Quantum Helium has announced that it has very much completed its planning for a propped fracture stimulation at Sagebrush-1. Management is now in the process of finalising the logistics and expected to start the fracking in November. This is now expected to allowed a sustained flow of helium bearing gas. This should be the next step in the move to getting a commercial development.
We derive a valuation for Quantum of 6.4p/share which is derived from a RENAV (Risked Exploration Net Asset Value) using a conservative helium price US$500/mcf. Although there are now some risks with the lack of sustained flows in the Upper Leadville formation, there is no value in our target price for potential upside in the lower Leadville and from the oil discovered in the Sagebrush-1 EPT. We will review this again once the frack has been completed.
Full note here
