Helium One Global (HE1.L): Should You Buy Shares Now?

Helium One Global’s shares have excellently rose since its IPO in December 2020, which is not a surprise as the world has a huge demand for helium. Especially, the share prices peaked at 20 GBP in April 2021 with a 65 % increase. Later, in mid-June, values increased from 18 GBP to 27 GBP. However, beginning on June 21, the shares gradually fell to 21 GBP. On July 12, the slope was fixed at 21.9 GBP with a 7.40 % loss. So, if the company’s shares fell, should you buy them?

The Helium One share price fell as much as 20% in early trading on July 12 after the company issued an update on its drilling activities in Tanzania. According to the latest news, the company found more helium in its Lukwa project, but the drilling plan suffered a slight setback. Drilling at the prospect had to be halted after reaching a depth of 561m. The delay was caused by the “parting of a drill pipe.” The missing piece of equipment has not been recovered by the drilling operator. As a result, management has decided to divert the well from 483m above the lost pipe.

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The drilling delay may cause the company’s schedule to be pushed back a few weeks. However, in the grand scheme of things, this delay is only a minor hiccup in what could be a multi-year development effort. Moreover, it is still a highly speculative investment. Today’s update serves as a stark reminder that prospecting for commodities is a risky and volatile endeavor. There is no guarantee that the company will discover commercially viable quantities of helium. Even if it does, there is no guarantee that the gas will be extracted. So, I will not recommend buying the Helium One shares before the drilling results will be completely posted.

Lora Nilsson

Finance and Business reporterAfter graduating high school. Lora decided to travel and blog as a part-timer. Today she enjoys what she loves and works remotely as our finance and business reporter


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