31 March 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“). Substantial progress has been made on preparing a competent person’s report for M3 Helium’s assets, including the new opportunities described above.
There are no other changes to the Option which will be exercised through the issue of 57,611,552 new ordinary shares in Mendell Helium to M3 Helium’s shareholders. At the current share price, this would value the enlarged group at approximately £3.5 million.
As announced on 6 November 2024, Nick Tulloch, CEO of Mendell Helium, was appointed as Chairman of the board of M3 Helium and the two companies are working closely together both to finalise the exercise of the Option and to continue the ongoing development of M3 Helium.
Nick Tulloch, Chief Executive Officer of Mendell Helium and Chairman of M3 Helium, said: “Hugoton has been one of the most prolific gas fields in the world, producing for over 90 years. Conventional wisdom is to stay in the centre of the field where production is dependable and water levels are low.
“M3 Helium has challenged – and changed – that conventional wisdom. The Nilson well, located on the eastern edge of the field and drilled into the lower Towanda reservoir has indicated not only that this reservoir is highly prospective for gas and helium but that a significant frack can stimulate production, even with higher water levels. The frack was 10 weeks ago but production at the well is still rising. Already Nilson is one of the best performing wells in terms of gas volume in the Hugoton and, at the moment, is continuing to increase in volume.
“The success of Nilson provides a blueprint for our strategy with respect to the agreed Scout Energy farm in over 161,280 acres in the Hugoton field. This acreage includes land within the transition zone and that is where we intend to focus our resources. Interest from local partners, including a preliminary indication of support from a Kansas bank, gives us confidence that there will be funding available for our operations.
“M3 Helium’s model demonstrates that economic volumes of helium can be produced within an hour’s drive of one of the world’s biggest helium processing plants and with full access to the local gathering system.”
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
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, Rost, 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 – Result of General Meeting and Completion of Disposal
The General Meeting of the Shareholders of Mendell Helium was held today at 11.30 am (UK) at Arran House, Arran Road, Perth, Perthshire PH1 3DZ. The Company is pleased to confirm that the resolution was duly passed.
This was the final condition for the disposal (“Disposal”) by the Company of its plant based health & wellness business (“Voyager”) to Orsus Therapeutics plc (“Orsus”) announced on 14 October 2024. The Company is therefore pleased to confirm that the Disposal has completed and the business and assets of Voyager have been transferred to Orsus.
Eric Boyle, Chairman of Mendell Helium, said: “We are pleased to confirm the completion of the sale of our plant based health & wellness business to Orsus. Over the past four years, we have developed several high profile and substantial customers in our manufacturing division alongside three brands with over 100 product formulations. We wish Orsus well in the next phase of building the Voyager business.”
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 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 ninth 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 – 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.
Alan Green covers Mendell Helium #MDH, Great Southern Copper #GSCU & Dan Flynn covers GreenRoc #GROC on this week’s Stockbox Research Talks
Alan Green covers Mendell Helium #MDH, Great Southern Copper #GSCU & Dan Flynn covers GreenRoc #GROC on this week’s Stockbox Research Talks
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 – Result of AGM
The Annual General Meeting of the Shareholders of Mendell Helium was held today at 10.00 am (UK) at Arran House, Arran Road, Perth, Perthshire PH1 3DZ. The Company is pleased to confirm that all resolutions were duly passed (other than resolution 3 which was withdrawn prior to the meeting).
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 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.
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 #MDH – Publication of Circular and Notice of General Meeting
Further to the announcement on 14 October 2024, Mendell Helium announces that a circular and notice of general meeting (“General Meeting”) have been posted to shareholders seeking shareholder approval for the disposal of the Voyager plant-based health and wellness business (the “Disposal”). The General Meeting will be held at 11.30 am on Monday 11 November 2024, at the Company’s offices at Arran House, Arran Road, Perth, Perthshire PH1 3DZ.
The Disposal will constitute a fundamental change of business of the Company under Rule 3.7 of the AQSE Exchange Rules and is therefore conditional on, inter alia, shareholder approval.
