Georgina Energy Nears Critical Drilling at Hussar Project, Pursuing Helium & Hydrogen Resources in Australia

• Georgina Energy is pursuing helium, hydrogen, and natural gas projects in Australia, with a focus on re-entering an existing well at their Hussar project in December.
• The company is in advanced discussions with a potential farm-in partner for other assets and expects to complete environmental and heritage studies for Hussar in November.
• Georgina anticipates a 50-day drilling program at Hussar starting in December, targeting gas in the subsalt Townsend formation at around 3,200 meters depth.
• If successful, the company expects to be reimbursed for drilling costs by offtake partners and use that to fund development of its Mt Winter project.
• Georgina sees potential for multiple wells and significant gas resources if initial drilling is successful, with helium and hydrogen as high-value products.

Georgina Energy is an early-stage energy exploration company pursuing helium, hydrogen and natural gas resources in Australia. The company is approaching a critical juncture with plans to re-enter an existing well at its Hussar project in December 2024, targeting potentially significant gas resources containing helium and hydrogen. For investors seeking exposure to the growing helium and clean hydrogen markets, Georgina offers a high-risk, high-reward opportunity as it nears its first major drilling program.

Company Background & Assets

Georgina Energy recently listed on the London Stock Exchange and holds exploration permits covering over 35,000 square kilometers in Australia. The company's primary focus is on two key assets:

• Hussar Project: Located in the Officer Basin, this project involves re-entering an existing well originally drilled for oil in 1982. Georgina is targeting gas resources in the subsalt Townsend formation.
• M‍t Winter Project: An exploration permit in the Amadeus Basin that has been under application for 16 years. Georgina recently made progress on obtaining approvals from traditional landowners.

The company's strategy revolves around re-entering existing wells and utilising modern techniques to assess and potentially produce helium, hydrogen and natural gas resources that were previously overlooked or uneconomic. This approach allows Georgina to pursue high-value products like helium and hydrogen while keeping initial capital costs relatively low.

Interview with Chief Executive Officer, Anthony Hamilton

Upcoming Catalysts: Hussar Project Drilling

The most immediate and significant catalyst for Georgina Energy is the planned re-entry and drilling at the Hussar project. CEO Anthony Hamilton provided details on the upcoming program:

"We will be on site to commence drilling in December and barring any unforeseen problems, it'll be a 50-day program to complete the job."

This drilling program represents a pivotal moment for the company, as it will provide the first concrete data on the presence and composition of gas resources in the target formation. The key steps and timeline include:

• November 2024: Site visit to complete environmental and heritage studies required for final permitting.
• Early December 2024: Expected receipt of drilling permit.
• December 2024: Mobilisation of drilling equipment to site.
• December 2024 - February 2025: 50-day drilling program to re-enter the existing well, drill out plugs, and reach the target Townsend formation at approximately 3,200 meters depth.
• Q1-Q2 2025: If successful, 3 months of testing and analysis of gas composition and flow rates.

The relatively short timeline to drilling and the defined 50-day program provide investors with a clear horizon for potential value-driving news flow. Success at Hussar could dramatically re-rate the company's valuation and open up funding for further exploration and development.

Geologic Potential & Resource Targets

Georgina Energy is primarily targeting the subsalt Townsend formation at the Hussar project, which is believed to host natural gas with potentially significant concentrations of helium and hydrogen. The company's thesis is based on historical drilling data and regional geology.

Hamilton explained the rationale:

"We know that once we punch through the primary plug it's a ride all the way down to the bottom of the hole at 2040 meters. We're interested in the subsalt Townsend formation... that's what hosts the natural gas, the helium and hydrogen."

While the exact resource potential remains speculative until drilling is completed, the company sees several encouraging factors:

• Historical gas shows: The original well encountered gas at 1,100 meters and 1,900 meters depth, although these were not the primary target at the time.
• Regional geology: The Officer Basin is known to host helium and hydrogen resources in certain formations.
• Large permit area: Georgina's 35,000 square kilometer permit provides significant running room if initial drilling is successful.
• Multiple pay zones: The potential for gas at different depths could enhance overall resource potential.

It's important for investors to note that this is a high-risk exploration play. While the presence of an existing well reduces some uncertainty, there is no guarantee of commercial gas flows or economically viable helium/hydrogen concentrations until drilling and testing are completed.

Helium & Hydrogen Markets

The focus on helium and hydrogen as target resources sets Georgina Energy apart from traditional oil and gas explorers. Both commodities have attractive market dynamics:

Helium

• Critical for many high-tech and medical applications
• Supply constraints due to U.S. strategic reserve selloff
• Prices have seen significant volatility and spikes in recent years
• Classified as a critical mineral in some jurisdictions

Hydrogen

• Growing interest as a clean energy carrier
• Potential applications in transportation, industry, and energy storage
• Australian government support for hydrogen industry development

Natural gas production would provide a base level of economics, while helium and hydrogen content could significantly enhance project value. This multi-product approach helps mitigate some commodity price risk.

