FN Media Group Presents Oilprice.com Market Commentary
London – February 17, 2022 – Supply shortages…That’s what is fueling the market right now. Oil companies are making out like bandits…Natural gas prices are skyrocketing…And commodities like lithium, cobalt, and aluminum have soared to new heights. But it’s not all sunshine and roses for some industries. . Mentioned in today’s commentary includes: Air Products & Chemicals (NYSE:APD), Dow Chemical Company (NYSE:DOW), Linde plc (NYSE:LIN), DuPont Corporation (NYSE:DD), Bloom Energy (NYSE:BE).
The auto industry has seen its production plummet due to the global semiconductor shortage…And top automakers are saying it’s not going to end anytime soon. But semiconductors and commodities aside…There’s one resource that no one is talking about. And it could have a massive impact on the world as we know it.
It’s used in everything from medical devices and cryogenics to space travel and even powering the internet. It’s a major element in a number of key supply chains. In fact, it’s even listed as a critical material to U.S. economic and national security. It’s a non-renewable resource…and our supply is running dangerously low.
The New York Times says…The Global Helium Shortage Is Real, but Don’t Blame Party Balloons.
While CNBC warns…The worldwide helium shortage affects everything from MRIs to rockets.
And the BBC highlights…Helium Shortage: ‘Prices just keep going up and up”
Say what you will about the space race, web3, or the metaverse…A helium shortage not only stops those innovations in their tracks…It could also derail the technology we’ve all become accustomed to.
Nothing may be possible without it. And if you thought nuclear fusion was going to save the planet from rising emissions…Without this noble gas, you can kiss that dream goodbye, as well.
Helium: The Most Important Resource No One is Talking About
Many people see helium as just the stuff inside birthday balloons…But that isn’t even the tip of the iceberg. It’s actually a key component in the tools you and I use every single day.
In fact, if you’re reading this right now – it’s because of helium. That’s because it is a key ingredient in computer chip manufacturing. It’s also a vital element in telecommunications.
Helium is what has allowed us to go from that annoying 56kb dial-up internet connection to…the 1gb connections popping up all over the world. This is significant because, without helium, some of the biggest companies in the world might not even exist.
Bid farewell to your Sunday afternoon binge-watching sessions…And definitely forget about ordering that really cool-looking kitchen tool that popped up in your Facebook newsfeed a few minutes ago. But we’re just getting started.
Growing demand from Big Tech and other innovative industries has created a massive supply imbalance…And, in turn, paved the way for a fast-moving growth opportunity for any exploration and development company that can show potential for significant new helium discoveries.
In 2019 alone, helium prices soared by 135%, hitting $280/Mcf…And today, refined helium is selling for $600-650.00 USD per mcf.
All while production is slowing…
Now, more than ever, helium is a low-volume, high-value commodity. But it doesn’t trade like one.
You see, there are no ETFs to bet on helium…and no commodity market. Even helium companies themselves are few and far between. Many of the top producers aren’t even public because they’re so profitable. But one small-cap explorer is poised to change that.
The Small Company Making Big Moves In The Helium Space
Recently, the explorer announced that it had completed initial open-hole logging and drill stem testing on its first two helium wells on its 100%-operated Greater Knappen project…And to say that the results were promising…would be an understatement. This could be just the beginning for Avanti, as well.
The Greater Knappen property is 69,000 acres…and estimates suggest it could potentially hold as much as $1 billion worth of helium. To put this opportunity into perspective, Avanti Energy’s entire market cap is just $80 million at the time of writing.
Already, just a few miles away from the Greater Knappen property, a competitor is producing as much as 55,000 cubic feet of helium per day. And the company is seeing payback on their well investments in as little as six months’ time.
To us, that’s not just impressive, it’s inspiring. Avanti’s helium reserves could be even better, with a possible helium concentration of as high as 2%, while its competitor’s concentration rate is 1.4%.
What that means is that Avanti’s exploration costs could see a return in as little as THREE months if its exploration and development efforts are commercially successful. At the moment, these wells are projected to cost just $1.5 million to drill…and could potentially run for 10 or even 15 to 20 years!
If achieved, that would be an incredible return on investment, especially considering the fact that helium demand is set to rise even more in the coming years.
Think about this…a single space launch uses about $12 million worth of helium…
Elon Musk’s SpaceX alone is planning a total of 52 launches this year. And that’s nothing compared to NASA, the single biggest buyer of helium. NASA consumes approximately 75 million cubic feet annually to cool liquid hydrogen and oxygen for rocket fuel. Between tech innovation, the future of energy, and the red-hot space race, the helium market is set to increase by 11% every year through 2037.
Avanti Is Turning Heads
Avanti Energy Inc (AVN.V; ARGYF) is making waves in the helium space, thanks to its experienced leadership. With a solid newsflow and better-than-expected drilling results, analysts are eyeing a major opportunity in this up-and-comer.
