Helium Evolution

Overview

Home to the largest helium purification facility in Canada and one of the most highly concentrated helium resources in the world, the province of Saskatchewan is an emerging jurisdiction for helium exploration and production. With its proximity to the US, one of the world’s largest helium consumers, the province is accelerating the development of its helium sector.

Through the Helium Action Plan, launched in 2021, the Saskatchewan government aims to improve its competitiveness and increase investments across the helium value chain: from exploration and production to innovation, processing and exports.

Helium Evolution Incorporated (TSXV:HEVI) is a Canadian helium exploration and production company focused on developing its helium assets in southern Saskatchewan. It’s leveraging Saskatchewan’s value proposition as a ‘green’ alternative to harvesting helium as a byproduct of natural gas. HEVI owns land rights to approximately 5.6 million acres, representing the largest land package in Canada controlled by a public entity.

HEVI’s land package is located in a helium-rich area and in close proximity to the US market, which is among the largest helium consumers in the world.

HEVI selected southern Saskatchewan for a variety of reasons. First, the decaying uranium in the area’s basement rocks has produced significant helium reserves throughout southern Saskatchewan. Second, Helium Evolution’s target geological formation, known as “The Deadwood”, contains up to 2 percent proven helium content alongside 95+ percent nitrogen content. Existing geophysical data is readily available and will help Helium Evolution select the best drill targets.

Why does this matter? The presence of nitrogen as the carrier gas allows Helium Evolution to vent the gas in an environmentally friendly manner while also providing cost advantages during the helium extraction and liquefaction processes. Additionally, drilling for helium is similar to extracting conventional natural gas, meaning there’s no need for specialized equipment, and management’s existing oil and gas development expertise can be leveraged. Low-cost vertical drilling is all that’s required for HEVI to begin extraction.

HEVI’s unique competitive advantage comes in the form of a farm-out agreement with and a $3.5-million equity investment by North American Helium (NAH). The farm-out deal enables NAH to drill five development wells on HEVI land, with an option for two additional wells, offering HEVI near-term drilling catalysts that can accelerate cash flow generation without incurring up-front capital costs, all while retaining 99 percent of its land base.

The agreement also provides HEVI, at no cost, NAH’s proprietary seismic recently used to drill three successful and producing NAH wells in the Mankota area, giving HEVI greater insight and valuable data that can be used in identifying future targets.

HEVI’s landholding is adjacent to NAH’s discovery of two helium pools at Mankota and Cadillac. The Mankota Pool is a nitrogen-rich reserve with helium concentrations of 0.94 percent to 1.08 percent.

HEVI land is adjacent to NAH’s Cadillac and Mankota Discoveries

HEVI is led by an impressive management team with a combined 150 years of resource development experience, including engineering, geological and executive management across the corporate landscape. CEO Greg Robb boasts 35 years of direct experience in Western Canada, where he focused on the acquisition and development of natural resources in the region. Patrick Mills, COO, brings over three decades of executive, managerial and engineering experience in Western Canada. Kristi Kunec, CFO, brings over 15 years of financial experience to HEVI, with a proven track record that includes leading the corporate finance, organizational planning and financial reporting functions for growing resource companies. Furthermore, vice-president John Kanderka has 40 years of directly applicable experience in the energy and mineral sectors, serving as an officer in both public and private entities. The management team is complemented by a strong board of directors, including the former premier of Saskatchewan, Brad Wall.

Company Highlights

Helium Evolution Incorporated (HEVI) is capitalizing on the untapped potential of Saskatchewan’s helium resource.The company has land rights to approximately 5.6 million acres, representing the largest land package held by a public company in North America.HEVI’s Saskatchewan holdings put the company in a natural resource-friendly province with a skilled local workforce and a supportive government.HEVI is focused on helium extraction in wells that have nitrogen as the carrier gas, creating an environmentally friendly operation that will also create a cost advantage during the extraction and liquefaction processes.HEVI’s land package contains significant helium targets created by radioactive decay; existing exploration data will help the company select drill targets offering higher probabilities of success.Enhanced farm-out agreement with North American Helium provides HEVI near-term drilling catalysts that can accelerate cash flow generation without incurring up-front capital costs.The company is led by an impressive management team with a combined 150 years of experience in resource development and executive leadership.

