Pulsar Helium Inc. (TSX-V: PLSR): Better than expected results at Jetstream #1
• The Jetstream #1 well has been deepened by 2,900 feet to 5,100 feet. This is significantly more than the expected ~1,650 feet as the company encountered consistent and regular helium shows while drilling that continued beyond the original expected depth.• The mud log gas contained up to 7.2% helium. These samples were diluted by atmospheric air due to the rotary air drilling method used. The helium measurement therefore is likely to understate the real helium concentration. Unaffected samples for laboratory analysis will be acquired.
• The greater-than-expected thickness of the helium-rich formation could have a positive impact on the scale of the resource.
• The company will now drill the Jetstream #2 appraisal well ahead of further testing Jetstream #1.
• Ahead of further visibility on resource volumes, we re-iterate our target price of £0.80 per share. Our unrisked NAV for the contingent plus prospective helium is £1.74 per share plus £0.74 for the CO2 resources (Pmean in both cases).
Jetstream #2
The Jetstream #2 well will be drilled ~200-300 m away from Jetstream #1. The purpose of the well is to assess the continuity of the helium-rich formation and the quality of the reservoir. The well will also be drilled to a depth of >5,000 feet.
Valuation
Assuming a flow rate of 0.75 mmcf/d and helium concentration of 12.5%, Jetstream #1 could generate revenue of ~US$22 mm (@US$650/mcf for helium) during the first year of production (with no decline). This indicates very strong project economics given that a development well should cost
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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