Following the Disposal, the Company will have disposed of all of its operating subsidiaries and will be deemed an Enterprise Company under the AQSE Exchange Rules. The Board’s intention is to exercise the Option to acquire the entire issued share capital of M3 Helium as set out in the announcement made by the Company on 27 June 2024. The exercise of the Option will constitute a reverse takeover under rule 3.6 of the AQSE Exchange Rules, therefore the Company will need to seek readmission of its ordinary to trading on the AQSE Growth Market.
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.
Accordingly, Shareholder approval for the Disposal is being sought at the General Meeting to be held at 11.30 a.m. on 11 November 2024. The notice convening the General Meeting and setting out the Resolution to be considered at it is set out at the end of the circular. A summary of the action shareholders should take is set out in paragraph 8 of the circular .
Full details of the Disposal is set out in the extract from the circular set out below.
Copies of the circular and notice of General Meeting are available on the Company’s website: https://www.voyagerlife.uk
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 |
To all Shareholders,
Disposal of Plant Based Health & Wellness Business and Notice of General Meeting
1. Introduction
On 14 October 2024, Mendell Helium announced the conditional disposal of its plant based health & wellness business to Orsus, a private label turnkey solutions provider specialising in developing, formulating, marketing & sales of health and wellness products for global brands. The consideration comprises shares and warrants in Orsus as set out below.
The Disposal will constitute a fundamental change of business of the Company under Rule 3.7 of the AQSE Exchange Rules and is therefore conditional on, inter alia, the passing of the Resolution at the General Meeting.
Following the Disposal, the Company will have disposed of all of its operating subsidiaries and will be deemed an Enterprise Company under the AQSE Exchange Rules. The Board’s intention is to exercise the Option to acquire the entire issued share capital of M3 Helium as set out in the announcement made by the Company on 27 June 2024. Exercise of the Option will constitute a reverse takeover under rule 3.6 of the AQSE Exchange Rules, therefore the Company will need to seek readmission of its ordinary to trading on the AQSE Growth Market.
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.
Accordingly, Shareholder approval for the Disposal is being sought at the General Meeting to be held at 11.30 a.m. on 11 November 2024. The notice convening the General Meeting and setting out the Resolution to be considered at it is set out at the end of this document. A summary of the action you should take is set out in paragraph 8 below.
Further details of the Disposal are set out below.
The purpose of this document is to give you details of the Disposal including the background to and reasons for it, to explain why the Directors consider it to be in the best interests of the Company and its Shareholders and stakeholders as a whole and recommend that you vote in favour of the Resolution to be proposed at the General Meeting.
2. Background to and reasons for the Disposal
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.
Pursuant to its proposed exercise of the Option, the Company is seeking to simplify its operations as it focuses on helium production. The Voyager business is currently loss-making and the effect of the Disposal will be that the Company can apply all of its cash resources on its new operations, subject to the exercise of the Option.
3. Information on Voyager
Voyager’s plant-based health and wellness operations comprise:
· Manufacturing facility in Perth, Scotland producing both products for own brand and third party customers (VoyagerCann)
· E-commerce and wholesale operations based in Perth, Scotland
· Three brands: Voyager, Ascend Skincare and Amphora
· Three retail stores in Scotland (St Andrews, Dundee and Edinburgh)
On 4 June 2024, Voyager announced that it had been successful in pitching for and winning a substantial new customer for VoyagerCann. The preliminary order for six product lines with an expected order value of over £30,000 has since been increased by plans to manufacture additional products for that customer, which is a leader in its field with retail stores across the UK and a strong online presence.
Since then, the Company has also received a series of orders worth over £38,000 for further products for one of its existing customers. That customer has since advised that certain of its products are expected to be stocked in well-known high street stores and, consequently, VoyagerCann’s order book is now stronger than at any time previously.
Within the Company’s own brand, Voyager, the most prominent customer is Pets at Home with four products available on Pets at Home’s website since November 2023. Furthermore, its Amazon profile has recently improved with a greater range of products now available for sale through its Prime channel.
