Helix Exploration (LSE:HEX) — Annual General Meeting

0:00 Good afternoon, ladies and gentlemen, and welcome to the HELIX EXPLORATION PLC Annual General Meeting. Throughout this recorded meeting, attendees online will be in listen only mode. Questions are encouraged. They can be submitted at any time via the Q and A tab that's just

0:20 would now like to hand you over to Chairman, David Minchin. David, good afternoon, Good afternoon, everyone, and good morning to our American colleagues. I'd like to welcome everybody to our first annual general meeting of HELIX EXPLORATION, and I thank you all for taking the time to join us today. My fellow directors in attendance are Beau Sures, Ryan Neets, Greg Peters, and Keith. So we have a full house. I firstly, I'd like to confirm we have a a call room present, and I declare the meeting duly constituted and open. I now seek permission of the shareholders to proceed with the business of the meeting. And if there's no no no no objections, we will continue.

1:09 No. Before we proceed with voting, I'd like to invite any questions on the resolutions as far as being proposed. Please raise your questions now, and we'll address them accordingly. In that case, thank you for no questions. We'll now move on with the voting results for each res resolution. Voting would be conducted in the room by a bow of hands. Shareholders wishing to vote in favor or against a resolution, please raise your hand accordingly. The the proxy results received ahead of the AGM will be announced in percentage terms, and more detailed figures can be obtained from the company secretary upon request. So resolution one is to receive and adopt the company's annual reports and accounts for the financial year ended 09/30/2024 together with director's report and the auditors' reports on those accounts. If I could have a show of hands in the room.

2:10 That's unanimous in favor here. None none against. The proxy results was followed. Votes in favor, 100%. 28,016 votes were withheld. I declare the resolution carried in order to resolute of a resolution. Resolution two is to appoint Preston Reeves LLP as the auditors to the company. If I can have a show of hands those against. So it's unanimous in the room. The proxy results are as follows. Votes in favor are 100%. 79,268 votes were withheld. I declared the resolution carried as an ordinary resolution. Resolution number three is that the directors be authorized to determine the auditors' win If I can have a show of hands in the room for those in favor and those against, that's unanimous vote for those in favor. The proxy results was followed.

3:10 Votes in favor is 100%. 1,633 votes were withheld. I declared the resolution carried as an ordinary resolution.

3:21 Resolution number four is that the directors be authorized to allot shares. Further details can be found within the notice of the AGM. If I can have show show of hands in the room, those in favor, those against. It was passed unanimously in in the room. The proxy results are as follows. Votes in favor, 97.51. Votes against, 2.49%. 89,728 votes are being held. I declare the resolution carried as an ordinary resolution. Resolution number five is that the directors be authorized to waive preemptive rights of further details of which can be found from the notice of of the AGM. If I can have a show of hands in the room, those in favor, those against, has passed unanimously in the room. The proxy results was followed. Votes in favor, 97.04%.

4:17 Votes against, 2.96%. 629,767 votes were withheld. I declare the resolution carried as a special resolution. So that concludes the formal business AGM. I'd like to thank everyone in the room for and online for attending and for your continued support. If there's no further questions or comments, I declare that the formal part of the meeting closed. I will hand over now to my friend and our CEO, Bose Bose Sears, who will take this the opportunity to to to to run everyone through an AGM investor presentation. Bo, over to you. Great. Thank you, David. Good afternoon, ladies and gentlemen.

5:03 Bo Sears, CEO of HELIX EXPLORATION. Very happy to be here, and thanks for joining us. Let me just go ahead and start by by, giving a little presentation here of our operations. And I'm excited to answer any questions anybody may have at the end. You know, ask away. So here we go. Alright. So our approach really is quite simple. It's just to build a company and start producing Helium. That's, in essence, exactly what we're here for, and that's exactly what we've done. We have done everything that we have needed to do, in a very timely manner.

5:49 I I think we you'll see, everything that we've done inside of a year has been quite incredible. You know, I'm not gonna spend too much time on this particular slide because I think most people on this, this meeting understand the importance of helium and its growing needs, especially as the semiconductor industry is is, you know, increasing production, especially here in The United States where the CHIPS Act is still alive and well. A lot of production is moving to our shores, so it makes sense to have domestic helium production as opposed to The United States relying on helium from Qatar or Russia or Algeria, where, obviously, geopolitical concerns are quite aggressive. We've been very busy.

