HeLIX Exploration PLC (AIM:HEX) chairman David Minchin tells Proactive's Stephen Gunnion the results of a scoping study economic analysis for the Ingomar Dome helium project in Montana are very encouraging, showing a robust economic rate of return across various scenarios.
The study, conducted by Aeon Petroleum Consultants Corporation, revealed a headline NPV8 of $303.1 million and a net revenue of $605.6 million after taxes, royalties, capital expenditure, and operating costs.
Minchin highlighted that the initial capital expenditure required to bring the project into production is only $19.7 million. The strong economics are attributed to the low operating costs in Montana and the identification of up to 15% natural gas as a byproduct, which can be used to power the plant, reducing operating costs by approximately 50%.
Minchin emphasised the company’s focus on minimising shareholder dilution, noting that Helix Exploration is exploring various financing options to avoid large-scale dilution while maintaining a high cash flow.
With an estimated free cash flow of over $40 million per year, the company plans to rapidly repay initial capital requirements.
The next steps include drilling to appraise the gas and moving into detailed engineering and construction, aiming for first gas flow before the end of 2025.
Minchin mentioned ongoing conversations with potential financial partners to expedite the project's development cost-effectively.