In conjunction with Orsus, the Company is continuing to reinvigorate its e-commerce strategy with a plan for Voyager’s primary website to be re-written in Shopify and accompanied by a revised SEO (search engine optimisation), social media and digital marketing strategy. Shopify would provide more functionality and can also be integrated into the Company’s stores and used at external events (such as trade fairs).
With the low-cost acquisition of Amphora Health Limited earlier in the year, Voyager has 23 products validated on the FSA’s novel foods list, which the Board considers will be a key part of its e-commerce strategy. The acquisition also enabled entry into the potentially lucrative non-disposable vape market.
In the financial year ended 31 March 2024, the Company reported revenue of £304,000 with a gross margin of over 41%. Total assets were £929,000 and net assets £140,000. These figures are all substantially attributable to Voyager.
4. Principal terms of the Disposal
As announced on 14 October 2024, Mendell Helium entered into a share purchase agreement (“Share Purchase Agreement”) to dispose of Voyager’s plant based health and wellness business to Orsus. The Disposal is being effected by Orsus acquiring the Company’s wholly owned subsidiaries, being VoyagerCann Limited, Amphora Health Limited and Voyager Life Limited (the “Subsidiaries”), which, combined, own all of its health & wellness operations. The consideration for the Disposal is:
a. The issue of 9,000,000 new ordinary shares in Orsus (“Shares”) at a price of 5 pence per share to the Company, representing approximately 28% of the enlarged Orsus group
b. The issue of 6,000,000 new Orsus warrants (“Warrants”) to the Company, representing approximately 16% of the enlarged Orsus group’s existing share capital on a fully diluted basis
The Warrants will convert into new Orsus ordinary shares subject to the Voyager business contributing not less than £300,000 of revenues to the enlarged Orsus group and existing customers accounting for not less than £100,000 of such revenues in the first 12 months.
As the Disposal will result in a fundamental change in the Company’s business pursuant to Rule 3.7 of the AQSE Exchange Rules, it is therefore conditional on, inter alia, the passing of the Resolution at the General Meeting.
Pending shareholder approval, the Company and Orsus have agreed that 1 October 2024 is the effective date meaning that Orsus has assumed management control, and full profit & loss responsibility for Voyager from that date and Mendell Helium has no further obligation to contribute to the running costs of the Voyager plant based health & wellness business.
Prior to completion of the Disposal, Mendell Helium will transfer all of Voyager’s business into the Subsidiaries. This includes the operations of the Company’s retail shops in Dundee, St Andrews and Edinburgh. Agreements have been reached to sublet the shops in St Andrews and Edinburgh. Owing to rising rents since the Company commenced trading from these premises, Mendell Helium expects to make a small profit from the subletting (after taking account of legal fees and agents’ commissions in the first year). The Dundee shop will be the responsibility of Orsus.
It is Mendell Helium’s intention to transfer the Shares and Warrants to the Company’s shareholders on a pro rata basis. This will allow Mendell Helium to focus on its proposed new business of helium production in Kansas whilst also giving shareholders a direct and continuing stake in Voyager’s operations. Further details will be announced in due course.
The Share Purchase Agreement contains warranties given by the Company relating to the Company’s power and authority to enter into and perform its obligations under the transaction contemplated by the Share Purchase Agreement.
In addition, a number of business warranties are given by the Company to Orsus (for example in respect of employment, assets, trading, litigation and intellectual property). Orsus’ recourse against the Company for breach of warranties, indemnifications and otherwise under the Share Purchase Agreement is limited to certain agreed liability caps, with an overall maximum liability capped at £450,000 (being the value of the Shares).
The shares in the Subsidiaries will be transferred free of all encumbrances.
The Share Purchase Agreement is governed by the laws of England and Wales.
