Pulsar Helium Inc. (TSX-V: PLSR): About to start drilling high impact well
• Pulsar has signed a rig contract with Capstar drilling to drill a high impact appraisal well at Topaz. The well will twin an existing well than encountered and flowed helium at high rate (10.5% helium concentration).• The program is for one well, with the option to drill a second well at the company’s option.
• Drilling is expected to start around 10th December. The collar location of the first well (Jetstream #1) is anticipated to be ~20 m from the original well.
• A gas chromatograph and gas spectrometer will be on location to provide real time measurement of helium concentration. The well will be logged on reaching TD.
• A well test with 2 mmcf/d IP rate (0.2 mmcf/d of helium) would unlock C$0.50 per share and eliminate the development and commercial risk. Such a flow rate is likely to trigger a conversion of some of the 3C Contingent Resources into the 2P Reserves Category.
• At 5 mmcf/d (0.5 mmcf/d of helium), ~C$1.60 per share would be unlocked (assuming this triggers the entire conversion of the 3C Contingent Resources into the 2P Reserves category); while 10 mmcf/d (1 mmcf/d of helium) has an unrisked NAV of ~C$3.40 per share (on a similar decline rate as for our 5 mmcf/d IP rate case, this would suggest 0.6 bcf recoverable resources).
• We re-iterate our target price of C$0.90 per share.
Cashflow
Assuming US$15 mm development capex (helium sold in gaseous form) and first gas in July 2024, net cash is forecast to be 2x the current market cap by YE25.
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.
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