Helium One (LON: HE1) said in a release Tuesday that it is reviewing several alternative rig options for its Phase 2 Tanzania drilling operations.
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Helium One shares plunged significantly following the news, currently down more than 22%.
The company has been forced to look at alternative rig options after the current operator of the drill rig in southern Africa amended their contract with Exalo to allow for an extension of their operations for up to twelve months.
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YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY
Through a non-binding Memorandum of Understanding announced in November, Helium One believed the Exalo rig was due to be mobilised to its Rukwa licence area in early 2023. However, it was “unexpectedly notified” on January 2 that contract terms between Exalo and the current operator had changed.
David Minchin, Chief Executive Officer of Helium One, said the current operator's decision to pay rig retention costs rather than release the unit is “both disappointing and frustrating.”
“However, based on recent rig searches, the company is aware of a number of alternative rigs for our Phase II exploration drilling. We are rapidly reviewing these options to inform the market with updated rig selection and timeline to drilling,” stated Minchin. “The company remains in a strong position based on a sound geological prognosis and with team, finances, and subsurface targets in place. We are committed to the delivery of a successful Phase II exploration drilling campaign as early in 2023 as possible.”
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.