Helix Exploration Shares Dip Despite Montana Helium Production Milestone

Helix Exploration (LON: HEX), a helium exploration and development company, announced the commencement of gas production at its flagship Rudyard Project in Montana.

This achievement marks Helix as the first helium gas producer in the state. Despite this significant milestone, shares opened higher before reversing course, currently trading down approximately 2.8%.

The company highlighted that helium gas is initially being processed from three production wells: Linda, Weil, and Darwin. The Inez well will be integrated into production capacity upon completion of testing.

Helix is now engaging in offtake negotiations, welcoming potential distributors to the Rudyard site. Capacity is expected to scale towards full production in the coming months as the company consolidates processes around its PSA plant.

The market's muted response suggests investors are weighing the production news against other factors, potentially including the timeline for full production capacity and the specifics of upcoming offtake agreements. The successful transition from explorer to producer is a major step, but the immediate financial impact hinges on securing favorable offtake terms.

Bo Sears, Chief Executive Officer of Helix Exploration, stated, “Helix is elated that it can claim to be the first Helium producer in the state of Montana… The commencement of production marks a transitionary event for the Company as we move from an explorer to a revenue-producing business.”

The company's offtake strategy will focus on securing a mix of short- and long-term contracts to maximize price and revenue. Meetings with potential offtake partners are scheduled in the coming weeks.

Regarding the Inez well, Helix reported a “snapping off” incident during re-entry, requiring retrieval of drill string components. The company clarified that this does not compromise the hydrogen potential or helium reserves in the well. Testing activities at Inez will be revisited after offtake agreements are secured, with ongoing discussions regarding the hydrogen potential of the Rudyard Field.

The commencement of production at the Rudyard Project validates the company's strategy and its ability to execute, as highlighted by Keith Spickelmier, Non-Executive Chairman of Helix Exploration.