Helix Exploration Shares See Modest Gains Amidst Helium Supply Concerns

Helix Exploration PLC (AIM: HEX, OTCQB: HEXFF) experienced a 2% increase in share price today, reflecting investor response to the company’s expanded leasehold in the Rudyard Helium Project and concurrent disruptions in the global helium supply chain.

However, the direction of the stock remains uncertain, given its recent choppiness. It has risen an impressive 112% over the past year.

The catalyst for today’s movement stems from two key developments: Helix’s acquisition of approximately 360 acres of additional State of Montana mineral leases and QatarEnergy’s declaration of force majeure on its liquid natural gas (LNG) supply contracts.

The acquired acreage consolidates Helix’s dominant position over the core of the Rudyard Anticline, a proven helium-bearing structure.

QatarEnergy’s force majeure, triggered by drone strikes on its Ras Laffan facilities, has effectively removed a significant portion of global helium production capacity from the market.

With Qatar accounting for roughly 30% of the world’s helium supply, this disruption has sent ripples through the industry, potentially leading to spot price increases of 35-50%, according to industry analysts.

Helix Exploration now controls nearly 8,000 acres, encompassing the most prospective portion of the Rudyard Anticline, where its three producing wells are located. This strategic positioning insulates Helix from the global supply shock, as its helium production is entirely domestic, from wellhead to delivery.

Leasehold Expansion Highlights

• Acquisition: 360 acres secured at State auction, strengthening Helix’s control over the Rudyard Anticline.
• Dominant Position: Approximately 7,927 acres now held, covering the heart of the helium-bearing structure.
• Growth: Over 2,300 acres added since the initial farmout, representing a 43% expansion.

The global helium market is vulnerable to disruptions at major production facilities, as helium is typically recovered as a by-product of natural gas processing. Qatar’s force majeure introduces contractual uncertainty at a critical time, potentially affecting supply arrangements across the distribution chain.

Helium is an essential input for various industries, including semiconductor fabrication, MRI systems, and aerospace. The lack of readily available substitutes underscores the importance of a stable supply. With the Qatari supply node offline and Russia’s Amur 2 facility facing sanctions and operational challenges, domestically sourced US helium gains strategic importance.

“Our leasehold covers the core of the Rudyard Anticline, the crest of the structure, the producing wells, and the proven reservoir,” commented Bo Sears, CEO of Helix Exploration. “With nearly 8,000 acres under our control, we have built a significant position over the central portion of the field.”

Sears added, “QatarEnergy’s force majeure makes one thing unmistakably clear: when LNG shuts down, helium shuts down with it. A significant portion of global production has been impacted, and the market has no timeline for when, or whether, it comes back.

“Helix produces helium entirely on US soil, from our own wells, which will be delivered to domestic customers. In a world where the largest supply node has just declared it cannot fulfil its contracts, that is not just an advantage – it is the advantage.”