Funding & Partnership Strategy

Georgina Energy is pursuing a capital-efficient strategy by focusing on re-entering existing wells and seeking industry partnerships. Key elements include:

• Fully funded for Hussar drilling: The company states it is fully funded through the initial Hussar drilling program, with estimated costs of $1.5-1.6 million.
• Offtake agreements: Georgina has signed one offtake agreement and is in discussions with others. These agreements could provide capital for development: "One of the conditions that we have set with the offtakers was that in the event that is economic and sustainable and it meets their requirements, then we want to be reimbursed for our entire development cost for that well," Hamilton stated.
• Farm-in discussions: The company is in talks with a potential farm-in partner for other assets, which could provide additional funding and technical expertise.
• Low initial capital requirements: By re-entering existing wells, Georgina keeps upfront costs lower than drilling new exploration wells.

This approach allows the company to maintain a strong financial position and potentially fund future work through partnerships rather than dilutive equity raises, assuming drilling success.

Development Timeline & Future Potential

If the Hussar drilling program is successful, Georgina Energy envisions a phased development approach:

• Q1-Q2 2025: Extended well testing and analysis (3 months)
• 2025-2026: Potential additional appraisal wells to delineate the resource
• 2026-2027: Field development planning and regulatory approvals
• 2027-2028: First commercial production (estimated)

Success at Hussar would also de-risk the company's Mt Winter project and potentially accelerate its development. The large permit areas provide running room for a multi-year drilling and development program if initial results are positive.

Hamilton emphasised the long-term potential:

"The one well at Hussar is the discovery well, it's not the only well. You're not going to get all the gas you want out of one well, you're going to have to drill multiple wells over the reservoir to get the flow rate for the offtaker."

This highlights the scalability of the opportunity if the initial well is successful, providing investors with exposure to potential resource growth over time.

Market Dynamics & Pricing

Georgina Energy is positioning itself to take advantage of favorable market dynamics in both the domestic Australian gas market and global helium/hydrogen markets:

Natural Gas

• Australia is traditionally a major LNG exporter but faces domestic supply challenges
• Government initiatives to increase east-west gas connectivity could benefit new producers
• Potential for premium pricing in the domestic market

Helium

• Global supply constraints due to U.S. strategic reserve depletion
• Critical for high-tech industries with limited substitutes
• Potential for very high margins on helium production

Hydrogen

• Growing interest in hydrogen as a clean energy carrier
• Australian government support for hydrogen industry development
• Potential for premium pricing for "green" or low-carbon hydrogen

The company is taking a conservative approach to pricing assumptions in its economic modeling. Hamilton noted:

"We've done all our modeling at a price which was the last auction price back in the U.S. So it's a low number, $0.28 cents or $2.80 per mcf. Currently, sale prices are $6.00."

This conservative approach provides potential upside if commodity prices remain strong while giving the company a cushion against price volatility.

The Investment Thesis for Georgina Energy

• High-impact exploration play targeting helium, hydrogen, and natural gas
• Near-term catalyst with Hussar drilling program starting December 2024
• Capital-efficient strategy leveraging existing wells and industry partnerships
• Exposure to attractive helium and hydrogen markets
• Large acreage position provides significant running room if successful
• Conservative pricing assumptions in economic modeling

Georgina Energy represents a speculative but potentially high-impact investment opportunity in the energy exploration sector. The company's focus on helium and hydrogen, combined with its capital-efficient strategy of re-entering existing wells, provides a unique angle on the traditional oil and gas exploration model.

The upcoming drilling program at the Hussar project serves as a near-term catalyst that could dramatically re-rate the company's valuation if successful. However, investors must be aware of the high risks associated with early-stage exploration and the company's dependence on positive results from a single well in the near term.

Georgina's large acreage position and phased development approach offer the potential for significant resource growth and value creation if initial drilling proves successful. The company's conservative economic assumptions and focus on securing offtake agreements and industry partnerships demonstrate a prudent approach to managing risk and capital.

For investors willing to accept the high risk-reward profile, Georgina Energy offers exposure to the growing helium and hydrogen markets with a defined timeline for potential value creation. Close monitoring of upcoming milestones, particularly around the Hussar drilling program, will be crucial for assessing the investment thesis as it unfolds.

Macro Thematic Analysis

Georgina Energy's focus on helium, hydrogen, and natural gas exploration in Australia aligns with several key macro trends in the global energy landscape:

• Critical mineral supply security: Helium's classification as a critical mineral in some jurisdictions highlights growing concerns about supply chain resilience for key technological inputs. Georgina's potential helium production could help diversify global supply.
• Hydrogen economy development: Governments and industries worldwide are investing heavily in hydrogen as a clean energy carrier. Australia, in particular, has ambitious plans to become a major hydrogen producer and exporter.
• Natural gas as a transition fuel: While long-term decarbonisation goals may challenge natural gas demand, it remains an important transition fuel in many markets. Australia's domestic gas challenges create opportunities for new producers.
• Energy security concerns: Geopolitical tensions and supply chain disruptions have heightened focus on domestic energy production. Georgina's Australian assets could contribute to national energy security.
• Technological advancements in exploration: The company's strategy of re-entering existing wells leverages modern techniques to reassess previously overlooked resources, a trend seen across the industry.
• ESG considerations: While natural gas production has environmental concerns, the focus on helium (critical for medical and scientific applications) and hydrogen (potential clean fuel) aligns with growing ESG investment criteria.

The macro environment presents both opportunities and challenges for Georgina Energy. Success could position the company as a key player in emerging helium and hydrogen markets, while also benefiting from near-term natural gas demand. However, long-term energy transition trends and potential regulatory changes around emissions could impact the overall market dynamics.