Helix Exploration: Fully Funded Path to Production in America's Critical Helium Market

• Helix Exploration owns the Rudyard Field in Montana with 355 million cubic feet of recoverable helium reserves, moving from exploration to production phase
• Despite current oversupply, geopolitical tensions around Qatar's North Pars Field create supply security concerns, favoring North American production
• Company demonstrates 100% drilling success rate (3 for 3 wells) with efficient cost management and self-funding capability through production
• Production plant two-thirds complete with helium sales expected by end of summer 2025, targeting $4 million gross revenue per well annually
• Helium's unique atomic properties make it irreplaceable in critical applications from MRI machines to semiconductor manufacturing

The helium market represents one of the most strategically important yet under-appreciated commodity sectors in today's economy. As CEO Bo Sears of Helix Exploration explains, "Helium is very inelastic, extremely inelastic. There is no substitute for most of helium's applications by virtue of its atomic properties." This fundamental characteristic creates a compelling investment thesis that extends far beyond traditional commodity cycles.

Helix Exploration has positioned itself as a pure-play helium explorer and producer with assets strategically located in the United States. The company's Rudyard Field in Montana contains an estimated 355 million cubic feet of recoverable helium, representing a significant resource that could generate substantial returns as global demand continues to grow across critical industries.

The timing of Helix's development appears particularly fortuitous. While the market currently experiences some oversupply, geopolitical tensions create long-term supply security concerns that favor North American production. As Sears notes:

"With this ongoing conflict with Iran, that poses severe geopolitical concerns, especially in the helium market, that North Pars Field is adjacent to the large Qatari field."

Market Dynamics & Demand Drivers

The helium market's structural characteristics create a unique investment opportunity driven by inelastic demand and limited supply alternatives. Unlike many commodities where substitution can occur during price spikes, helium's applications are largely irreplaceable due to its unique atomic properties.

From medical applications to advanced manufacturing, helium serves critical functions that cannot be replicated by other gases.

"You can't replace helium, even if you go down to the bottom use, which is balloons, you can't replace helium with hydrogen for obvious purposes. Think Hindenburg. Up the food chain to the MRI machines and the semiconductor manufacturing, there are no other elements that can do what Helium does."

This demand inelasticity provides pricing power and revenue stability that many commodity investments lack. The semiconductor industry's continued growth, expanding medical imaging requirements, and aerospace applications create a diversified demand base that supports long-term market fundamentals.

Current market dynamics show temporary oversupply, but this creates an advantageous entry point for new production. Existing producers largely operate under long-term take-or-pay contracts, leaving spot market opportunities for new entrants like Helix. The company's hybrid approach targeting both contract stability and spot market upside positions it to capture maximum value from its production.

Interview with Chief Executive Officer, Bo Sears

Operational Strategy & Production Goals

Helix Exploration's operational strategy demonstrates the disciplined approach necessary for successful resource development. The company maintains a clear focus on helium production while remaining opportunistic about potential hydrogen discoveries. "We are first and foremost a helium company and I need to make sure that everyone understands that," Sears emphasizes.

The operational timeline shows impressive execution with production targeted for end of summer 2025. Current progress includes a drilling rig on site ready to begin operations and a processing plant that is two-thirds complete. Critical membrane components are in transit from Europe, indicating the company's commitment to maintaining project schedules.

Helix's drilling strategy maximizes economic efficiency through optimal well spacing. Each well can drain an entire section (one square mile), reducing exploration costs by eliminating the need for infill drilling. This approach minimizes capital requirements while maximizing resource recovery, creating superior economics compared to more dense drilling programs.

The company's partnership strategy also merits attention. Working with established operators like Wacoda and Treasure State Drilling provides operational expertise while maintaining cost control. As Sears notes, "We're really impressed with our partners, Wacoda and Treasure State Drilling. Just a top-drawer team."

Financial Strategy & Capital Discipline

Helix Exploration's financial strategy centers on self-funding growth through cash flow generation, a approach that minimizes dilution while maintaining growth optionality. The company reports being "fully funded through production on the Rudyard field" with plans to use initial cash flows to fund additional drilling organically.

This self-funding approach offers several advantages. First, it eliminates the dilution risk associated with continuous equity raises common among exploration companies. Second, it demonstrates management confidence in project economics and cash generation capability. Third, it provides operational flexibility to accelerate development when conditions warrant.

The company's capital discipline extends to operational efficiency. By maintaining drilling equipment on site and coordinating operations to minimize mobilization costs, Helix reduces per-well development costs.

"We're saving on mobilization and demobilization costs because we're keeping the rig busy," Sears explains.

Revenue projections of approximately $4 million gross per well annually provide a framework for evaluating expansion potential. With three producing wells and additional drilling planned, the company's revenue base should grow substantially through 2025 and beyond.

Reservoir Characteristics & Drilling Success

The geological characteristics of Helix's Rudyard Field provide the foundation for the company's production capabilities and expansion potential. The reservoir consists of dolomite formations with enhanced porosity and permeability characteristics that support efficient helium extraction.

"Our reservoirs are dolomite. So dolomite was once limestone that has been dolatomized via seawater. That generally increases porosity in a rock, but in addition to permeability," Sears explains. The fractured nature of the reservoir system further enhances deliverability, creating optimal conditions for helium production.

The company's drilling success rate of 100% (three successful wells from three attempts) demonstrates both geological understanding and operational competence. The reservoir's thickness of 210 feet or more across two producing zones (Red River and Soros River) provides substantial resource access from each wellbore.

Historical validation supports current resource estimates. The United States Bureau of Mines estimated 2.6 billion cubic feet of helium in the field based on 1960s data, providing third-party confirmation of the resource potential that Helix is developing.

