Is This The Best Way To Play The Coming Helium Boom? / Commodities / Investing 2021
Major commodity shortages all over the globe arewreaking havoc in the markets...and driving up prices of goods for consumers.
Most recently, a widespread shortage in the lumbermarket has generated a great deal of attention due to the impact this shortageis having on the price of home renovations and new home construction.
A global shortage of microchips is having a dramaticimpact on the electronics market as well as new car manufacturing.
And additional shortages in agricultural products,building materials and cleaning products are also driving up prices and causingworry all over the globe.
But a looming, potentially unavoidable shortage in oneof the world’s most valuable commodities could soon trigger themost critical supply squeeze of our lifetime.
This commodity -- which is absolutelyindispensable to a number of critical applications, including hard drives,fiber optic cables, semiconductor chips, superconductors, medical research,space exploration and more – is helium.
That’s right – helium.
What is often thought of only as part of a child’sbirthday balloon is actually one of the world’s most critical – andirreplaceable – commodities.
And right now, we’re on the verge of a critical shortage.
Making matters worse is that, thanks to a combinationof factors, there have been virtually no companies exploring for new sources ofhelium until very recently.
But one company – Avanti Energy Inc. (TSX:AVN.V; US OTC:ARGYF) –has a technical team that previously made one of the most significant naturalgas discoveries in the world, the Montney. This skill set will be crucial for unlocking a similarsignificant discovery for helium in North America.
With a premier portfolio of prospective heliumproperties – and a successful oil and gas exploration team in place – Avanti Energy (TSX:AVN.V; US OTC:ARGYF) appearsto be positioned perfectly to offer significant upside potential as heliumprices continue to rise.
And a significant rise in helium prices is just whatthe experts are now predicting…
Canaccord: “Demand is poised to grow for theforeseeable future...leading to a significant price increase.”
While it’s true that helium is the second most abundant element inthe universe…it’s extremely rare on earth.
Most of the helium produced on earth is mined in natural gasformations.
The world’ssingle largest source of helium for the past 70 years has been the U.S. FederalHelium Reserve (FHR) in Amarillo, Texas.
But withinthe past few years, the FHR stockpile has been depleted, leading to a surge inhelium prices as explorers scramble to find new sources of helium.
According to the experts at Canaccord Genuity, “Thehelium market has been thrown into a state of flux with a major supplysource being removed from the market. At the same time, we believe demandis poised to grow for the foreseeable future.”
Canaccord continued, “ With near-term replacement options limited,a supply gap is emerging, leading to a significant price increase.”
Just How Critical is Helium?
Whilehelium is most commonly thought of as being used for the inflation of balloons,the truth is helium is used in a number of critical parts of daily life.
* Medical Industry – Helium is usedto operate MRI machines and as part of respiratory treatments.
* Cryogenics – Helium is the onlyelement that can come close to reaching absolute zero.
* Internet Connectivity – Fiberoptic cables must be manufactured in a pure helium environment.
* Electronics – Many electronics andsemiconductors – including mobile phones – require helium to be used at variousstages of the production process.
* Computers – Helium-filled harddrives offer 50% higher storage capacity with 23% lower operating power.
* Car Air Bags – Helium is the gasof choice for effecting the near instantaneous deployment of air bags in cars.
Helium is used by companies like Amazon, Google andNetflix to help cool their data centers. And the Canadian government recentlyadded helium to its critical minerals list.
So clearly, helium is a commodity that is absolutely essential intoday’s world.
But with the largest single source of helium in the worlddiminishing– and a lack of exploration activity over the past several years toreplenish our supply…
There seems to be no question that (1) helium prices are poised tocontinue climbing higher…and (2) any company that can help expedite bringingnew helium supplies to market figures to be handsomely rewarded.
That’s why Avanti Energy Inc. (TSX:AVN.V; US OTC:ARGYF) rightnow appears to be such an attractive potential investment.
AvantiEnergy’s Team of Successful Oil & Gas Executives Now Seeking New Discoveriesof Helium Reserves
Avanti’s management team is made up of a group of highly successful former oil and gasexecutives, including four former employees of Encana Corp.
Avanti CEO Chris Bakker has over two decades of experience in oil and gas, mostrecently working as a commercial negotiator with Encana/Ovintiv for majorfacilities and pipelines in the Montney gas play.
His expertise includes all facets ofNatural Gas Exploration like land acquisition, exploration, drilling, wellproduction and facility integration and construction.
VicePresident Genga Nadaraju has over two decades of experience in the oil & gas industry…Director Dr. Jim Wood has over 30 yearsof experience as a geologist specializing in reservoir characterization…VP Ali Esmail has spent the past 13years specializing in reservoir engineering and prior experience as afacilities and process engineer totaling 20+ years. Senior Geophysicist Richard Balon has over 30 years of experiencein the Western Canadian Sedimentary Basin.
This is an experienced team with an impressive track record ofsuccess in the oil and gas industry.
And now they seek to do it again.
Thisvery same successful team is now using the same methodology at Avanti Energy (TSX:AVN.V; US OTC:ARGYF) to explore for what it hopes will prove to be some of therichest helium deposits in the world.
Helium is found by drilling wells, similar to natural gas. It isformed from radioactive decay of heavy elements like Uranium and Thorium.
Helium can be trapped under hard, non-porous rock where it cannotescape.
AvantiEnergy’s focus is on helium-bearing non-hydrocarbon sources in WesternCanada and Montana.
Avanti’s team is using an approach and methodology similar to that whichthey successfully used to identify and assess the Montney Formation.
