The Helium One Global Ltd (LON: HE1) share price spiked 23.4% higher after announcing that it had changed the drill rig supplier for the phase two drilling at its Rukwa helium project in Tanzania. The revealed that it had chosen Exalo drilling as its new drill rig supplier, dropping the previous Predator drill rig.
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The primary helium explorer cited significant legal issues that would have delayed the delivery of the previous rig. In addition, the company had already completed an in-depth independent rig audit to determine the suitability of the Predator rig for the phase 2 drilling at Rukwa.
Luckily for Helium One, the new drilling rig from Exalo is currently engaged in a drilling campaign that reaches depths much deeper than the projected drilling campaign at rukwa. Therefore, the company does not have to conduct an independent rig audit, which saves time and money.
The Exalo drill rig is currently winding up a drilling campaign in Southern Africa and will be quickly transported to Tanzania once the project is completed. The drill rig can be easily broken down into 28-tonne loads and transported relatively quickly.
Helium One had to abandon the Predator 200 drill rig after an unrelated third-party initiated a claim against the rig owner shortly after the rig had started the export approval process from Kenya to Tanzania following the completion of an independent rig audit.
Investors cheered the news after the helium company said that the Exalo rig was its first choice but had to be foregone because other companies had contracted it. Therefore, the company is awaiting the delivery of the Exalo rig so that phase 2 drilling operations can commence.
Phase 2 drilling will focus on the Tai prospect, where a robust structural closure at the Karoo level was identified via 2D seismic mapping. The newly identified closure was not tested previously and is located in the Lake Beds.
The company hopes to discover commercial helium reserves after the phase I drilling campaign failed to uncover such deposits.
Helium One shares are trading down 5% for the year but have given up most of their earlier gains, given that they traded above 15p in January.
*This is not investment advice.
The Helium One share price.
The Helium One share price soared 23.35% to trade at 7.29p, rising from Monday’s closing price of 5.91p.