The Helium One Global Ltd (LON: HE1) share price rallied 6.45% after revealing that it had signed a Letter of Intent (LoI) with SOFORI, a Tunisian Drilling Contractor, to provide the Drillmec HH102 oil and gas rig for the company’s drilling campaign at Rukwa in Tanzania.
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The helium exploration and development company signed the deal in partnership with Noble Helium (ASX: NHE). Helium One signed a cooperation agreement with Noble Helium in February to help it source and secure a suitable drilling rig and associated services and to arrange the logistics required for its drilling campaign.
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The partnership with Noble Helium has paid off following today’s update, as Helium One has finally secured a drilling rig for the second phase of its drilling campaign at Rukwa. The drilling campaign is crucial since it will allow Helium One to conclusively determine whether there is enough helium at Rukwa for commercial extraction.
Helium One’s first drilling campaign at Rukwa was unsuccessful. As a result, the company may have to ease operations if its second drilling campaign does not lead to the discovery of commercial-level helium deposits.
The company has adequate funds for its 2023 drilling campaign after raising £9.9 million ($12.3 million) in December 2022 and expects to commence drilling operations at Rukwa in Q3 2023. The firm also relinquished 1,548 km2 of non-prospective licensed areas across the Rukwa Basin, saving $309,600 annually.
Helium One is developing more potential helium resource targets after integrating the gravity-magnetic 3D inversion study over the Eyasi Rift Basin area.
Lorna Blaisse, Helium One’s CEO, commented: “We are pleased to have entered into this LoI with SOFORI and Noble Helium. This is an encouraging step towards our proposed spud date of Q3 and is both timely and cost-effective. While negotiations continue, with a view to signing a contract as soon as possible, SOFORI has informed us that the rig has no further conflicting commitments going forward. As a result of this, we have already placed orders for long lead items. We look forward to providing further updates as appropriate.”
*This is not investment advice.
Helium One share price.
The Helium One share price rallied 6.45% to trade at 6.60p, from Wednesday’s closing price of 6.20p.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.