5. Information on Orsus
Orsus Therapeutics was established in 2021 as a special purpose acquisition vehicle to become an end-to-end provider of health and wellness solutions and products via a buy and build strategy. Through the acquisition of Voyager, it is seeking to become a leading private label turnkey solutions provider specialising in developing, formulating, marketing & sales of health and wellness products for global brands. Using Voyager’s facilities as its base in Perth, Scotland, Orsus has ambitious plans to build a leading health and wellness solutions business, offering a full creation and production vendor service to brands globally.
Aditya (“Harry”) Chathli, a founder Director of Orsus, is Non-Executive Chairman of Chill Brands Group PLC, a company which Nick Tulloch, CEO of Mendell Helium, is a Non-Executive Director.
Audited financial information on Orsus for the year ended 30 June 2023
|
Profit before taxation |
£(76,238) |
|
Total assets |
£339,646 |
|
Net assets |
£325,967 |
|
Cash |
£335,146 |
6. The effect of the Disposal on the Company
Following the Disposal, the Company will have disposed of all of its operating activities and will be an Enterprise Company under the AQSE Exchange Rules. The Board’s intention is to exercise the Option to acquire the entire issued share capital of M3 Helium as set out in the announcement made by the Company 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 Disposal will result in the Company significantly reducing its working capital requirements.
7. General Meeting
A notice convening the General Meeting to be held at the Arran House, Arran Road, Perth, Perthshire PH1 3DZ at 11.30 a.m. on 11 November 2024 is set out at the end of this document. At the General Meeting, the Resolution will be proposed as an ordinary resolution, which means that to be passed, more than half the votes cast must be cast in favour of the resolution.
This Resolution is to approve the Disposal and to authorise the Directors to take all steps necessary or desirable to complete the Disposal. In order for the Resolution to be passed, a simple majority (being more than 50 per cent.) of votes cast (in person or by proxy) must be in favour of the Resolution.
8. Action to be taken
The Notice of General Meeting is set out on page 12 of this Circular and this letter explains the items to be transacted at the General Meeting.
A Form of Proxy for use at the General Meeting is enclosed. If you wish to validly appoint a proxy, the Form of Proxy should be completed and signed in accordance with the instructions printed thereon, and returned by post so as to be received by Share Registrars not later than 11.30 a.m. on 7 November 2024.
9. Recommendation
The Directors consider the Disposal to be in the best interests of the Company and the Shareholders as a whole and, accordingly, unanimously recommend that Shareholders vote in favour of the Resolution as they intend to do so in respect of their own beneficial holdings amounting, in aggregate, to 5,575,916 Ordinary Shares, representing approximately 12.7 per cent. of the Existing Share Capital.
Yours faithfully,
Eric Boyle
Chairman
|
2024 |
|
|
Publication and despatch of this document
|
25 October |
|
Latest time and date for receipt of Forms of Proxy
|
11.30 a.m. on 7 November |
|
General Meeting
|
11.30 a.m. on 11 November |
|
Result of General Meeting announced via RIS
|
11 November |
Notes:
(1) All of the above timings refer to London time unless otherwise stated.
(2) The dates and timing of the events in the above timetable and in the rest of this Document are indicative only and may be subject to change.
(3) If any of the above times or dates should change, the revised times and/or dates will be notified by an announcement through an RIS.
