OverviewHelium is an essential resource required in numerous industrial applications, including modern MRI systems, fiber-optics production, semiconductors, space exploration and arc welding. The more high-tech the world becomes, the more helium it’s going to need, and for most uses, there is no available substitute. The helium market is expected to increase from $4.45 billion in 2022 to $5.03 billion in 2023 at a compound annual growth rate (CAGR) of 12.9 percent and is expected to grow further from $6.48 billion in 2027 at a CAGR of 6.6 percent.North America has historically represented the largest source of helium consumption, with the United States consuming 74 million cubic meters of helium, and Qatar in second place at almost half the consumption at 45 million cubic meters.Western Canada is in a perfect position to capitalize on the surge in demand caused by increased high-tech usage along with the US Bureau of Land Management (BLM) announcing it will dispose of all remaining helium assets and helium in storage which previously accounted for 25 percent of global helium supply. Saskatchewan is home to one of the most highly concentrated helium resources in the world. A ‘land rush’ has taken place in Saskatchewan to secure land rights to previously untapped helium resources which arise due to decaying uranium and thorium deposits. To further accelerate this rush, the Government of Saskatchewan has created the Helium Action Plan, setting the lofty goal of going from ~20 helium wells currently to 150+ helium production wells, and producing 10 percent of the global helium market.
Helium Evolution Incorporated (TSXV:HEVI) is a Canadian helium exploration and development company focused on helium extraction that offers a ‘green’ alternative to harvesting helium as a byproduct of natural gas. HEVI owns land rights to more than 5 million acres, and an incremental 200,000 acres of permits under application, representing the largest land package in Canada controlled by a public entity.
HEVI’s land package is located in a helium-rich area and in close proximity to the US market, facilitating easier trade. Additionally, the company plans to acquire more potentially prospective land rights in the Saskatchewan fairway.HEVI selected southern Saskatchewan for a variety of reasons. First, the decaying uranium in the area’s basement rocks has produced significant helium reserves throughout southern Saskatchewan. Second, Helium Evolution’s target geological formation, known as The Deadwood, contains up to 2 percent proven helium content alongside 95+ percent nitrogen content. Existing geophysical data is readily available and will help Helium Evolution select the best drill targets.
Why does this matter? The presence of nitrogen as the carrier gas allows Helium Evolution to vent the gas in an environmentally friendly manner while also providing cost advantages during the helium extraction and liquefaction processes. Additionally, drilling for helium is similar to extracting conventional natural gas, meaning there’s no need for specialized equipment, and management’s existing oil and gas development expertise can be leveraged. Low-cost vertical drilling is all that’s required for HEVI to begin extraction.
HEVI is led by an impressive management team with a combined 150 years of resource development experience, including engineering, geological and executive management across the corporate landscape. CEO Greg Robb boasts 35 years of direct experience in Western Canada where he focused on the acquisition and development of natural resources in the region. Patrick Mills, COO, brings over three decades of executive, managerial and engineering experience in Western Canada as well. Meanwhile, VP John Kanderka has 40 years of directly applicable experience in the energy and mineral sectors, serving as an officer in both public and private entities. The management team is complemented by a strong board of directors, which includes the former premier of Saskatchewan, Brad Wall, and senior energy executives Mike Graham, Philip Hughes and James Baker.Company HighlightsHelium Evolution Incorporated (HEVI) is capitalizing on the untapped potential of Saskatchewan’s helium resourceThe company has land rights to 5.5 million acres with a pending application for approximately 200,000 additional acres, representing the largest land package held by a public company in North America.HEVI’s Saskatchewan holdings put the company in a natural resource-friendly province with a skilled local workforce and a supportive governmentHEVI is focused on helium extraction in wells that have nitrogen as the carrier gas, creating an environmentally friendly operation that will also create a cost advantage during the extraction and liquefaction processesHEVI’s land package contains significant helium targets created by radioactive decay; existing exploration data will help the company select drill targets offering higher probabilities of successThe company is led by an impressive management team with a combined 150 years of experience in resource development and executive leadershipKey ProjectThe DeadwoodHelium Evolution is targeting a geological formation known as The Deadwood Sand Reservoir for its initial exploration and development. Multiple drilling targets for near-term