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Helium One (HE1) Share Price Has Fallen 71.9% From Its July Highs. What’s Next?

Simon Mugo trader
Updated 19 Oct 2021

Helium One Global Ltd (LON: HE1) share price has fallen 71.9% from its July highs after failing to discover helium deposits during its maiden drilling programme at its Rukwa project in Tanzania.

Since late August, the shares have bottomed. They have been trading sideways, forming a balancing zone that could underpin the next rally if the company discovers helium during the second drilling phase.

Investors were disappointed after Helium One said that it had not discovered any free gas during the phase 1 drilling at its Tai-1A exploration well but had encountered helium shows at various levels.

Helium One later told investors that it had not found any helium deposit after drilling its Tai-2 well, which drove its shares lower as investors panicked on the slew of disappointing drill results.

The company is yet to issue another update after the disappointing results from the Tai-1 and Tai-2 wells reported in August. Hence, the sideways price action witnessed in its share price since then.

However, investors should remember that Helium One has licences covering an area of 3,500km2 and that the majority of the Rukwa license area is yet to be drilled or tested.

Identifying potential helium deposits during the drilling of the first two wells suggests that the company might finally discover commercial helium deposits in future drill programmes.

The current Helium One share price is quite attractive, but we could decline further if the company releases any more negative news. At this time, it is anyone’s guess as to what to expect next from the helium company.

Meanwhile, the company is well capitalised to continue funding its operations for the foreseeable future as it had £10 million in cash in August.

*This is not investment advice.

Helium One share price.

IG chart of Helium One share price 19-10-2021
Source: IG

Helium One shares have fallen 71.9% from their August highs of 28.75p to their current price of 8.08p. So, what’s next for the firm?

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Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading