Investor Insight

First Helium’s scalable development strategy, differentiated by a multi-commodity approach and supported by a well-defined project roadmap, positions it as a potential leader in helium production within North America.

Overview

First Helium (TSXV:HELI,OTCQB:FHELF,FRA:2MC) is a Canadian company focusing on exploring and developing helium resources in Alberta, Canada. The company’s primary asset is the Worsley project, which spans 53,000 acres and includes both helium-enriched natural gas, oil and other natural resources. First Helium has made significant progress with multiple discoveries, including a helium discovery well and successful oil wells. The company aims to grow its production and cash flow through ongoing exploration and drilling activities.

First Helium is poised for substantial growth in the coming years, with the scalability of the Worsley project providing a path to significant increases in production and revenue. The company has set ambitious financial goals, targeting over $100 million in annual revenue within the next three to five years. Based on current projections, vertical drilling alone could generate over $100 million in annual revenue, with cash flow estimated to reach $70 million annually.

Helium, a critical and scarce resource, is indispensable in various high-tech industries, including semiconductor manufacturing, artificial intelligence, space exploration, defense and healthcare. Helium’s demand is projected to grow 300 percent by 2030, driven by its irreplaceable role in industries that require precision, cooling and inert properties. Major companies like Google, Amazon, SpaceX, NVIDIA and Intel rely on helium for their operations. The global helium market, valued at $3.94 billion in 2021, is expected to grow to $13.26 billion by 2030.

However, the supply of helium is under pressure due to geopolitical uncertainties and production limitations from major global suppliers, including Qatar, Algeria and Russia. Additionally, the US, currently the largest producer of helium, is expected to become a net importer within the next three to five years. This shift opens significant opportunities for Canada, which is the fifth-largest global resource of helium but contributes less than 2 percent of the world’s annual production. The Canadian government has also classified helium as a critical mineral, underscoring its strategic importance in the transition to a sustainable future.

This global dynamic is creating opportunities for helium explorers such as First Helium to leverage a growing market. Led by an experienced management and technical team with successful track records in the oil and gas, mining and energy sectors, First Helium is well-placed for significant growth.

First Helium’s long-term vision is to establish a regional helium-enriched natural gas and oil play in Alberta, with the Worsley project serving as a template for future developments. The company is actively evaluating potential partnerships and acquisition opportunities to accelerate the development of its assets and capitalize on the growing demand for helium across North America and globally.

Company Highlights

• Helium is a critical mineral with steady growth in demand. Major companies like Google, Amazon, SpaceX, Samsung, NVIDIA and Intel rely on it.
• Helium prices have increased by over 50 percent in the last three years and the market is expected to grow 300 percent by 2030.
• First Helium offers exposure to helium, natural gas and oil revenue streams, which diversifies risk and increases value.

Key Project

Worsley Helium Project

The company’s 100 percent owned flagship Worsley project, spans 53,000 acres (approximately 83 square miles) in a multi-commodity region of Alberta. The project is located in a historically productive area that has yielded over 315 billion cubic feet (Bcf) of natural gas and 17 million barrels of oil. The Worsley project is distinguished by its significant helium resources and multi-zone drilling potential for helium, natural gas and oil. Worsley area has produced over 1 Bcf of helium, which was not recovered in previous natural gas operations, highlighting the untapped potential of the region for helium extraction. In particular, the deeper Leduc formation to the eastern part of the land base remains largely unexplored due to higher nitrogen concentrations in the natural gas resource, which made the product unacceptable to the local gas pipeline transportation company, and discouraged further drilling by historic natural gas companies. This spells tremendous exploration opportunity for First Helium, as today’s helium processing equipment can separate helium, natural gas and nitrogen, resulting in marketable helium and natural gas.

First Helium’s vertical helium discovery well, 15-25, is ready to be brought into production and is expected to provide a steady stream of helium and natural gas supply. Additionally, the company has identified 12 follow-up vertical drilling targets, and a large structural opportunity based on proprietary 3D seismic data, which positions the project for significant scalability.

First Helium has secured a 10-year ‘take-or-pay’ helium offtake agreement with a major global industrial gas supply company, which would support robust and predictable cash flow. The agreement covers up to 80 percent of helium production from the Worsley project’s 15-25 well, with the potential to purchase 100 percent of production depending on the pace of growth. The agreement also provides First Helium with flexibility, allowing the company to market up to 20 percent of helium production on a potentially more lucrative “spot” sales or merchant liquefaction basis.

The Worsley project area benefits from an existing natural gas gathering infrastructure, expediting the timeline to bring helium to market. First Helium expects the first production to begin in the fourth quarter of 2025, positioning it to become a key supplier in the growing North American helium market.

