Pulsar Helium Inc. (TSX-V: PLSR): Result of high impact well expected first week of March
• The drilling of the Jetstream #1 helium appraisal well at Topaz is taking longer than anticipated due to drilling fluid losses in a void section above the reservoir. This prevents fluid circulation and the recovery of drill cuttings to the surface.• The Company has made the decision to pivot from drilling with water, to drilling with air. An air package has been mobilized and will be connected to the contracted drill rig.
• As a result the well is expected to reach TD, be tested with a comprehensive suite of open-hole wireline logs and be completed by the first week of March.
• We reiterate our target price to C$0.80 per share. Our unrisked NAV for the 0.26 bcf of contingent resources of helium at Topaz is C$1.57 per share. The recently acquired passive seismic suggests a potentially much larger prize. 0.3-1.0 bcf of additional resources could add C$1.60-5.25 per share (unrisked).
What is air drilling?
Air drilling is an underbalanced drilling technique in which gases, usually compressed air or nitrogen, are used to cool the drill bit and lift the cuttings of a wellbore in place of conventionally used liquids. It has an over 60-year history of use in the industry. It is particularly effective in the context of dry formations when there are no risks of fluid influx from the well or well instability. These two characteristics (dry formation and stable well) apply to Jetstream #1.
Cashflow
We continue to assume US$15 mm development capex (helium sold in gaseous form) but are now expecting first gas in 2025 rather than 2H24. Even after the recent appreciation of the share price, we forecast net cash to represent >50% 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.
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.
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