6th Nov 2024 16:51
(Alliance News) - Mendell Helium PLC on Wednesday said that M3 Helium Corp, which it has an option to acquire, has signed an exclusive farm-in and fixed price helium agreement with Scout Energy Partners.
Mendell Helium is a Perth, Scotland-based company switching to helium production from health and wellness products.
In June, Mendell announced that it had an option to acquire M3 Helium, which is based in Kansas and holds an interest in six wells. There is no certainty that the option to acquire M3 Helium will be exercised, nor that the enlarged group will successfully complete its re-admission to trading on the AQSE Growth Market.
The agreement is for over 161,280 acres of the Hugoton gas field, one of the largest natural gas fields in North America.
M3 Helium is entitled to nominate drilling locations of its choice subject only to maintaining a distance of 1,500 feet from any existing well operated by Scout Energy. This includes a minimum of 25 new wells, though M3 Helium estimates there could be a 100 to 200 well opportunity at the site.
All production will be delivered to Scout Energy's gathering system, and the Jayhawk processing facility.
M3 Helium has no obligation to make any payment to Scout Energy until the first well is commenced, which must be by March 31 next year. At that time, a one-off fee of USD1 million is due.
Should M3 Helium decide not to proceed with the farm in agreement, then it has no financial liability to Scout.
Shares in Mendell Helium last traded at 3.75 pence on Aquis in London on Wednesday afternoon.
By Holly Beveridge, Alliance News senior reporter
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