Key Project

The Deadwood

Helium Evolution is targeting a geological formation known as “The Deadwood Sand Reservoir” for its initial exploration and development. More than 185 potential helium anomalies have already been identified.

Project Highlights:

Existing Geophysical Data: Helium Evolution has acquired a significant amount of data, including well logs, aeromagnetic data and seismic data to assess the best drill targets.Simple Drilling Process: Drilling for helium is similar to conventional natural gas drilling, only requiring a vertical drill and does not require specialized equipment or fracture stimulation.Nitrogen Carrier Gas: Nitrogen is the primary carrier gas, allowing for environmentally-friendly venting and a cost advantage during extraction and liquefactionNearby Wells: A nearby helium development, the Mankota Pool, has demonstrated a nitrogen-rich reserve boasting helium contents of up to 1.08 percent and has a nearby helium production facility.

Management Team

Greg Robb – President and Chief Executive Officer

Greg Robb brings more than 35 years of experience across all facets of Western Canadian energy resource activity, including exploration and development, acquisitions and dispositions, and reserve valuations. He previously held executive positions in several E&P companies and founded Salvo Energy Corp. in 2006. He has extensive experience in heavy oil, shallow gas, coal bed methane, deep basin tight gas, and conventional oil and gas plays, evaluating over $500MM of acquired assets.

Patrick Mills – Chief Operating Officer

Patrick Mills has more than 36 years of executive, managerial, and engineering and operational experience in the Western Canadian Sedimentary Basin. He previously founded Mustang Resources and Pegasus Oil & Gas, where he held executive and board positions, as well as technical and managerial positions with Texaco, Imperial Oil Ltd and Startech Energy.

Kristi Kunec – Chief Financial Officer

Kristi Kunec has more than 15 years of financial experience, with a proven track record that includes leading the corporate finance, organizational planning and financial reporting functions for growing resource companies. Over the last 13 months, she has served as part-time controller for Kanata Clean Power & Climate Technologies Corp., and prior to it was chief financial officer and corporate secretary for Pine Cliff Energy Ltd. (TSX:PNE). Kunec directly contributed to the growth of the company from approximately 100 boe/d to 24,000 boe/d, which included closing four equity offerings that raised more than $170 million, and the completion of two corporate and seven asset acquisitions. Prior to Pine Cliff, Kunec was controller for North American Oil Trust, corporate controller for Orion Oil & Gas Corporation, and manager of financial reporting for TransGlobe Energy Corporation. After graduating with a Bachelor of Commerce from the University of Saskatchewan, she began her career at PriceWaterhouseCoopers LLP in 2003, earning her CPA, CA designation in May of 2006.

John Kanderka – VP, Corporate Development

John Kanderka has more than 40 years of experience in the energy and mineral sectors as an officer and director of private and public entities. He founded multiple companies leading to a wide array of experience in corporate finance, mergers and acquisitions, buyouts, and corporate restructuring. He is currently a director of Orestone Mining Corp. and chairman and founder of Visionary Gold Corp.

Brad Wall – Director

Brad Wall is a special advisor in the Osler Calgary office. Prior to joining Osler, he was in politics for 18 years where he demonstrated a consistent ability to bring political and business leaders together as he implemented creative ways to bolster the Province’s economic well-being. Wall was elected as Premier of Saskatchewan and helped lead the province to a period of record population and economic growth, export expansion, record infrastructure investment and tax reductions while helping to earn the province’s first-ever AAA credit rating. Wall offers Osler clients his strategic insight and guidance, particularly in relation to the energy and agri-food industries.

Heather Isidoro – Director

Heather Isidoro has more than 20 years of experience in the energy industry, the last 17 of which were focused on business development, most recently as the vice president of Business Development with Pine Cliff Energy Ltd. She specializes in acquisitions and divestitures, reserves valuations, and financial modeling. Isidoro is president and a director of the Petroleum Acquisitions and Divestitures Association, and a trustee of the University of Saskatchewan Engineering Advancement Trust. She has a BSc in geological engineering from the University of Saskatchewan and an MBA from Athabasca University.