Helium One signs Letter of Intent with Baker Hughes at Rukwa

Helium One Global Ltd (LON:HE1), the primary helium explorer, has provided an update on progress at its Rukwa (100%) project area in Tanzania including details of its planned Phase II drilling campaign.


·    Letter of intent (“LOI”) signed with Baker Hughes to provide integrated services to Rukwa Phase II drilling campaign;

·    Target spud date of January / February 2023 – subject to successful completion of rig audit and contract agreement;

·    Baker Hughes has provided a low-cost solution by mobilising equipment already active in Southern Africa;

·    Rig audit continues to demonstrate value by identifying and resolving engine component wear issues prior to mobilisation to Rukwa; and

·    Licence renewal process commenced including relinquishment of non-prospective licence area totalling 1,548 km2 saving $309,600 per annum

David Minchin, Chief Executive Officer, commented:

“The focus of our attention in August has been to advance the Phase II drilling campaign at our Rukwa Helium Project both efficiently and effectively, therefore we are delighted to be able to announce milestone partnerships and a target timeline to drilling commencing in January / February 2023.

“Our partnership with Baker Hughes, a world leader in the delivery of integrated well services, ensures we have the best equipment on site to evaluate our Phase II drilling at Rukwa.  Mobilising equipment currently in operation in Southern Africa allows us to deliver a cost-effective solution to overcoming the scarcity of downhole tools experienced globally.

“Delivery of our exploration programme commencing in January / February is dependent on concluding contract negotiations and completion of the rig audit conducted by ADC on our preferred rig in Kenya.  The audit is progressing well, and we are pleased that issues that are being identified are in the yard where they can be easily fixed, rather than out in the field where rig problems are exponentially more difficult to resolve.

“Continued shortages in the global helium market have seen record prices in contract and spot pricing at $400/Mcf and $1,000/Mcf respectively.  With demand from end users clearly demonstrating the requirement for a new source of high-grade primary helium, Helium One remains committed to delivering a successful Phase II drilling campaign at Tai, where robust closure at multiple stratigraphic levels and multiple subsurface helium shows identified in 2021 drilling gives us the best opportunity to make an economic discovery that unlocks the potential of the Rukwa helium province.”   

Drilling services

Helium One have signed a LOI with the tier one services company Baker Hughes to provide drilling fluid, cementing, wireline evaluation and downhole gas sampling services on the Company’s Phase II drilling campaign. Integrated services are essential to successful operation and data collection from the planned drilling campaign and, due to scarcity of suitable tools globally, have become the long-lead items in planning a timeline to drilling.

Baker Hughes have agreed with Helium One to offer equipment and tools that are presently being utilised by operators in Southern Africa.  These will be mobilised at the end of their current operations, giving a targeted commencement date of January / February 2023 for Helium One’s planned drilling campaign. Timeline to drilling commencing is contingent on contracting with Baker Hughes, the completion of operations and release of equipment from Southern Africa, as well as the successful completion of ADC audit, contracting, and export approval for the rig in Kenya.

Waiting for the equipment has several benefits for Helium One:

·    All the equipment for the three service lines can be mobilised from a single point, significantly reducing costs compared to gathering a set of tools from multiple locations around the world; 

·    Cost-to-Company is further reduced as Helium One can share demobilisation/mobilisation with the current operator, who contribute a portion of their demobilisation fee to the mobilisation of Baker Hughes equipment; and

·    The equipment will be “warm”, having been recently working, avoiding the many maintenance issues associating with equipment that has come from storage and avoiding downtime during operations.

With the scarcity of available tools and equipment globally, Helium One believes that the proposal from Baker Hughes benefits the Company by presenting a low-cost solution to the difficult problem of delivering a full suite of services to the Rukwa Basin.

Rig Audit

Helium One has re-commenced the ADC audit of the proposed drilling rig (“the Rig”) which remains ongoing.  During the process of running the audit ADC noticed irregularities in the operation of the Rig’s CAT C-27 diesel engine.  The engine was stripped and the issue traced to advanced wear on the engine’s twelve fuel injector nozzles.  Spare parts have been sourced and are in transit to Kenya. Once these parts have been installed, ADC will continue and complete the audit.

While it is disappointing that rig related issues have delayed completion of the ADC Audit, Helium One is pleased that these issues are being identified in the rig yard, where they can be easily fixed, rather than in the field in Rukwa, where a delay would be considerably longer and more expensive. In this way the ADC audit is doing exactly what it is designed to do – identifying and resolving issues that save the Company both time and money in the long run. 

Helium Market

Global demand for helium continues to grow exponentially while the Russian invasion of Ukraine has prevented any additional new supply being developed from the Amur facility in Siberia as Linde, Air Products and Air Liquide have officially suspended all activities in Russia.  With no end in sight for the current supply shortage, both spot and contract helium prices have continued to rise throughout the last six months.

Notable milestones from August include:

·    Contract pricing from Qatar into China exceeding $400/Mcf.  With no domestic helium sources and growing high-tech manufacturing industry, China is the world’s largest importer of helium consuming over a billion cubic feet of helium gas every year.  As Qatar provides the majority of Chinese helium supply, the rise of average import price to over $400/Mcf reported by Akap Energy is significant and highlights the upward pressure on long term bulk helium contract pricing seen by consumers around the world.

·    Spot pricing reported at over $1,000/Mcf. Argonon, who are attempting to create a transparent spot price for trading helium, announced in August the auction of one million cubic feet of helium gas from South Africa.   Despite the tender being ex-works without transport and the maiden load from a new plant, bids reached a range of $800-$875/Mcf.  Taking into account logistics costs and the distributor’s margin, this implies a delivered price into US or Asia of well over $1,000/Mcf.

