Helium One Global Ltd (AIM:HE1, OTCQB:HLOGF) is inching closer to achieving ‘commerciality’ as per an investment bank’s assessment, following the company’s latest well test results and a strategic acquisition that is expected to accelerate its journey towards generating revenue.
In a recent note, Panmure Liberum praised Helium One’s $6.75 million acquisition of a 50% working interest in the Galactica Pegasus Helium Project located in Colorado. The investment bank believes this project could commence production by mid-2025.
The acquisition provides Helium One with access to a near-term development opportunity that has the potential to generate maiden revenues in 2025. Moreover, this move diversifies the company’s portfolio beyond Tanzania, effectively de-risking its overall asset base and reducing its reliance on Tanzanian assets.
Panmure Liberum also described the production from the Itumbala-1 well in Tanzania as “very encouraging”. The well flowed at an average rate of 786 barrels per day from the Karoo interval, with a helium content of 5%.
Maintaining its ‘buy’ recommendation, the investment bank announced a rebase of its price target for Helium One from 5.30p to 3.44p. This adjustment accounts for the Colorado acquisition and the issuance of new shares in a £6.4 million fundraising initiative that supports the deal.
Despite the revised valuation, Panmure Liberum’s price target still represents more than double the current share price of 1.46p, which saw a 16% decline on the day of the announcement.
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