On recent testing, Imperial Helium Corp.'s (IHC:TSX.V; IMPHF:OTCQB) IHC-Steveville-3 well performed strongly, and this result boosts the expected overall flow rate from both of the company's wells, reported Auctus Advisors analyst Stephane Foucaud in a March 25 research note.
The new estimated flow rate is 10,000,000–15,000,000 cubic feet per day (10–15 MMcf/d), having increased from 10 MMcf/d. This range reflects flow specifically from IHC-Steveville-2's blowout zone and IHC-Steveville-3's blowout zone and subsalt zone.
"Were Imperial to add a third producing well to its portfolio, Auctus would increase the helium company's share price to about CA$0.85."
Two factors could positively change this rate, Foucaud noted. One is a good flow test results from IHC-Steveville-2's subsalt zone. The other is stimulating this same well's blowout zone with acid "to reduce the skin factor."
The analyst relayed the recent test results from IHC-Steveville-3. During cleanup at sustained pressure, the well's blowout zone horizon flowed at a rate of 5–8 MMcf/d. This suggests this zone horizon could flow at this rate, without declining, for three years.
Also of note, Foucaud pointed out, the composition of the gas encountered at both IHC-Steveville-3 and IHC-Steveville-2's blowout zone horizons is similar, indicating the reservoir is communicating between both. Imperial is conducting an interference test to determine if this is in fact the case. If it is, this could "have important positive implications for the resources volume," Foucaud wrote.
Next for Imperial, Foucaud indicated, it will obtain the results of the in-progress interference test between its two wells and plans to pursue an independent resources report. Also, with respect to IHC-Steveville-2, the company intends to test its subsalt zone and acid stimulate its blowout zone horizon.
Auctus Advisors has a CA$0.80 per share target price on Imperial, the current share price of which is around CA$0.23. Were Imperial to add a third producing well to its portfolio, Foucaud wrote, Auctus would increase the helium company's share price to about CA$0.85.
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Imperial Helium Corp. Click here for important disclosures about sponsor fees.
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Disclosures for Auctus Advisors LLP, Imperial Helium Corp., March 25, 2022.
Imperial Helium Corp. (“Imperial” or the “Company”) is a corporate client of Auctus Advisors LLP (“Auctus”).
Auctus receives, and has received in the past 12 months, compensation for providing corporate broking and/or investment banking services to the Company, including the publication and dissemination of marketing material from time to time.
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Author: The research analyst who prepared this research report was Stephane Foucaud, a partner of Auctus.
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