6:37 This we have, ever since the IPO inside of one year, we have we have, drilled two holes, the clinic number one and the Darwin number one. Let's see if I can make this bigger so I can see. Is there any way to do that full? There we go. We have done quite well. The image you see here is the is the clink number one well, and then we right after we drilled the the Darwin number one, the Darwin, obviously, is our is our now our marquee project. We had incredible results. For those of you who have not seen the video of the well flowing, it is quite aggressive. With that production, we bought a PSA plant for only $500,000.

7:26 Knew that plant should cost us near $4,000,000. We got a really nice deal on that. We just acquired the wild number one well and the and the the neighboring section of land, 640 acres.

7:39 Really quite excited about that. So we will reenter that well, reperforate the grand interval, and get more, flow. Right now, it's capable of producing 2,000,000 gross feet, gross cubic feet per day. So we are completely funded. We're ready to roll. We have the plant waiting on the membranes, waiting on the compressors, and, we're ready to go.

8:06 So just a quick summary of the Ruddard Field. If you look at the map on the right hand side, you will see three stars. The top right is the Darwin number well. Darwin number one well, that is the well we just drilled. The Weil number one well to the to the west is the well we just acquired, and the Linda number one below the Darwin is the well that we are about to drill pending approval from the Montana Board of Oil and Gas. The zone that we're targeting is is huge. It's nearly, you know, 250 feet. We perforated the entire column at the same time, and we didn't even have to, swab the well to clean it up. It started flowing immediately. That should tell you how pressured the the zone is. So we had the gas analyzed.

8:54 We had 1.1% helium with the balance being principally, nitrogen. So from a processing standpoint, it's quite easy that we don't have to deal with hydrocarbons or any other, you know, in this case, pollutant. So our we're going after helium is a primary constituent as opposed to its traditional recovery as a secondary or tertiary target. The the plant is under construction. We have posted images of that plant on social media. You can see that, and we should be ready to produce helium here very soon. You know, there's hopefully, by the end of summer, if not very early fall. Now that the economics of Redyard are really quite excellent.

9:45 The flows of the well were really just spectacular. When we drilled the well, we actually anticipated that we were gonna be down dip from the wild number one well. We're actually up dip, and that means that the field was much larger than we had really ever anticipated. So that changed the entire previous, reserve report from Jim Weber and Aon Consultants. So with that, we quickly acquired that plant for 500,000 US dollars. We can produce, 48, you know, million cubic feet of gas a year, with a plant that has historically produced helium at five nines purity. We're fully funded, into production. We will have after the the drilling of the of the Linde number one, we'll have three production wells.

10:37 We anticipate drilling, you know, six to eight more wells as we continue to roll with with these wells being put on production. We will be able to grow organically at this point. So, you know, peak sustained cash flow of 15 to $20,000,000 per year. This is a really nice project. Again, we're fully funded, into production. This is the testing this picture here is the testing of the of the Ruddard well. We have completed the acquisition of the wild number one. We we have secured additional leases. We are securing addition even more leases right now. It is in process.

11:24 We'll work on the gathering system, the pipeline to feed the the wells into the plant. We will finish the Zbeck plant and start selling our helium to offtakers.

11:41 The picture here is is our plant. This plant can produce five nines helium. This is this is exactly what our end users need. Anybody that shows up with two trailers for transport away, they need to fill their their trailers with five nines helium or higher. So the objective is to take our three production wells, the Darwin, the Weil, and the soon to be Linden number one, and and deliver that to this, a central location where a membrane unit will be installed. And then after the membrane, this plant and the pitcher will process that helium up to five nines purity, and we'll start helium sales. Going forward, we'll we're able to grow organically. As I just mentioned, we'll get six to eight more wells, possibly even more.

12:35 The wells are very, very inexpensive to drill by virtue of we have a drilling rig in our backyard. So mobilization is oftentimes a a very large portion of the exploration cost. In our case, it's quite small. $1,300,000 well cost. Historically, these wells would cost about 2.3 or $2,400,000. What we're able to grow with cash flow, and we can support company growth. This is just a quick slide of our of of what we've done. We acquired the Roger project in June 2024. That that was a heck of a deal. 250,000, 60% shares, 40% cash.

13:25 We have already proven reserves. We have acquired Zebac plant for $500,000 in cash. New plant costs inclusive of membrane would cost about $5,000,000. And then we just acquired the wild number one well for $303,100,000 in cash. So all systems go on our end. The the acquisition of the wild number one well is actually quite incredible because all we really have to do is turn that well on, and we could start producing. We are gonna go reperforate a larger interval just to see if we can get more gas, but that well has already been drilled. So we effectively paid $300,000 for a well that would normally cost 1,300,000,000.

