Helium Evolution Inc. (HEVI CN): 3D Seismic acquisition completed. Drilling to start in 4Q26
• The 170 km² 3D seismic programme over the Mankota/Grasslands area (HEVI WI: 49%) has now been completed. Processing and interpretation are expected in early June and will enable the company to define and rank drilling locations.• At least three wells are planned for 4Q26, with new production to be tied into the existing Soda Lake facility in 1H27. At helium prices of US$450–750/mcf at the plant gate, HEVI estimates that the existing 12 mmcf/d raw‑gas facility would deliver approximately US$7–12 mm in annual pre‑tax operating cash flow net to the company, corresponding to an NPV of US$47–87 mm. This yearly cash‑flow represents ~24–42% of the current market capitalisation, while the NPV equates to 1.6–3.0× the current market cap.
• The drilling programme has the potential to be significantly larger, with up to 20 wells supported by the seismic and additional processing capacity required to monetise higher production volumes.
• Given tightening global helium supply, we have increased our price assumptions from US$375–450/mcf (2026–2029) to US$500/mcf. Our target price rises from C$0.50 per share to C$0.60 per share.
• At US$750/mcf realizations, our ReNAV increases to C$1.08 per share.
Further indications of pressure on helium supply
Following the closure of the Strait of Hormuz, Russia—representing roughly 10% of global helium supply—has imposed export restrictions to prioritise domestic demand and supply to key allies. The Saskatchewan Health Authority has already been warned of a 50% reduction in its helium deliveries. In response to tightening supply, a new liquefaction plant has been proposed near the North American Helium and HEVI land base. This is strategically significant, as access to liquefaction could increase HEVI’s realizations by ~US$100/mcf.
Valuation
Our low‑case scenario—partial success on two of four appraisal wells—supports a valuation of C$0.19–0.21 per share, with each successful well adding approximately C$0.04 per share. A full programme delivering ten successful wells would generate over US$25 mm per year of pre‑tax cash flow. Our updated ReNAV is C$0.58 per share. On an unrisked basis, HEVI’s position in the Mankota area alone is worth C$0.86 per share (assuming US$500/mcf realisations), with liquid‑helium sales offering a further uplift of C$0.14 per share. HEVI also holds multiple additional exploration assets, including Glenbain, for which our unrisked NAV is C$0.35 per share.
Auctus Advisors is a specialist Equity Capital Markets and Advisory business with a focus in the Energy Sector.
The partners have complementary skill sets, with decades of experience across Equity Capital Markets, Investment Banking and the Energy industry. We have worked at Société Générale, Canaccord Capital, BMO Capital Markets and Schlumberger. Most recently we have worked together for many years at GMP FirstEnergy.
Auctus has been set up at the beginning of a new decade in which we see significant opportunities in the Energy space. Globally, demand for energy is at record levels and continues to grow. Conversely, investment in traditional energy sources has been severely constrained. We believe this imbalance creates opportunities for both companies and investors.
Auctus provides Corporate Broking, Equity Research and Investment Banking services.
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