Continued significant price rises in both contract and spot pricing highlight the tight global helium market and demonstrate the requirement for a new source of high-grade primary helium to satisfy global demand.

Licence Renewal

Helium One has submitted licence renewal applications over 14 of its 18 licences, which are due for second renewal during September and October 2022.  As part of the renewal process, Helium One conducted a review of all the Company’s licences held with a view to fully or partially relinquish licences that were not considered to be prospective for helium. 

The Helium One technical team selected the chosen areas for relinquishment based on the following criteria:

·    inaccessible offshore areas with no, or poorly, defined exploration leads;

·    onshore areas with no, or poorly, defined exploration leads; and

·    onshore areas on outcropping basement i.e. no sediment fill therefore deemed to be non-prospective

Retained areas were selected based on the following criteria:

·    existing prospective areas with 2D seismic data coverage;

·    offshore areas with well-defined leads i.e. defined by multiple seismic interpreters, and supported by gravity – magnetic data; and

·    onshore areas with well-defined leads and prospects in areas with known surface helium seeps

Prior to renewal, Helium One holds a prospecting licence footprint in the Rukwa Rift Basin totalling 3,448 km2. Following review two PLs were fully relinquished (PL10728/2015 and PL10711/2015), and a further six were partially relinquished (PL10727/2015, PL10712/2015, PL10710/2015, PL10725/2015, PL10709/2015 and PL10686/2015). The others remained unchanged. This combined relinquished area totals 1,548 km2 saving $309,600 per year in licence fees.

By relinquishing portions of our licenced acreage, Helium One can eliminate those areas deemed to be non-prospective and ensure future work programmes are focussed more effectively on the remaining, higher ranked acreage that is leased.

Click to view all articles for the EPIC:
Or click to view the full company profile:

More articles like this

Helium One Global Ltd

Helium One reports strong expansion to Tai Prospect

Tanzania-focussed helium explorer Helium One Global announced a new independent verification of prospective resources at its Tai Prospect on Monday. The AIM-traded firm said the evaluation, conducted by reserves auditors ERC Equipoise, resulted in significant increases in the

Helium One Global Ltd

Helium Super Summit 2023: Steering Through Uncertainty

30th Oct – 1st Nov 2023, The Westin Galleria Houston Four major global shortages in 18 years, and yet the greatest challenge facing the helium business in 2023/24 is the uncertainty that hangs over the market and its

Helium One Global Ltd

2023 Helium gas market will touch new level

Helium Gas market focuses on analyzing the current competitive situation in the Helium Gas market and provides basic information, market data, product introductions, etc. of leading companies in the industry. At the same time, includes the

Helium One Global Ltd

How is helium gas obtained?

Helium gas is a noble gas that has many uses, from manufacturing products to providing medical treatments. It is also non-toxic and does not react with other elements or compounds. Due to its unique properties, helium

Helium One Global Ltd

The importance of helium uses in everyday life

Helium is a gas that has numerous applications in everyday life. From its use in medical treatments to providing buoyancy for aircraft and balloons, this element plays an important role in many aspects of our day-to-day

Helium One Global Ltd

Helium One signs LOI for helium well in Tanzania

Helium One, the gas exploration company recently penned an agreement withTunisian contractor, SOFORI, to supply a Drillmec HH102 rig to be used in the next drilling campaign on the Rukwa Project in Tanzania. Although a contract has yet to

Helium One Global Ltd

Helium One enters into LoI with SOFORI and Noble Helium

Helium One Global Ltd (LON:HE1), the primary helium explorer in Tanzania, has announced that the Company has, alongside Noble Helium (ASX:NHE), entered into a Letter of Intent (LoI) with Tunisian Drilling Contractor, SOFORI, for the provision

Helium One Global Ltd

What is Helium?

Helium is a chemical element that occurs in great abundance throughout the universe, although it is not as widely distributed on Earth. It typically takes the form of a gas, and it heads up the list

Helium One Global Ltd

Helium One working tirelessly to secure rig at Rukwa

Helium One Global Ltd (LON:HE1), the primary helium explorer, has announced its unaudited condensed and consolidated results for the six months ended 31 December 2022, as well as provide an update on the Company’s progress on its

Helium One Global Ltd

Lift-off in hunt for hidden helium?

Durham researchers have helped to develop a new model that could be used to identify new helium gas resources – especially important in light of the global helium supply shortage. The study, published in Nature, was led by

Properties of Helium gas

Physical properties of helium gas: Helium (He) is a colorless, odorless, and tasteless gas at room temperature. It is the second lightest element and a noble gas, which means it is highly stable and relatively inert.

Helium: A byproduct of the natural gas industry

What is Helium? Helium is a chemical element and a colorless, odorless, tasteless, inert gas. It has the smallest atomic radius of any element and the second-lowest atomic weight. It is lighter than air. Most people

Helium One Global appoints new CEO

Helium One Global Ltd has appointed its principal geologist Lorna Blaisse as chief executive officer. She replaces David Minchin and, following completion of due diligence, will also be appointed as a director of the company. Ms Blaisse is an exploration

Helium One new CEO to give an updated presentation today

Helium One Global Ltd (LON:HE1), the primary helium explorer in Tanzania, has announced that at today’s AGM, Lorna Blaisse, the Company’s new Chief Executive Officer, will give an updated presentation to the meeting, a copy of