The following definitions shall apply throughout this document unless the context requires otherwise:
Definitions
The following definitions shall apply throughout this document unless the context requires otherwise:
|
“Act” |
the Companies Act 2006, as amended from time to time |
|
“AQSE” |
Aquis Stock Exchange Limited, a UK-based stock market providing primary and secondary markets for equity and debt products and which is permissioned as a Recognised Investment Exchange |
|
“AQSE Exchange Rules” |
the AQSE Growth Market Access Rulebook, which set out the admission requirements and continuing obligations of companies seeking admission to, and whose shares are admitted to trading on, the Access segment of the AQSE Growth Market |
|
“AQSE Growth Market” |
the Access Segment of the AQSE Exchange Growth Market operated by AQSE |
|
“Board” |
the board of Directors of the Company |
|
“CBD” |
cannabidiol, a phytocannabidiol found in the cannabis plant |
|
“Certificated” or “in certificated form” |
a share or other security which is not in uncertificated form (that is, not in CREST) |
|
“Circular” or “Document” |
this document dated 25 October 2024 |
|
“Company” or “Mendell Helium” |
Mendell Helium plc, a company incorporated in Scotland with registered number SC680788 |
|
“CREST” |
the relevant system (as defined in the CREST Regulations) for paperless settlement of share transfers and the holding of shares in uncertificated form which is administered by Euroclear UK & Ireland Limited |
|
“CREST Regulations” |
the Uncertificated Securities Regulations 2001 (SI 2001/3755) as amended |
|
“Directors” or “Board” |
Eric James Boyle, Nicholas (“Nick”) George Selby Tulloch and Jillian (“Jill”) Maree Overland as at the date of this document (but Jill Overland is stepping down from the Board on 6 November 2024) |
|
“Disposal” |
the proposed sale of the Company’s plant based health & wellness business to Orsus |
|
“Existing Share Capital” |
the 43,885,494 Ordinary Shares in issue at the date of this document, all of which are admitted to trading on the AQSE Growth Market; |
|
“FCA” |
the UK Financial Conduct Authority |
|
“Form of Proxy” |
the form of proxy accompanying this Document for use at the General Meeting |
|
“General Meeting” |
the general meeting of the Company to be held at 11.30 a.m. 11 November 2024 atArran House, Arran Road, Perth, Perthshire PH1 3DZ, notice of which is set out on page 12 of this Document |
|
“ISIN” |
the International Securities Identification Number |
|
“M3 Helium” |
M3 Helium Corp., a company incorporated and registered in the state of Delaware, U.S.A. with registration number 7514135 whose registered office is at 4601 E Douglas Ave, STE 150, Wichita, Kansas 67218, United States |
|
“Notice of General Meeting” |
the notice of General Meeting set out on page 12 of this Document |
|
“Option” |
the exclusive option agreement to acquire the entire issued and to be issued share capital of M3 Helium by issuing 57,611,552 new Ordinary Shares to M3 Helium’s shareholders |
|
“Ordinary Shares” |
ordinary shares of £0.01 each in the capital of the Company |
|
“Orsus” |
Orsus Therapeutics plc, a company incorporated and registered in England and Wales with registered number 13374907 |
|
“Recognised Investment Exchange” |
an investment exchange recognised by the FCA under the Financial Services and Markets Act 2000 |
|
“Registrar” |
Share Registrars Limited, the Company’s registrar |
|
“Regulatory Information Service” or “RIS” |
any channel recognised as a channel for the dissemination of information as defined in the glossary of terms in the AQSE Exchange Rules |
|
“Resolution” |
the resolution to be proposed at the General Meeting and as described on page 12 of this Document |
|
“SEDOL” |
the Stock Exchange Daily Official List Identification Number |
|
“Shareholders” |
the holders of Ordinary Shares from time to time |
|
“UK” or “United Kingdom” |
the United Kingdom of Great Britain and Northern Ireland |
|
“uncertificated” or “in uncertificated form” |
securities recorded on a register of securities maintained by Euroclear UK & Ireland Limited in accordance with the CREST Regulations as being in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST |
|
“Voyager” |
the operating subsidiaries of the Company, being VoyagerCann Limited, Amphora Health Limited and Voyager Life Limited which form the Company’s plant based health & wellness business |
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.
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.
#MDH Mendell Helium – DIRECTORATE CHANGE
Mendell Helium announces that Jill Overland, a non-executive director of the Company, will be stepping down from the Board at the Company’s forthcoming annual general meeting on 6 November 2024 (“AGM”).
Mrs Overland works as a finance director of another company. In recent months, that role has become more time consuming to the extent that she feels she cannot commit sufficient time to Mendell Helium. As a consequence, she has notified the Board of her resignation and her intention to leave on that date.
Mendell Helium intends to assess the composition of its board, including making new appointments, at the time of its proposed acquisition of M3 Helium Corp.
