Helix Exploration

In need of a name change.

Good Morning Team.

Good news.

Helix Exploration is now Helix Production.

Just kidding, but honestly a name change is now very much in order.

As I type, we’re up around 5% in the early 40s - but we were closer to 50p a month ago and the key risk event has now evaporated.

In a sane world, we would be at record highs this morning. However, attributing logic to what some perceive to be an efficient market is a rookie small cap error, and you should all know better.

Before we continue, you might wish to relisten (or for the slackers among you, listen for the first time) to my February interview with CEO Bo Sears where with the benefit of hindsight you may be able to glean some strategic insights you may have missed the first time around.

Right, let’s dive in.

First up, HEX launched the IPO at 10p per share and we’re standing above 40p. That’s a >4x return in <2 years, and a success in anyone’s book.

If I had another IPO with that return on the cards, I don’t think there’s anyone here who wouldn’t snap my hand for it.

(Spoiler: I do, there’s tons coming, no I’m not allowed to tell you about them until they go public. Like HEX, there will be lots of risk with potentially commensurate reward).

That being said, I don’t invest for 4x returns.

So let’s consider the state of play.

Model to Reality

Let’s start with the numbers.

My 2025 model assumed $500/Mcf helium pricing and conservative sustained flow rates of 2,000 Mcf/day raw gas per well at 1.1% helium grade.

Three wells at those rates generates roughly 66 Mcf/day of pure helium, or approximately $12 million in annual pre-tax revenue.

That was the 2025 target.

I do accept that it’s taken to May 2026 to get there, but ultimately in terms of AIM market delays, I can live with that.

In my February interview, Bo confirmed that each of the three producing wells is capable of flowing 2 million cubic feet of raw gas per day. He also confirmed they are starting in a measured way — running each well at around 1,500 Mcf/day while the plant is fine-tuned — which is simply sensible commissioning practice.

And possibly part of why we had an offtake RNS delay.

Possibly not.

I have theories.

At 1,500 Mcf/day across three wells at 1.1% helium, you get roughly 50 Mcf/day of pure helium. Bring Inez #1 online as the fourth well and you hit the plant’s rated input capacity of 6 million Mcf/day, translating to approximately 70 Mcf/day of pure helium — or $35,000 per day at $500/Mcf, nearly $13 million annualised.

That’s Bo’s own number from the interview, and the maths all tracks to this point.

Now today’s RNS.

The first contracted offtake arrangement delivers initial volumes of 30 to 40 Mcf per day. At the midpoint of 35 Mcf/day, that’s below the theoretical 70 Mcf/day plant capacity — but this is the opening position of a ramp, not the ceiling, and the counterparty has already committed to arranging additional trailer capacity to remove the logistics bottleneck.

Production is currently from three wells with further wells available for acceleration as the arrangement scales.

But consider the pricing.

The RNS confirmed the arrangement is at prevailing spot market rates for Grade A helium, and that those rates are substantially in excess of our original $500/Mcf assumption. Bo’s statement could not be clearer — the model was built on conservative estimates, and the actual market is delivering above them.

North American spot helium is currently running at $1,000–$1,200/Mcf for immediate delivery, against contract pricing of $500–$600/Mcf for established supply agreements.

The reason is not exactly secret.

The Strait of Hormuz closure following military operations in early 2026 immediately has restricted Qatar’s export capacity, and Qatar supplies roughly a third of global helium. Russia, worth 10% of global trade, has also shut off supplies.

The supply shock is real, the timing is not of Helix’s making, and they happen to be selling into it.

And Bo made a deliberate strategic decision — confirmed in the February interview — to wait until gas was physically flowing before inviting offtakers to site.

Come to Montana, see the plant running, test the product. That decision, which frustrated some shareholders at the time (to put it mildly), has delivered a first offtake at spot rates during one of the tightest helium markets in history.

The timing paid off.

Maybe he knows what he’s doing.

You can easily run the actual numbers at various realistic pricing scenarios, using the RNS midpoint of 35 Mcf/day:

At $700/Mcf — a conservative interpretation of ‘substantially above $500’ — that is $24,500 per day, or approximately $8.9 million annualised from three wells at ramp-up volumes.

At $900/Mcf — mid-range current spot — that is $31,500 per day, or approximately $11.5 million annualised.

At $1,100/Mcf — upper end of current spot — that is $38,500 per day, or approximately $14 million annualised.

At full four-well capacity of 70 Mcf/day, those numbers roughly double. The $12 million annual revenue figure from the original model now looks like a floor, not a ceiling.

However, we do need to consider the question mark on purity. The RNS denoted grade A helium which sits at 99.995% — four nines.

Helix has indicated Rudyard’s wells are capable of producing to five nines, the Ultra High Purity specification used in semiconductor fabs and quantum computing. If Helix demonstrates UHP capability during this initial three-month period, the longer-term offtake conversation changes materially on price.

The three months is unlikely to be a relationship-building exercise — it may be the window in which purity is proven and the long-term deal is structured accordingly.

