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(Sharecast News) - Helix Exploration announced on Thursday that it has raised 4.5m through an institutional placing and subscription, as it reported strong flow test results from its Weil #1 well and confirmed plans to expand drilling at its Montana helium assets.
The AIM-traded firm said the fundraising, priced at 16p per share, was supported by a large private family office and other institutional investors.
It said the proceeds would be used to advance Helix's near-term production programme in the Montana Helium Fairway.
Flow testing at the Weil #1 well delivered sustained rates of 2,300 Mcf/d of raw gas, with helium concentrations of 1.0%, consistent with commercial-grade output.
The remainder of the gas stream was primarily nitrogen.
Helix said three wells tested to date could support pre-tax annual cash flow of around $12m, with the potential to rise to $20m following the drilling of two additional production wells.
Mobilisation for the fourth well, Inez #1, was expected to start next week.
The company said the drilling programme remained in line with its early production timeline and commercial projections.
Hannam & Partners acted as sole bookrunner and broker on the fundraising.
"We are pleased to announce the successful recompletion of the Weil #1 well at the Rudyard Field in northern Montana," said chief executive officer Bo Sears.
"With this result, Helix now has three confirmed production wells - Linda #1, Darwin #1, and Weil #1 - with these three helium gas producing wells it firmly establishes the Rudyard field as a robust, near-term helium-producing field.
"Based on exceptional results to date, the company has decided to fast-track development with a fourth and fifth production well, with Inez #1 to commence mobilisation next week."
Sears said an additional two production wells would allow for a rapid ramp up to full field production, improving overall project NPV.
"This will be funded through the proceeds of the Fundraising, led by a cornerstone investment by a large private family office with over a $1 billion assets under management, underscoring Helix's stature as an institutional-grade investment opportunity."
At 1213 BST, shares in Helix Exploration were up 9.33% at 20.5p.
Reporting by Josh White for Sharecast.com.