On recent testing, Imperial Helium Corp.'s (IHC:TSX.V; IMPHF:OTCQB) IHC-Steveville-3 well performed strongly, and this result boosts the expected overall flow rate from both of the company's wells, reported Auctus Advisors analyst Stephane Foucaud in a March 25 research note.
The new estimated flow rate is 10,000,000–15,000,000 cubic feet per day (10–15 MMcf/d), having increased from 10 MMcf/d. This range reflects flow specifically from IHC-Steveville-2's blowout zone and IHC-Steveville-3's blowout zone and subsalt zone.
"Were Imperial to add a third producing well to its portfolio, Auctus would increase the helium company's share price to about CA$0.85."
—Stephane Foucaud
Two factors could positively change this rate, Foucaud noted. One is a good flow test results from IHC-Steveville-2's subsalt zone. The other is stimulating this same well's blowout zone with acid "to reduce the skin factor."
The analyst relayed the recent test results from IHC-Steveville-3. During cleanup at sustained pressure, the well's blowout zone horizon flowed at a rate of 5–8 MMcf/d. This suggests this zone horizon could flow at this rate, without declining, for three years.
Also of note, Foucaud pointed out, the composition of the gas encountered at both IHC-Steveville-3 and IHC-Steveville-2's blowout zone horizons is similar, indicating the reservoir is communicating between both. Imperial is conducting an interference test to determine if this is in fact the case. If it is, this could "have important positive implications for the resources volume," Foucaud wrote.
Next for Imperial, Foucaud indicated, it will obtain the results of the in-progress interference test between its two wells and plans to pursue an independent resources report. Also, with respect to IHC-Steveville-2, the company intends to test its subsalt zone and acid stimulate its blowout zone horizon.
Auctus Advisors has a CA$0.80 per share target price on Imperial, the current share price of which is around CA$0.23. Were Imperial to add a third producing well to its portfolio, Foucaud wrote, Auctus would increase the helium company's share price to about CA$0.85.
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Disclosures for Auctus Advisors LLP, Imperial Helium Corp., March 25, 2022.
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.
MiFID II Disclosures: 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.
This note is a marketing communication and NOT independent research. As such, it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and this note is NOT subject to the prohibition on dealing ahead of the dissemination of investment research.
Author: The research analyst who prepared this research report was Stephane Foucaud, a partner of Auctus.
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Note prepared in good faith and in reliance on publicly available information: Comments made in this note have been arrived at in good faith and are based, at least in part, on current public information that Auctus considers reliable, but which it does not represent to be accurate or complete, and it should not be relied on as such. The information, opinions, forecasts and estimates contained in this document are current as of the date of this document and are subject to change without prior notification. No representation or warranty either actual or implied is made as to the accuracy, precision, completeness or correctness of the statements, opinions and judgements contained in this document.
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