The stuff used to blow up party balloons is becoming a hotly sought after resource in Saskatchewan.
Interest in helium wells has ballooned. Four years ago Virginia-based Weil Resources built a helium extraction plant near Mankota.
The $12 million plant can process an annual 10 million cubic feet of the 99.999 per cent pure element — that's about $280 million US$ in value at 2018 prices.
North American Helium of Calgary announced plans this year for a $38 million helium plan in the Consul area near the American border. Production start is scheduled for 2021 with revenues to finance further drilling on hundreds of thousands of acres of pasture.
Royal Helium of Saskatoon has leases in 30 districts of southern Saskatchewan approaching 500,000 acres with application eyes on another 300,000 acres.
Royal Helium believes it has one trillion cubic feet, possibly two trillion cubic feet, of the gaseous element under company leases. Helium grade ranges from .42 per cent at Climax to 2.35 per cent at Ogema and 2.56 per cent around Griffin, south of Weyburn.
Company leases around the area include Val Marie, Coronach and Bengough.
Once reserves are proven, the company plans a processing plant to purify the helium, produce carbon dioxide for the petroleum well injection/production and ammonia/urea fertilizer.
The company embarked on a major drilling program at the Climax property this summer.
Company management includes several members of the 49 North Company, a public company with mineral and petroleum equity interests worth $39.3 million.
Royal Helium, trading at 33 cents a share, has moved from a low of two cents in the past year with a high price of 58 cents.
Interest in Saskatchewan helium has three sparks. In 2016 the Saskatchewan Ministry of the Economy commissioned a study on the element.
The study indicated helium existence has been known since the 1950s as an element present in some petroleum wells. The study outlined potential in southern Saskatchewan.
Another spark comes from rapid worldwide decline in reserves and the swift sell-off since 2106 of massive government helium stockpiles in the United States.
Prices reacted to declining reserves by increasing from $84 US a thousand cubic feet in 2012 to $119 in 2017 and $280 in 2017
Even though the traditional use of helium to blow up party balloons is falling off, the need for helium by the growing computer chip industry, quantum computers and MRI imaging offers steady growth in demand.
Canada has an estimated one-fifth of global helium reserves with most of that in Saskatchewan.
Helium appears to be a growth industry for this province. The province has not required detailed environmental impact assessments since the extraction and production process is so similar to the already approved natural gas and oil industry.
Royal Helium is a candidate for investors’ stockwatch lists. Weil Resources and North American Helium are private companies.
CAUTION: Remember when investing, consult your adviser and do your homework before buying any security. Bizworld does not recommend investments.
Ron Walter can be reached at ronjoy@sasktel.net
The views and opinions expressed in this article are those of the author, and do not necessarily reflect the position of this publication.