development have already been identified. Seismic data for these targets is undergoing analysis before drilling begins.Project Highlights:Existing Geophysical Data: Helium Evolution has acquired a significant amount of data, including well logs, aeromagnetic data and seismic data to assess the best drill targetsSimple Drilling Process: Drilling for helium is similar to conventional natural gas drilling, only requiring a vertical drill and does not require specialized equipment or fracture stimulationNitrogen Carrier Gas: Nitrogen is the primary carrier gas, allowing for environmentally-friendly venting and a cost advantage during extraction and liquefactionNearby Wells: A nearby helium development, the Mankota Pool, has demonstrated a nitrogen-rich reserve boasting helium contents of 1.08 percent and has a nearby helium production facility. Although the first two exploration wells drilled at McCord did not return sufficient quantities of helium to warrant production testing, HEVI CEO Greg Robb said the company is continuing to conduct analysis on the wells and HEVI has not changed the positive outlook they have on the asset.HEVI accelerated its drilling program through an enhanced farmout with North American Helium (NAH) in 2022. NAH has committed to a minimum of five and up to eight potential wells that can be drilled and will be fully funded by NAH, along with the shooting and review of additional seismic data.Management TeamGreg Robb – President and Chief Executive OfficerGreg Robb brings more than 35 years of experience across all facets of Western Canadian energy resource activity, including exploration and development, acquisitions and dispositions, and reserve valuations. He previously held executive positions in several E&P companies and founded Salvo Energy Corp. in 2006. He has extensive experience in heavy oil, shallow gas, coal bed methane, deep basin tight gas, and conventional oil and gas plays, evaluating over $500MM of acquired assets.Patrick Mills – Chief Operating OfficerPatrick Mills has more than 36 years of executive, managerial, and engineering and operational experience in the Western Canadian Sedimentary Basin. He previously founded Mustang Resources and Pegasus Oil & Gas, where he held executive and board positions, as well as technical and managerial positions with Texaco, Imperial Oil Ltd and Startech Energy.Kristi Kunec – Chief Financial OfficerKristi Kunec has more than 15 years of financial experience, with a proven track record that includes leading the corporate finance, organizational planning and financial reporting functions for growing resource companies. Over the last 13 months, she has served as part-time controller for Kanata Clean Power & Climate Technologies Corp., and prior to it was chief financial officer and corporate secretary for Pine Cliff Energy Ltd. (TSX:PNE). Kunec directly contributed to the growth of the company from approximately 100 boe/d to 24,000 boe/d, which included closing four equity offerings that raised more than $170 million, and the completion of two corporate and seven asset acquisitions. Prior to Pine Cliff, Kunec was controller for North American Oil Trust, corporate controller for Orion Oil & Gas Corporation, and manager of financial reporting for TransGlobe Energy Corporation. After graduating with a Bachelor of Commerce from the University of Saskatchewan, she began her career at PriceWaterhouseCoopers LLP in 2003, earning her CPA, CA designation in May of 2006.John Kanderka – VP, Corporate DevelopmentJohn Kanderka has more than 40 years of experience in the energy and mineral sectors as an officer and director of private and public entities. He founded multiple companies leading to a wide array of experience in corporate finance, mergers and acquisitions, buyouts, and corporate restructuring. He is currently a director of Orestone Mining Corp. and chairman and founder of Visionary Gold Corp.Brad Wall – DirectorBrad Wall is a special advisor in the Osler Calgary office. Prior to joining Osler, he was in politics for 18 years where he demonstrated a consistent ability to bring political and business leaders together as he implemented creative ways to bolster the Province’s economic well-being. Wall was elected as Premier of Saskatchewan and helped lead the province to a period of record population and economic growth, export expansion, record infrastructure investment and tax reductions while helping to earn the province’s first ever AAA credit rating. Wall offers Osler clients his strategic insight and guidance, particularly in relation to the energy and agri-food industries.Heather Isidoro – DirectorHeather Isidoro has more than 20 years of experience in the energy industry, the last 17 of which were focused on business development, most recently as the vice president of Business Development with Pine Cliff Energy Ltd. She specializes in acquisitions and divestitures, reserves valuations, and financial modeling. Isidoro is president and a director of the Petroleum Acquisitions and Divestitures Association, and a trustee of the University of Saskatchewan Engineering Advancement Trust. She has a BSc in geological engineering from the University of Saskatchewan, and an MBA from Athabasca University.
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