Resolution 3 in the notice of AGM, which was to approve Mrs Overland’s re-election to the board, will be withdrawn at the AGM.
Eric Boyle, Chairman of Mendell Helium, said: “Jill has been a member of our board for over three years, including throughout our time as an AQSE quoted company. Her knowledge and enthusiasm for our operations has been invaluable as our business has developed. On behalf of the Board and all of the Mendell Helium team, I thank her for all that she has done for us and we wish her well in the future.”
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.
The Directors of the Company are responsible for the release of this announcement.
ENDs – Enquiries:
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Mendell Helium plc
Nick Tulloch, CEO
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Tel: +44 (0) 1738 317 693
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Cairn Financial Advisers LLP (AQSE Corporate Adviser) Ludovico Lazzaretti/Liam Murray |
Tel: +44 (0) 20 7213 0880 |
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SI Capital Limited (Broker) Nick Emerson |
Tel: +44 (0) 1483 413500 |
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Stanford Capital Partners Ltd (Broker) Patrick Claridge/Bob Pountney |
Tel: +44 (0) 203 3650 3650/51
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Brand Communications (Public & Investor Relations) Alan Green |
Tel: +44 (0) 7976 431608 |
Mendell Helium #MDH – Disposal of plant based health & wellness business
Mendell Helium is pleased to announce the conditional disposal (“Disposal”) of its plant based health & wellness business (“Voyager”) to Orsus Therapeutics plc (“Orsus”), a private label turnkey solutions provider specialising in developing, formulating, marketing & sales of health and wellness products for global brands.
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
- Mendell Helium will own approximately 28% of Orsus with further upside based on the achievement of revenue targets
- The Board will explore arrangements to distribute the Orsus shares on a pro rata basis directly to the Company’s shareholders
- Mendell Helium has no further obligation to contribute to the running costs of the plant based health & wellness business with effect from 1 October 2024
- Disposal will be conditional on shareholder approval at a forthcoming general meeting
Transaction summary
Further to the announcement of 30 September 2024 in which the Company stated that it had entered into heads of terms to dispose of its plant based health & wellness business, Mendell Helium is now pleased to confirm that a share purchase agreement has been signed to dispose of Voyager’s plant based health and wellness business to Orsus. The Disposal is being effected by Orsus acquiring three of the Company’s wholly owned subsidiaries, being VoyagerCann Limited, Amphora Health Limited and Voyager Life Limited, which, combined, own all of its health & wellness operations. The consideration for the Disposal is:
- The issue of 9,000,000 new ordinary shares in Orsus (“Shares”) at a price of 5 pence per share to the Company, representing approximately 28% of the enlarged Orsus group
- The issue of of 6,000,000 new Orsus warrants (“Warrants”) to the Company, representing approximately 16% of the enlarged Orsus group’s existing share capital on a fully diluted basis
The Warrants will convert into Shares subject to Voyager’s business contributing not less than £300,000 of revenues to the enlarged Orsus group and existing customers accounting for not less than £100,000 of such revenues in the first 12 months.
As the Disposal will result in a fundamental change in the Company’s business pursuant to rule 3.7 of the AQSE Growth Market Access rulebook, it is conditional on shareholder approval which will be sought at the time of the publication of the admission document in connection with Mendell Helium’s proposed acquisition of M3 Helium Corp. which is anticipated later in Q4 2024.
Pending shareholder approval, the Company and Orsus have agreed that the effective date of the Disposal is 1 October 2024 meaning that Orsus will assume management control, and full profit & loss responsibility for Voyager from that date and Mendell Helium has no further obligation to contribute to the running costs of the Voyager plant based health & wellness business.
It is Mendell Helium’s intention to transfer the Shares and Warrants to the Company’s shareholders on a pro rata basis. This will allow Mendell Helium to focus on its proposed new business of helium production in Kansas whilst also giving shareholders a direct and continuing stake in Voyager’s operations. Further details will be announced in due course.