14:07 And very quickly on the Inglemar Dome, although we've had noncommercial flows out of the of the Charles recently, the Flathead still remains, an incredibly, lucrative target by virtue of its very hot helium and hydrogen. Now, if you just Google natural hydrogen, you will see it's all the rage right now. I'm act in Washington DC, where I spoke at the Department of Energy's ARPA E convention, and natural hydrogen is is a lot of money being thrown into it. Bill Gates' breakthrough ventures invested $90,000,000 with a group called Coloma who has raised upwards of $300,000,000 for per the pursuit of natural hydrogen. Our gas in the flathead has the highest natural hydrogen percentage anywhere in The United States.

14:59 So we have generated a lot of interest. We cannot do anything right now because we are under sage grouse stipulations. So we can go back after the clinic in June fifteenth of of this year and and and perhaps bring in natural hydrogen partners on this project. So we're still very encouraged by Ingemar Dome.

15:24 So right now, I I know everybody is thinking about our share price. And, to that, all I can say is we have done everything, on time, on budget, and we are literally about to be on production. So we're fully funded, I would say undervalued at this point. And but our the sentiment is very encouraging from the folks we have spoken with. They're very encouraged by the prospect of production here in the near term. And that's all I have. Thank you very much for for joining us today. We are very encouraged, I look forward to answering any questions you may have. Okay.

16:12 Thank you, Bo. So we have got some questions which have been pre submitted. We are checking now as well to see if any have come in during the presentation. I would like to hand over to Emily Hall of Camarco, who's going to manage this section of the presentation and ask questions of the management team. Thanks, David. Emily. There are a few questions that were similar, so we have put them together. So first question, presubmitted. When are we due final results from Aon regarding the Southern Dome at Bridgeyard? The Southern Dome, we need to drill a well in there to really understand, the difference between the Northern Dome and the Southern Dome. So the the Southern Dome has not been tested. There has been no deep wells drilled there there. However, the structure is higher on the Southern Dome.

17:08 So I we believe that if if if the the geological conditions are similar, then we should have, equal or better results on the Southern Dome. So we're unable to provide any sort of reservoir estimate until we have hard data. Great. Thank you. How confident are you that each well at Ridyard would achieve the $4,000,000 per year post tax figure more based towards current production wells at Darwin 1 and Wild 1?

17:39 Very confident because, with with Aon's report and the the flow test results, we can determine how long and at what rate we can produce these wells. So right now, with the with the success of the Darwin number one well, the entirety of the Rudyard field, which spans two townships, is is prospective. So they effectively become development wells rather than exploration wells and the difference being the the risk component. We have derisked this project substantially. Great. Thank you. And just staying on the Well One well, how were you able to secure Well One so cheaply despite its proven and high value?

18:26 Well, it's it's that's a good question. And the reason is is because we got control of the entire anticlimb. We farmed it out, and so they were effectively held hostage by that, by that one section. There's no one that was gonna come in there and buy it other than us. Fact of the matter is if somebody else were to come in there and buy that asset, they would have to feed that gas into my our plant. So we were at a we were in a position of tremendous leverage, And it took a little while to get that deal done, but we got it done. It's a great deal. Great. How many wells do you plan to drill at and when? That is, we'll get our our primary concern is getting not concern. Our primary goal is to get these three wells under production first and see what, you know, there's gonna be some some initial testing through these plants and and, you know, turning the right knobs and making sure that we're getting the period that we want. And then once we start our sales process of HELIEM, we will start staking new locations, acquiring more acreage, but the entirety of the of the of the zone or the entirety of the Redyard field is literally open for production. One well will hold 640 acres facing one square mile.

19:51 So one well can drill a a very large area of acreage. Thank you. There are, a couple of questions around the latest update on the membrane construction at Sorry, Emily. Repeat that question one more time. What is the latest update on the membrane construction at Ridgeyard? Okay. Everything is is, is working well. We have, put the the membranes on order, compressors. The plant is virtually done. So once we get all of those pieces aligned, we will, you know, we'll we'll secure the land, we'll build the pad, put the plant on-site, put the building over it, and and build the gathering system to that plant. So I'll we we're everything seems to be on time right now.

20:46 Fantastic. What is the earliest do you think that you might achieve helium production? Soon. Very soon. The target is end of summer. It could be early fall, but it's just dependent on logistics at this point. All the the machinery is there. All the machinery has been has been done on the plant. The long lead item in any of this is the membrane and compression. So but but all systems appear to be, fully fully intact, and we're we we should be ready to roll. Have you got any offtake agreements in place yet? None yet. But that's that's that is our that is our goal to to not enter any enter into any long term contracts yet.