Recent drilling results show improving reservoir characteristics in southern portions of the field. "We had actually better deliverability on a well that was 25 feet low to our previous well. So the conditions seemingly are improving the further south we go," Sears notes, suggesting upside potential beyond current estimates.

Infrastructure & Gathering Systems

Helix Exploration's infrastructure development demonstrates the integrated approach necessary for efficient helium production and marketing. The company is installing a comprehensive gathering system that collects gas from individual wells through a trunk line system leading to the central processing plant.

The processing facility employs proven technology including compression, membrane separation, and pressure swing adsorption (PSA) systems. This configuration allows for efficient helium extraction and purification to commercial specifications. The modular nature of the system provides expansion flexibility as additional wells come online.

Infrastructure location provides competitive advantages through access to reliable power and transportation networks. "We couldn't be in a better place," Sears notes regarding the Montana location, which offers good road access and electrical infrastructure necessary for compression operations.

The gathering system design allows for efficient field development as additional wells are drilled. Each new well can be tied into the existing infrastructure, reducing per-well development costs and accelerating time to production for future drilling.

Economic Considerations & Pricing

Helix Exploration's economic model relies on premium helium pricing combined with efficient operational execution. The company has modeled $500 per thousand cubic feet (MCF) for helium sales, a price level that generates substantial margins given efficient operations.

Operational costs remain manageable due to several factors. Drilling costs are controlled through operational efficiency and equipment utilization. Processing costs are primarily related to compression and power consumption, both of which are reasonable in the Montana operating environment.

The economics become particularly attractive when considering the company's drilling efficiency. "We're drilling wells in a very cheap manner," Sears explains, with additional cost savings from keeping drilling equipment active and minimizing mobilization expenses.

Margin analysis shows the attractiveness of helium production compared to other commodities.

"Your variable cost is the only thing that's going to eat away your margins, but still our margins are huge. That's why people are in the helium exploration space, because the margins are quite large," Sears notes.

Market pricing discovery occurs through negotiation with potential customers rather than published indices. This relationship-based pricing approach can work to producers' advantage when supply conditions tighten or when establishing long-term contract relationships.

Market Position & Future Outlook

Helix Exploration's market position reflects the scarcity of publicly traded helium producers and the company's operational execution capabilities. Few companies offer direct exposure to helium production, creating differentiation value for investors seeking commodity diversification.

The company's operational excellence sets it apart from competitors who may face execution challenges. "You really just have to take note of operational expertise and hitting benchmarks. That is the most important thing," Sears emphasizes when comparing to other helium companies.

Future expansion opportunities include both additional drilling within the Rudyard Field and potential acquisition of additional acreage. Cash flow generation from initial production provides the financial foundation for organic growth without dilutive equity raises.

Long-term aspirations include helium liquefaction capabilities that would open global export markets.

"If you can take the helium to liquid, then your global market opens up,"

The company maintains optionality around natural hydrogen potential, an emerging opportunity that could provide additional value. Recent fundraising by companies like Koloma ($300 million for geological hydrogen exploration) indicates significant investor interest in this space.

The Investment Thesis for Helix Exploration

• Irreplaceable Product: Helium's unique atomic properties create inelastic demand across critical applications from medical imaging to semiconductor manufacturing
• Strategic Resource Control: 355 million cubic feet of recoverable helium reserves in a politically stable jurisdiction with excellent infrastructure access
• Proven Operational Execution: 100% drilling success rate, efficient cost management, and on-schedule development toward production by end of summer 2025
• Self-Funding Growth Model: Eliminates dilution risk while providing flexibility to accelerate development based on cash flow generation
• Market Timing Advantage: Current oversupply conditions provide favorable entry point while geopolitical supply concerns support long-term pricing
• Revenue Visibility: Clear path to $4 million gross annual revenue per well with expansion potential through additional drilling
• Limited Competition: Few pure-play helium investment opportunities in public markets, creating scarcity value for commodity diversification

Helix Exploration represents a compelling investment opportunity at the intersection of critical resource scarcity, operational excellence, and favorable market timing. The company's transition from exploration to production eliminates much of the geological risk while maintaining substantial upside potential through field expansion and market development.

The helium market's structural characteristics provide downside protection through inelastic demand while offering upside potential through supply constraints and geopolitical considerations. Helix's strategic position in North America, combined with proven operational capabilities and disciplined capital allocation, creates a differentiated investment opportunity in an essential but underappreciated commodity sector.

Macro Thematic Analysis: The Critical Materials Security Imperative

The global transition toward advanced technologies and medical applications has created unprecedented demand for specialized materials that cannot be substituted or synthetically produced. Helium represents a critical example of this trend, serving as an essential input for industries ranging from healthcare to advanced manufacturing, space exploration, and quantum computing applications.

Current geopolitical tensions highlight the vulnerability of supply chains for critical materials, particularly those concentrated in politically unstable regions. The North Pars Field's proximity to ongoing Middle Eastern conflicts underscores the strategic importance of North American helium production for supply security. This dynamic mirrors broader reshoring trends across various industries as companies and governments prioritize supply chain resilience over pure cost optimization.

The semiconductor industry's continued expansion, driven by artificial intelligence, electric vehicles, and Internet of Things applications, creates sustained demand for ultra-pure helium used in manufacturing processes. Medical imaging growth, particularly in emerging markets, adds another demand pillar that remains largely immune to economic cycles due to healthcare's essential nature.

Investment implications extend beyond individual company opportunities to broader portfolio diversification benefits. Traditional commodity investments often face substitution risks during price spikes, but critical materials like helium maintain pricing power due to their irreplaceable nature. This characteristic provides inflation protection and portfolio stability that conventional commodities may lack during economic uncertainty periods.