Pulsar Helium Inc. (TSX-V: PLSR): High Helium concentration at high impact appraisal well
• The Jetstream #1 appraisal well at the Topaz helium project in Minnesota encountered helium shows while drilling, with helium concentration of up to 12.4% according to the on-site spectrometer.• The helium shows were encountered at depths of 1,750 – 2,200 feet (TD: 2,200 feet). The helium mudlog gas composition increased from 3.7% to 5.1% over the period. Due to the significant air volumes pumped into the well during the drilling process, these measurements are considered to be a minimum value due to dilution by atmospheric contamination.
• The well has been logged with results expected to provide further information on the reservoir. The company is particularly looking to understand the fracture network and water and gas inflows.
• Ahead of the well testing results, we have increased our chance of commercial success from 40% to 50%. We increase our target price from C$0.80 per share to C$1.20 per share. Our unrisked NAV for the 0.26 bcf of contingent resources of helium at Topaz is C$1.74 per share. The recently acquired passive seismic suggests a potentially much larger prize. 0.3-1.0 bcf of additional resources could add C$1.80-7.00 per share (unrisked).
Next steps
Fluid samples have been sent to lab for analysis. Results are expected in the next two weeks and should provide more information on helium concentration. The lab analysis is expected to be able to correct for the air contamination of the samples. Spring seasonal load restrictions on the roads in the area are expected to start imminently and will prevent the move of heavy equipment. Pulsar expects to be able to bring well testing equipment to the well site to start the well test programme during 2Q24.
Cashflow
We continue to assume US$15 mm development capex (helium sold in gaseous form) with first gas in 2025. We forecast net cash of ~US$35 mm by YE25 (=~45% of the current market cap) with a 5 mmcf/d gross gas development.
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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