Helium One shares lose steam after negative drilling update

The helium producer’s stock suffered a second crash in less than a month, after it shared that its second well failed to find any helium gas.

  • Helium One (LON: HE1) shares fell by over 50% on Thursday (26 August)
  • The company said its Tai-2 well concluded ‘without identifying helium gas’
  • Chief executive remains optimistic about the company’s progress
  • Keen to take a chance on Helium One? Open an account with us to start trading the stock.

Helium One stock price plummets again

Helium One shares had another spectacular crash on Thursday morning – its second in less than a month, after the company ended its 2021 drilling campaign.

The helium producer’s stock plummeted by over 50% to 6pence a share, after it revealed that its latest drilling campaign through the Tai-2 well concluded ‘without identifying helium gas’.

Tai-2’s failure follows that of Tai-1, which had confirmed ‘the presence of a working helium system’, but was also unable to locate any free gas ultimately.

Chief executive David Minchin, however, remained optimistic about the progress, saying that the two campaigns have yielded ‘significant information’. He added that there is also enough data to move to ‘a two-track exploration route to develop’ the Rukwa Project in Tanzania.

Should you take a chance on Helium One?

Whatever your view, go short and long with CFDs on Helium One and 16,000+ shares with the SG’s No.1 platform.* Learn more about trading shares with us, or open an account to get started today.

* Awarded the Best Online Trading Platform by Influential Brands in 2021.

Is Helium One’s lack of revenue a problem?

Despite the disappointing developments and its latest price crash, investors should still be happy to know that the stock is still up by over 110% from one year ago.

Just for this year alone, Helium One’s share price is also up by a respectable 10%.

This is impressive, especially for a company that has yet to turn in any sales. The stock’s outperformance has really come on the back of guidance and forecasts.

Looking to the near future, some investors would also remain invested in the company for its potential to replace outdated Helium supplies, if its guidance on the Rukwa Basin turns out to be true.

Minchin also stated in the update that the company’s cash position remained healthy.

‘We're well financed, we have got £10mln left in the bank. And that gives us a great deal of optionality, and the ability to advance the project very rapidly,’ he said.

‘I'm looking to mobilise seismic imaging physical this season, so that we're able to get information from before the rain starts in mid-November, it's ambitious, but we try our best because I hate wasting time.’

Still, it should be noted that Helium One does not have any revenue or steady gas reserves. Until this changes, the nature of the stock thus appears to be largely speculative for now.

As of Friday (27 August), the stock has recovered slightly to around 9p per share, but remains roughly 28% below pre-announcement prices.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.