Helium development and exploration company First Helium has agreed to sell 80% of its produced helium volumes from its Worsley Property in Alberta, Canada, to a major industrial gas supplier.
The long-term helium supply agreement signed by the two companies is worth up to $100m in potential revenue to First Helium over the first five years, depending on the pace of production.
First Helium will receive firm specified pricing for its helium volumes throughout the first five years, after which the agreement provides for price re-determination windows as triggered by either First Helium or the purchaser. A total term of 10 years has been agreed.
The purchaser will be obligated to take, or pay for, all helium volumes delivered, or made available for delivery by First Helium during the term of the agreement, subject to maximum monthly and annual volume quantities.
Ed Bereznicki, President and CEO of First Helium, said, “The take-or-pay and term nature of our sales arrangement, combined with the flexibility to sell up to 20% of our production on a potentially more lucrative ‘spot’ sales basis, will enable us to maximise the value of our helium asset for our investors.”
Bereznicki also notes that the finalisation of the deal will allow the company to proceed with the next steps in bringing its 15-25 helium well into production.
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The deal is subject to maximum monthly and annual volume quantities, in accordance with a specified per unit volume pricing schedule.
In addition to announcing its signed helium supply deal, First Helium has also completed the necessary front end engineering design (FEED) study for its Worsley helium gas processing facility.
The company will now work to finalise production details and proceed with the equipment procurement process. First Helium is currently targeting late Q1 2024 for initial helium production and delivery at the Worsley plant.