Analyst Stephane Foucaud of Auctus Advisors LLP wrote in a September 1 research note that Canadian exploration and development company Imperial Helium Corp. (IHC:TSX.V) has posted another encouraging result at the firm's second well drilled at its Steveville asset in Alberta.
Auctus Advisors indicated that drilling activity at the IHC-Steveville-2 well encountered a 133-meter thick reservoir section of the Beaverhill Lake Formation. The analyst stated further that "the depth and thickness of the gas saturated intervals calculated from logs are in-line with pre-drill estimates and are consistent with those identified in the IHC-Steveville-1 and the 13-22-020-12W4 wells (Steveville blowout)." The well reached a total depth of 1,959 meters and, as expected, was able to penetrate the crest of the structure.
Auctus commented that the positive results obtained from drilling at this second well provide a solid basis for its estimates of at least 1.1 billion cubic feet (bcf) of recoverable resources of helium.
Production testing is currently underway at the IHC-Steveville-1 well, and the company expects to announce that information shortly. It is hoped that the production data from IHC-Steveville-1 will boost confidence in the resource and confirm the field's deliverability and quality.
The company's exploration work at the IHC-Steveville-2 well was successfully drilled, cased, logged, and completed on schedule and within budget. The firm plans to commence production testing at IHC-Steveville-2 after it is finished with production testing at IHC-0Steveville-1, which is currently in process.
The analyst advised that once testing is completed at the IHC-Steveville-2 well, an independent third-party resources report is slated to be prepared for the entire Steveville property. Auctus stated that it expects that the report will be finished and published in Q4/21.
Auctus Advisors mentioned that Imperial Helium's shares continue to trade at a price that is well below its core net asset value (NAV) of CA$0.61 per share based upon a risked value of 1.1 bcf helium and very conservative performance forecasts of 5 million cubic feet per day (mmcf/d) from each of the two Steveville wells.
The analyst noted that if the production volumes were to increase to 10 mmcf/d per well, it would raise the NAV by CA$0.51 per share; and, similarly, at a level of 15 mmcf/d, it would increase core NAV further by an additional CA$0.41 per share.
Imperial Helium is based in Calgary, Alberta, Canada, and is focused on exploration and development of helium assets. While the company is now mostly prioritizing development of the Steveville Asset in Alberta, it continues to evaluate other opportunities throughout North America.
Auctus Advisors advised that it is reiterating its target price for Imperial Helium Corp. of CA$1.00 per share. The company's shares trade under the symbol IHC on the Toronto Stock Exchange and last closed for trading at CA$0.345/share on Tuesday, September 7, 2021.
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Disclosures for Auctus Advisors, Imperial Helium Corp., September 1, 2021
Imperial Helium Corp. (“Imperial” or the “Company”) is a corporate client of Auctus Advisors LLP (“Auctus”). Auctus receives, and has received in the past 12 months, compensation for providing corporate broking and/or investment banking services to the Company, including the publication and dissemination of marketing material from time to time.
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This document, being paid for by a corporate issuer, is believed by Auctus to be an ‘acceptable minor non-monetary benefit’ as set out in Article 12 (3) of the Commission Delegated Act C(2016) 2031 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. It is produced solely in support of our corporate broking and corporate finance business. Auctus does not offer a secondary execution service in the UK.
Author
The research analyst who prepared this research report was Stephane Foucaud, a partner of Auctus.
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