Alternatively, the two parties simply realised spot makes more sense right now because the future long-term pricing of helium is a bit of a nightmare to estimate fairly - whether Hormuz opens soon, or how long it may take for supplies to normalise given the infrastructure damage to major producing fields and plants in the Middle East are questions to which there are many different answers.

Regardless, even in the long run, domestic supplies will now forever command a price premium anyway, simply on fears of supply chain security.

This is doubly true for five 9s, the supply of which is very much a US national security issue.

Which again makes getting there very very important.

But bottom line, the model has held up.

My personal theory - and I stress theory only - is that the delay was actually due to HEX drawing up a Rudyard asset sale agreement where the three month trial is designed to let the major in question test the product fully before committing to signing a big cheque.

If true, I want an actual big cheque.

Like a lottery one with champagne and cheesy smiles included.

Either that, or we drill 20 wells and send the market cap to hundreds of millions of dollars.

Geology Goodness

But wait.

There’s more.

In October, Helix announced Durham University analysis of Rudyard rock samples had recorded a ³He/⁴He ratio of 0.74 Rₐ — over 3,600% above average continental crust values, with helium-3 concentrations averaging greater than 10 parts per billion across the reservoir.

Bo explained it simply:

Rudyard sits atop what was once a laccolith — a volcano that never made it to the surface. That geological history means Rudyard has direct communication with the Earth’s mantle. Roughly 9% of the helium at Rudyard originates from the mantle rather than from the radioactive decay of uranium and thorium in crustal rock that produces conventional helium-4.

Why does this matter commercially?

Because mantle-sourced helium systems are actively replenished from below rather than simply sitting in a finite trapped reservoir. The field life implications of a mantle connection are profound — this is not a deposit that depletes on a standard curve and is gone.

The replenishment mechanism is geological time, not human time.

Not only do we have helium-3, but our gas stores in general are constantly replenishing.

It’s a renewable resource.

Helium-3 itself commands prices of approximately $2,500 per litre. There is currently no commercial technology to separate it from helium-4 at scale — Bo confirmed this directly — but that is a technology gap that carries enormous commercial incentive to close, and both Helix and others are in dialogue with potential collaborators.

When separation becomes viable, Rudyard’s consistent 10+ ppb helium-3 concentration across the reservoir becomes an entirely different revenue line.

One that the US government will want access to.

This is not in the current valuation.

Then there’s the geological hydrogen.

The mantle connection at Rudyard does more than explain the helium-3 presence. It indicates deep crustal fractures channelling fluids upward from the Earth’s interior — the plumbing required for active hydrogen generation through a process called serpentinisation.

When water reacts with ultramafic rocks rich in iron and magnesium at depth and pressure, hydrogen is produced. Lab analysis through XRD, XRF and Mössbauer spectroscopy confirmed that Rudyard rock cuttings contain serpentine, olivine and magnetite — the minerals involved in this process — and that they are actively undergoing, or have already undergone, the alteration capable of generating hydrogen.

I asked Bo directly in February about those Inez #1 ultramafic core samples and what changed his internal thinking.

His answer:

The cores showed rock that has already been altered — meaning it has already produced hydrogen. The question now is whether free hydrogen has collected in fracture systems at depth.

He called it lights out if they find it.

He went further on Ingomar, Helix’s original flagship asset, which has been temporarily set aside while Rudyard was prioritised.

During drilling at Clink #1, the mud readings returned nearly 12% hydrogen.

Bo’s words: nobody has ever seen it. It was the biggest shock of their lives. The Flathead Formation at Ingomar has still never been commercially flow tested.

That situation will now change, with Rudyard generating cash flow to fund the next phase.

And the geological hydrogen story is already moving from promising to validated.

Last month, HEX was selected by Renaissance Philanthropy’s Chimaera Fund to participate in the Air Force Geologic Hydrogen Energy Resilience Initiative — a demonstration programme assessing whether geologic hydrogen can strengthen energy resilience at critical Air Force Bases.

Helix was chosen from nearly 30 respondents to a competitive Request for Information, beating out multiple exploration companies, national laboratories, university research groups and engineering consultancies.

The strategic logic is not subtle.

Rudyard sits 120 miles from Malmstrom Air Force Base — home to the 341st Missile Wing and one of only three US Air Force installations operating the Minuteman III intercontinental ballistic missile system.

A Congressional mandate requires the Department of War to achieve 99.9% energy availability at critical military installations by 2030. Domestically sourced geologic hydrogen, generated with no carbon emissions and no energy input, sitting 120 miles from a nuclear missile base, answers that brief rather precisely.

But of course, it won’t just be hydrogen data collected. If Rudyard can demonstrate it’s a helium-4, helium-3 and geological hydrogen renewable source that can function even in the event of a nuclear or zombie apocalypse, this becomes a nationally significant asset.

The offer will come in - the US will either buy it, pay out a shedload of grant funding, or manage it through one of their domestic majors.