21:40 We wanna test the market and and find the best price for our Helium. And are there any further leases around Bridgeyard that might be for sale? Everything is that that's an unusual question. It's everything is for sale. It's it's not posted anywhere. I guess from a from a sale perspective, all we do is approach the the mineral owners and ask them to lease. That is what we are doing right now. We have acquired some additional leases. We are acquiring more leases right now with the land man on-site now, in fact. If Rudyard continues to grow, we will acquire more leases surrounding the Rudyard Acreage. And just sticking on the m and a theme, once we get cash productive, will you look to invest in fields elsewhere in The US or maybe the world?

22:34 There are certainly some poorly managed licenses in East Africa that will be up for grabs. Yeah. I we we are open to all any and all, review of any other project. It has to make sense for us. We don't want to blindly go into any any area where we think getting into production is going to take decades. That's something that really doesn't have much interest to us. Near term production, especially here in The United States, is a a primary pursuit, but we are not averse to looking elsewhere in the world for HELIAM as long as we can get it into production in a short period of time. So, we have looked at several deals, but, you know, right now, our focus our primary focus is getting what we have into production now.

23:26 Great. Just moving on to some more, of the financial questions. What are your realistic hopes for the share price this year? Higher. I I think it's fair to say that, you know, you're a production company would normally be trading a sort of, you know, four or five times its its annual income. We're currently trading at sort of one and a half times what our planned cash flow will be. So I think there's there's opportunity for a rebate as we move from this development stage into the ex into into into into the production stage. It's impossible to predict what the market says, but as Bo said, higher.

24:16 Yeah. We we we are very encouraged. Again, we have no control over over market conditions. All we have control over is is operations. Yeah. And we are operating, at we're running on also on We're really quite excited. Will there be another placing or fundraise in the foreseeable future? Right now, we are fully funded. So we we don't anticipate any additional raise. The only thing I will say is if if the lender number one well comes in much higher than anticipated, it might require more compression. But, otherwise, we are ready to roll. Great. As the firm doesn't have any debt and will be cash flow generating soon, what is your view on dividends versus buybacks to return cash to shareholders?

25:07 It's something we will consider, obviously. We want to to, we we're doing this for our shareholders. We want our shareholders happy. We're very grateful to the ones who stayed with us and are in it right now. So, we are gonna look at all options with with regards once we start cash flowing and see what makes sense for our company and our shareholders. Yeah. It's a balance between reinvesting in the company for growth and distributing capital back to shareholders. So I think we'd be in a we're in a incredibly fortunate position that, you know, within eighteen months from listing the the company, we will be a cash generating company. And it's certainly a a problem that we like to have is what to do with the money that we're making rather than so many other companies that I'm who are sort of struggling to keep the lights on.

25:57 It's a it's a problem that we want to have. One shareholder has asked, can I visit RIDJARD? Come on. Bring bring a fly rod. Absolutely. And then finally, I think this is a question from someone in the room, but how is HELIX EXPLORATION thinking about innovation in its operations and strategic growth? And what role does the company see for fresh perspectives in addressing industry challenges? That's a good question. So, interestingly, again, I mentioned I'm in Washington DC right now. Had I spoke at the ARPA E convention, the Department of Energy's ARPA E, Advanced Research Projects Agency Energy.

26:44 And there was a lot of discussion about membrane technology and how membranes can can accelerate helium exploration and accelerate, you know, more effective and cost effective methods of of processing helium. So we're excited about the prospects of of the challenging aspects of of processing the gas. Of course, you know, expiration is expiration, but we're certainly have our ear to the rail with regards to saving dollars on any processing costs. Great. I think that was all the questions that we have at the moment. So Uh-huh. Well, in that case, I'd like to thank everybody for attending. I'd like to thank Beau for the presentation.

27:34 I will call the meeting to a close. And, yeah, if there's any other feedback or questions to the company, please feel free to contact us. We are active on social media. We have our our our website, and we respond to emails. So please feel feel free to reach out for additional information if you feel we haven't quite answered any of your questions. Thank you for your support over the last twelve months since our IPO. We look forward to an incredibly active and and and in an innovative 2025 as we move from our exploration stage into into our production stage. And we look forward to meeting you all again at our AGM in 2026, and thank you for your time.

28:21 Thank you. Perfect, guys. That's great. And thank you all for updating attendees online this afternoon. Could I please ask attendees online not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order the management team can really better understand your views and expectations? This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the board of HELIX EXPLORATION PLC, we would like to thank you for attending today's annual general meeting. That now concludes today's session. So good afternoon to you all.