About Voyager
Voyager’s plant-based health and wellness operations comprise:
- Manufacturing facility in Perth, Scotland producing both products for own brand and third party customers (VoyagerCann)
- E-commerce and wholesale operations based in Perth, Scotland
- Three brands: Voyager, Ascend Skincare and Amphora
- Three retail stores in Scotland (St Andrews, Dundee and Edinburgh)
Although the Directors concluded earlier this year that the scale of these operations is not large enough in the short term to justify being a standalone public company, there have been considerable successes in the business. On 4 June 2024, Voyager announced that it had been successful in pitching for and winning a substantial new customer for VoyagerCann. The preliminary order for six product lines with an expected order value of over £30,000 has since been increased by plans to manufacture additional products for that customer, which is a leader in its field with retail stores across the UK and a strong online presence.
Since then, the Company has also received a series of orders worth over £38,000 for further products for one of its existing customers. That customer has since advised that certain of its products are expected to be stocked in well-known high street stores and, consequently, VoyagerCann’s order book is now stronger than at any time previously.
Within the Company’s own brand, Voyager, the most prominent customer is Pets at Home with four products available on Pets at Home’s website since November 2023. Furthermore, its Amazon profile has recently improved with a greater range of products now available for sale through its Prime channel.
In conjunction with Orsus, the Company is continuing to reinvigorate its e-commerce strategy with a plan for Voyager’s primary website to be re-written in Shopify and accompanied by a revised SEO, social media and digital marketing strategy. Shopify would provide more functionality and can also be integrated into the Company’s stores and used at external events (such as trade fairs).
With the low-cost acquisition of Amphora Health Limited earlier in the year, Voyager now has 23 products validated on the FSA’s novel foods list, which the Board considers will be a key part of its e-commerce strategy. Just as significantly, the acquisition has enabled entry into the potentially lucrative non-disposable vape market.
In the financial year ended 31 March 2024, the Company reported revenue of £304,000 with a gross margin of over 41%. Total assets were £929,000 and net assets £140,000. These figures are all substantially attributable to Voyager.
About Orsus
Orsus Therapeutics was established in 2021 as a special purpose acquisition vehicle to become an end-to-end provider of health and wellness solutions and products via a buy and build strategy. Through the acquisiton of Voyager, it is set to become a leading private label turnkey solutions provider specialising in developing, formulating, marketing & sales of health and wellness products for global brands. Using Voyager’s facilities as its base in Perth, Scotland, Orsus has ambitious plans to build a leading health and wellness solutions business, offering a full creation and production vendor service to brands globally.
Nick Tulloch, Chief Executive Officer of Mendell Helium, said: “We are delighted to announce the conditional disposal of our plant based health & wellness business with Orsus. Voyager is four years old and, in that time, has established three brands within the UK’s CBD market and, most importantly through VoyagerCann, a reputation for high quality manufacture of white label and third party products. We have several high profile and substantial customers which we believe will grow their product range over the coming months and years.
“A key attraction of the combination with Orsus is that we are working with people we know and who have particular expertise in the health & wellness market. Orsus has already put in place plans to invest in and expand the business and, through the terms of the Disposal, our shareholders stand to benefit from the enlarged operations. In time we aim to transfer the shares and warrants we receive in Orsus to our shareholders thereby giving them interests in both our potential new helium operations as well as our enlarged health & wellness business.”
Dr Adi Zuloff-Shani, Chair of Orsus Therapeutics, said: “The acquisition of Mendell Helium’s plant-based health and wellness business not only enhances Orsus’ portfolio but also positions us to establish a world-class facility in Perth, Scotland as our base to serve brands globally. By merging the Voyager team with ours , we will leverage our joint expertise and comprehensive understanding of market trends to provide turnkey solutions for global health and wellness brands across various categories. Through meticulous design, expert formulation, rapid manufacturing and stringent quality control, our commitment to excellence and innovation remains steadfast as well as todelivering exceptional products for our clients.”
Aditya (“Harry”) Chathli, a founder Director of Orsus, is Non-Executive Chairman of Chill Brands Group PLC, a company which Nick Tulloch is a Non-Executive Director.
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 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.