One of which is testing and buying Rudyard’s offtake.

Right now.

And Helix is not a data provider to this programme. It’s an active collaborator, contributing subsurface measurements, drilling cost data, mineralogical and geochemical analysis, and well infrastructure data — receiving funding from the Chimaera Fund in return.

This is the US government already paying Helix to prove up its own resource.

Bo put it plainly: the convergence of national energy security priorities with Rudyard’s existing geological assets is exactly the kind of opportunity they have been building toward.

The Section 45V clean hydrogen tax credit under the Inflation Reduction Act provides up to $3 per kilogram for qualified clean hydrogen production.

Geological hydrogen has near-zero production cost once wells are drilled, emits no carbon, and would qualify for the maximum credit tier.

The DOE’s Hydrogen Shot targets $1/kg production cost. Geological hydrogen from Rudyard, if confirmed at commercial scale, beats that target without any additional processing requirement.

None of this — the helium-3 optionality, the geological hydrogen, the Air Force partnership, the Ingomar potential — is reflected in the current market cap.

Market Cap Potential

Helix trades at circa £75 million today (it may be slightly higher at this very second but this is an easier number to use).

Let’s work through the expansion case.

Bo’s stated plan is one new well per quarter.

Yes, the timeline has slipped by a few months, but assume we add a well in Q3, and another in Q4 and so on and so forth.

We’ll be at 20 wells around 2030 (though again, I don’t see us lasting this long).

At $4 million revenue per well — Bo’s own figure from the interview, based on Darwin #1’s expected annual cash flow — twenty wells generates $80 million in annual revenue. Apply a 6x multiple once the field is proven and producing consistently, and the implied market cap is $480 million.

At £75 million today, that represents a 4 to 5x return on the helium-only case over three years, assuming steady execution and no strategic intervention.

But strategic intervention is arguably the more likely outcome.

Bo was direct in the February interview.

His personal ambition is to become the second largest domestic helium producer in the United States behind ExxonMobil. He is also clear-eyed that the major industrial gas companies — Linde, Air Products, ExxonMobil — control helium from source to end user and are not drilling new wells themselves.

Explorers find it.

The majors buy it, or buy the people who found it.

The Drachs family office, with over $1 billion in assets under management, joined as cornerstone investors in the June 2025 placing. People familiar with them describe their positioning as oriented toward the endgame — a strategic transaction that crystallises value well above current levels, not a modest return on a small placing.

The OTCQB listing is also significant. US institutional volume on OTC listings starts slow. Then it rockets. Helix already has the infrastructure in place for when American capital discovers the story.

That moment becomes considerably more likely now that there is contracted revenue to point to.

Add the first offtake RNS — a large industrial gases group committing to 100% of deliverable volumes and proactively arranging additional trailer capacity — and the credibility of the operation is no longer theoretical.

If geological hydrogen is confirmed at commercial scale, the revenue line expands, the tax credit economics become significant, and the strategic value to a major buyer multiplies. That scenario is very difficult to model because it has no direct comparable.

Outside of the well in Mali, there is no other known commercial geological hydrogen resource in the world. If Rudyard becomes the second, this hits national headlines.

And if helium-3 separation technology emerges — which the price differential of roughly 100,000 times the value of helium-4 provides every incentive to accelerate — Rudyard’s consistent mantle-sourced helium-3 becomes a revenue stream that dwarfs the helium-4 business.

None of that is in the current price.

The Bottom Line

Helix has done what most junior explorers never do.

It moved from IPO to first production in 22 months. Every well drilled at Rudyard has been a producer. The geology has exceeded expectations at every step. The processing plant has been commissioned. The first offtake is signed with a large industrial gases counterparty at prices far above the pre-IPO model.

Let’s be honest - it’s likely Linde or Air Products. It’s not like this will stay secret for long (someone drives the truck and the logo is on the hard hats).

And the CEO is in continued conversation with government officials about the strategic implications of what sits beneath Rudyard.

The helium business alone, scaled to twenty wells, justifies a market cap multiple of the current level.

The geological hydrogen, if confirmed, changes the nature of the asset entirely.

The helium-3 mantle connection is an option that carries no downside and potentially extraordinary upside as separation technology develops.

Ingomar, with its 12% hydrogen mud readings and untested Flathead Formation, has not even entered the conversation yet.

Bo has been in this industry for 27 years. He has brought projects online before.

He authored Helium: The Disappearing Element in 2015, testified before the US House of Representatives on America’s helium supply, and led the discovery of Canada’s first Grade-A capable helium project before founding Helix.

This is the fastest he has ever done it.

And he is sitting on nearly 2,000 pounds of wellhead pressure — wells that behave, in his words, like jet engines.

At £75 million, the market is paying for what it thinks Helix is today.

It is not yet paying for what Rudyard alone is.

P.S. Rift Helium recently IPO’d - you can buy under the IPO price and I see a similar success story in the long term (though with perhaps amplified risk). You can read my view here.