Resource World Magazine

64 www.resourceworld.com A U G U S T / S E P T E M B E R 2 0 1 8 Oil Patch Report by Bruce Lantz F our-year-old First Helium has com- pleted initial testing of a wellsite at an undisclosed Alberta location and, based on those results and the oppor- tunities presented by a surrounding field of sites, is preparing for a share offering likely no later than January 2019. "The path to significant profitable cash flow has been laid out," said First Helium founder, President and CEO Vance Loeber. "We've got everything in place; we've got it all." Loeber, who has an extensive back- ground in mining and "proving up what could be," first got his idea on a trip to Calgary on a mining deal, when a discus- sion with an oil and gas analyst raised the concept of developing helium properties in South Saskatchewan. Why helium? As Loeber explains it, helium found in shut-in, natural gas wells is a rare high-value commodity available from marginal wells where helium can be derived from waste gas at a rate of 0.5% to 2%. Prices currently range from $100- $600 per thousand cubic feet (MCF) and the product is vital to end users such as Samsung, who are paying up to $1,000/ MCF for helium which is used in the manu- facture of television sets, for example. In addition, the natural gas retrieved can be sold at present for about $2.60/MCF. Helium is the second most abundant element in nature, but it's very rare in con- centration and is a non-renewable resource with few substitutes. It's highly valued by high-tech industries because it's the second lightest gas and has the lowest den- sity, the second lowest melting and boiling points, features ultra-high thermal conduc- tivity and is considered a superfluid that is frictionless, inert and completely non-reac- tive. Its prime uses are for super-cooling and cryogenics such as MRI machines, pure atmospheres useful in manufactur- ing silicon wafers, arc welding, airships, as well as leak detection and lifting – plus the frivolous use in party balloons. And demand is strong, sitting at about 6 billion cubic feet per year. Global growth is projected at 6.5% through 2021, with the US facing a shortfall and the need to import supply, currently from politically unstable countries, while Canada is sitting on the fifth-largest prospective resource, at about 70 billion cubic feet. With all that in mind, and a plan to develop a field to capture, produce and market helium, natural gas and conden- sate, Loeber lured reps from a Texas firm up to Canada and spent "the better part of a year of my life" on the project, but before it was taken public, the Linde Group of Germany offered private funding for the project and the others took it. Undaunted, he tried to raise up to $400,000 and admits that was "a failure at first", but then the Petrel Robertson group contacted him to get in on the opportunity, and Quantum Technology was brought on board soon after and the vertically integrated com- pany took shape, with an initial $1 million investment and another million from "friends and family" including Petrel Robertson, senior management along with engineers and geologists. They spent two years analyzing thou- sands of low-risk wells in the entire Western Canadian Sedimentary Basin. The results significantly exceeded expec- tations. In short order, 200 shut-in gas wells containing 1% helium or better were identified, one test well was explored this spring, and eight more were placed on a shortlist for future development. Loeber said the test well and the soon-to-be-devel- oped field is in Alberta but he would not reveal the specific locations of them. At present, the company has "zero employ- ees," Loeber said, although 30-50 have worked on the project at different times. "We're trying to build a company but we don't want a machine that's sucking money," he explained, noting that only senior management receives modest com- pensation while the partner companies are paid for specific performance. "I don't want a high burn rate before I get out of the chute." While he acknowledged that employ- ees will be hired as the company grows and more projects get underway, Loeber said "we're not there yet," adding that it's important always to run as "lean and mean" as possible. First Helium testing western Canadian wells for helium A Vancouver-based company is ready to go public to expand plans to develop its product – helium.

• Cover