And the company has quickly assembled an impressive portfolio ofproperties that it hopes will put it on track to become the next major playerin new helium discoveries.
AvantiEnergy’s Impressive Portfolio of Highly Prospective Helium Properties
One of the things that has investors and analysts alike sointrigued with Avanti Energy’s potential is the company’s growing portfolio of prospective helium properties.
This new Montana acquisition includes two properties – one largeblock (~46,000 acres) and one smaller block (~4,000 acres).
Area heliumshows are associated with favorably high nitrogen percentages of up to 96%.
This property in Montana adds to the company’s existing portfolioof properties in Alberta.
Avanti Energy (TSX:AVN.V; US OTC:ARGYF) already hadapproximately 9,500 acres north of the Alberta/Montana border.
This project – known as the Knappen project – is one of the company’s strategic targeted areas with nitrogen-richhelium in multiple zones. In addition, the presence of several deep structuralhigh features in the area is ideal for trapping helium.
A previously abandoned natural gas well on the property showed2.18% helium and 96% nitrogen in the Cambrian and 0.3% helium and up to 98%nitrogen in the Devonian.
The Knappen project resides in an area with confirmed reservoirrock and multiple DST’s with analyzed gas, and the potential for viable heliumreserves over a larger basement structure.
This project – the Aden project – resides in an area with a closed structural high that is ideal fortrapping helium and multiple helium shows, of up to 2%, have been identified inand around the property.
Taken all together, this portfolio of properties represents asignificant land base that should allow for a potentially lucrative multi-welldrilling program upon exploration success.
Bottom Line: Avanti Energy Inc. (TSX:AVN.V; US OTC:ARGYF) Appears to Be the Best Way to Play the Coming SupplyCrunch for this Valuable Commodity
One of the world’s most important – and most irreplaceable –commodities is now on the verge of a potentially historic supply crunch…
Yet most investors have never heard about the coming shortage.
With the global helium market projected to continue growing at aCAGR of 11% -- reaching $18.1 billion by 2025 – there is significantopportunity in this space for those investors who know where to look.
The company that appears to offer the best way to play this coming“helium crunch” is Avanti Energy Inc. (TSX:AVN.V; US OTC:ARGYF) ).
The company is led by a team of oil and gas executives with ahistory of success in the exploration space, including the discovery of the Montney Formation, one of the premiernatural gas formations in North America.With an experienced team in place – and a roadmap for explorationsuccess in place – the company has set about acquiring a portfolio of helium assetsfor exploration.The company’s Alberta-based assets – the Knappen and Aden projects– each appear to offer significant exploration upside, with the Aden projectmoving forward with a goal of drilling exploration wells by the end of theyear.And the company recently added an impressive pair of newproperties – totaling approximately 50,000 acres of land – in Montana. Thispackage has multiple closed structural highs and very promising local analoguewell results.This portfolio of properties gives the company potential heliumdiscoveries on both sides of the border and a significant early advantage inthe race to bring new helium discoveries to market as prices continue to soar.By: Jean Rivere
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FORWARDLOOKING STATEMENTS. Thispublication contains forward-looking information which is subject to a varietyof risks and uncertainties and other factors that could cause actual events orresults to differ from those projected in the forward-looking statements.Forward looking statements in this publication include that prices for heliumwill significantly increase due to global demand and use in a wide array ofindustries (including key technology sectors) and that helium will retain itsvalue in future due to the demand increases and overall shortage of supply;that Avanti can pursue exploration of the recently acquired licenses ofproperty in Alberta; that Avanti’s licenses in respect of the Alberta propertycan achieve drilling and mining success for helium; that Avanti will be able toacquire the rights to helium on the 12,000 acres of land in Montana pursuant toits recent letter of intent announced on April 16, 2021, and the helium rightsto the ~50,000 acres of land in Montana pursuant to its recent letter of intentannounced on June 14, 2021; that the Avanti team will be able to close on theaforementioned Montana helium license acquisitions; that the Avanti team willbe able to develop and implement helium exploration models, including their ownproprietary models, that may result in successful exploration and developmentefforts; that historical geological information and estimations will prove tobe accurate or at least very indicative of helium; that high helium contenttargets exist in the Alberta and both Montana projects; and that Avanti will beable to carry out its business plans, including timing for drilling andexploration. These forward-looking statements are subject to a variety of risksand uncertainties and other factors that could cause actual events or resultsto differ materially from those projected in the forward-lookinginformation. Risks that could change or prevent these statements fromcoming to fruition include that demand for helium is not as great as expected;that alternative commodities or compounds are used in applications whichcurrently use helium, thus reducing the need for helium in the future; that theCompany may not fulfill the requirements under its Alberta licenses for variousreasons or otherwise cannot pursue exploration on the project as planned or atall; that the Company may not be able to acquire the helium rights to theMontana lands as contemplated in the letter of intent or at all; that theAvanti team may be unable to develop any helium exploration models, includingproprietary models, which allow successful exploration efforts on any of theCompany’s current or future projects; that Avanti may not be able to financeits intended drilling programs to explore for helium or may otherwise not raisesufficient funds to carry out its business plans; that geologicalinterpretations and technological results based on current data may change withmore detailed information, analysis or testing; and that despite promise, theremay be no commercially viable helium or other resources on any of Avanti’sproperties. The forward-looking information contained herein is given as of thedate hereof and we assume no responsibility to update or revise suchinformation to reflect new events or circumstances, except as required by law.
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