Worsley project indicative economics

The resource base of the Worsley project is significant. The project comprises one proven, undeveloped oil location with reserves of approximately 200,000 barrels of oil (as verified by third-party reserve engineers) and one natural gas/helium well. The unrisked, best estimate of contingent resources for this well includes just under 13 Bcf of natural gas and over 300 million cubic feet (MMcf) of helium. These reserves provide a stable foundation for the company’s growth, with the natural gas/helium production offering substantial economic upside due to the high-value nature of helium. Helium prices have increased by more than 50 percent over the past three years, with global import prices rising from approximately $US 310 per thousand cubic feet (Mcf) in January 2020 to over $US 476 per Mcf by November 2023. This price growth, combined with helium’s critical applications, underpins the strong economics of First Helium’s Worsley project.

The company’s operations focus on two key formations within the Worsley project area. The Leduc formation, known for its helium-enriched natural gas and light oil, offers substantial production potential. The Blue Ridge formation is another high-margin, helium-enriched premium natural gas play that adds further value. The company has drilled three wells in the area, achieving 100 percent drilling success on two oil wells, which have collectively generated approximately $13 million in revenue. These results highlight the resource-rich nature of the Worsley project and demonstrate First Helium’s capability to deliver consistent drilling success and revenue generation. The third well, drilled horizontally into the Blue Ridge formation, was cased, and is ready for completion and testing. If successful, it will establish a regional, repeatable, helium-enriched natural gas play.

The company has identified 12 highly prospective locations for additional drilling in the Leduc formation, and the successful testing of its horizontal well (5-27) is expected to add over 30 follow-up horizontal drill locations in the Blue Ridge formation at West Worsley, further enhancing the scale of the project.

After receipt of regulatory licensing approvals in late 2024 and early 2025, First Helium has begun drilling its proven undeveloped (PUD) 7-30 oil location at the Worsley property. Following drilling of the 7-30 vertical well, the contractor’s drilling rig will move directly to the 7-15 location to begin drilling in early February, barring any unforeseen delays.

Processing plant

In conjunction with proving up additional helium resource, the company is also exploring financing options for the construction of a helium processing plant, which would further enhance its production capabilities. The completion of this facility is expected to generate $3 to $5 million in annual project-level cash flow from the single 15-25 well alone, setting the stage for future growth and expansion.

Management Team

Ed Bereznicki – President, CEO and Director

Ed Bereznicki is a highly experienced energy sector executive with more than 25 years in corporate finance, capital markets, and M&A, focusing particularly on oil and gas exploration and production. He spent 15 years as a senior investment banker with firms such as Raymond James and GMP Securities, where he raised over $20 billion in equity and convertible debt for energy sector projects. His leadership roles extend to start-up energy ventures, where he has guided companies through IPOs, mergers and acquisitions. He has also handled risk management, pipeline operations, and international projects, making him an expert in leading large-scale energy and natural resource companies. His broad experience across financial and operational domains has contributed significantly to his ability to manage complex corporate growth initiatives in the helium sector.

Robert J. Scott – CFO and Director

Robert Scott is a chartered professional accountant and a chartered financial analyst with over 20 years of professional experience in financial management, corporate compliance, and strategic business planning. He has held senior management and board positions at multiple TSX-V listed companies, where he was instrumental in raising more than $200 million in equity capital for growth-stage companies. His extensive expertise covers IPOs, reverse takeovers, mergers and corporate restructuring. In addition to corporate finance, he has in-depth experience in merchant and commercial banking, which has bolstered his capability to guide companies through complex financial environments, especially in the natural resource sector.

Shaun Wyzykoski – Vice-president, Engineering

Shaun Wyzykoski brings 25 years of experience in the Canadian oil and gas industry, specializing in engineering, operations, acquisitions, and divestitures. He has held senior roles at several major energy companies, including chief operating officer of Orlen Upstream Canada, and senior engineering positions at Fairmount Energy and TriOil Resources. He was also part of the founding engineering group at Crescent Point Energy, one of Canada’s leading oil and gas producers. Wyzykoski’s expertise includes designing and executing complex operational strategies to leading acquisition efforts and integrating new technologies into exploration and production activities. His deep operational knowledge helps him drive efficiency and innovation at First Helium.

Marc Junghans – Geology and Asset Development Advisor

Marc Junghans is a seasoned geologist with more than 40 years of experience in the oil and gas sector, focusing on the Western Canadian Sedimentary Basin and U.S. markets. He co-founded and successfully sold two private-equity-backed junior oil and gas companies, where he served as vice-president of exploration. At Compton Petroleum, he helped grow production from 2,500 barrels of oil equivalent per day (boed) to 34,000 boed, leading exploration efforts that significantly enhanced the company’s value. He has held senior geological positions at major firms such as Husky Oil, Anderson Exploration, Canterra Energy, and Tundra Oil & Gas. Junghans has drilled over 170 horizontal wells across Alberta, Saskatchewan and Manitoba, bringing invaluable technical expertise to First Helium’s asset development strategy.