Beacon Securities, for example, noted that Avanti “now has a contiguous land block that may support several years of drilling.”
“If successful, numerous development wells would follow with production in H2/22 once facilities are configured and installed,” Beacon notes, adding that “critical mass” has been achieved with Avanti, which now has a “key asset on which its world-class technical team can explore.”
Remember, Avanti Energy Inc. (AVN.V; ARGYF) only has a market cap of around $80 million right now…And it might be sitting on as much as $1 billion in potential helium…the resource literally powering our future.
This may just be the beginning of Avanti’s story…But we think it’s only going to get a lot more interesting from here.
Other companies looking to capitalize on the commodity boom:
Air Products & Chemicals (NYSE:APD) has been at the forefront of global hydrogen production for years. They recognize that this clean alternative fuel can help make an impactful dent in boosting our country’s green energy initiatives as well as reducing carbon emissions across industries by decreasing reliance on fossil fuels like coal and petroleum products, etc., which Air Product’s own extensive experience with helping others achieve sustainability goals through chemical innovation will bring about even more progress than before.
Air Products and Chemicals has well over 60 years of experience producing hydrogen, and more than two decades designing fueling stations. It’s SmartFuel stations have been deployed across the globe and support a number of different unique and interesting transportation applications.
Dow Chemical Company (NYSE:DOW) is an American multinational chemical corporation headquartered in Midland, Michigan with over a century in operation. This company has been called “the chemical companies’ chemical company” as its sales are to other industries rather than directly to end-use consumers and it employs around 54 thousand people worldwide.
George Kehler, Dow’s commercial manager for Fuels and Energy, notes, “One of Dow’s options to develop a diverse portfolio to power our facilities is to produce energy off the grid through cogeneration, as well as having renewables become an increasingly more important part of the mix”
Linde plc (NYSE:LIN) has been in the business of manufacturing and distributing gas for over 130 years, making it one of THE oldest companies still operating today! It was founded by Carl von Linde who invented an improved process for liquefying air. Today they have customers all around the world including hospitals (especially ones that use anesthesia), petrochemical plants, steel mills – you name it; if there’s anywhere with a demand on atmospheric gases then likely someone at this factory can help meet those needs.
The company is currently looking forward to new projects such as renewable energies where it will be developing an innovative solar project combining steam power generation technology (SPG) with thermal storage modules.
DuPont Corporation (NYSE:DD) is a global science company with more than 60,000 employees. DuPont’s motto of “Better Living Through Chemistry” was applied to the development of products that help make agriculture sustainable and improve our daily lives. The company has introduced nylon, Lycra (spandex), Kevlar fiber, Tyvek home insulation and other new fibers as well as innovative solutions for existing materials such as color TV tubes, paints, and coatings.
Over 20 years ago, DuPont was already knee-deep in the fuel cell game, forming an entire division dedicated to hydrogen fuel cell technology. Richard J. Angiullo, then-VP of DuPont Fluoroproducts explained, “Increasing global energy requirements and the desire for new, alternative energy sources in many markets make fuel cells an exciting new growth opportunity for DuPont.”
Bloom Energy (NYSE:BE) is a company that has been working on clean energy solutions for the world. The company was founded in 2001 and their mission statement is to “bring affordable, renewable power to homes and businesses everywhere.” Their main product is called Bloom Box, which converts natural gas into electricity with a cleaner process than traditional methods. They have recently signed contracts with major companies such as Google, Wal-Mart, FedEx and Staples.
Bloom Energy’s goal is to provide cheaper rates for both residential and commercial customers while also being environmentally friendly by using less fossil fuels. Their next steps are expanding globally so they can help as many people as possible get access to affordable power sources.
By. Michael Kern
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This publication contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this publication include that prices for helium will significantly increase due to global demand and use in a wide array of industries and that helium will retain its value in future due to the demand increases and overall shortage of supply; that Avanti will able to successfully pursue exploration of its licenses and properties; that Avanti’s licenses and properties can achieve drilling and mining success for commercial amounts of helium; that indications of potential for economic helium in Avanti’s initial wells will predict future results; that Avanti will be able fulfill its obligations under its licenses and in respect of its properties; that Avanti will be able acquire the rights to the helium on its prospective helium properties; that the Avanti team will be able to develop and implement its helium exploration models, including their own proprietary models, that may result in successful exploration and development efforts; that historical geological information and estimations will prove to be accurate or at least very indicative of helium; that high helium content targets exist on Avanti’s projects; and that Avanti will be able to carry out its business plans, including timing for drilling and exploration. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include that demand for helium is not as great as expected; that alternative commodities or compounds are used in applications which currently use helium, thus reducing the need for helium in the future; that the Company may not fulfill the requirements under its licenses for various reasons or otherwise cannot pursue exploration on the project as planned or at all; that the Company may not be able to acquire the helium rights on its properties as contemplated or at all; that the Avanti team may be unable to develop any helium exploration models, including proprietary models, which allow successful exploration efforts on any of the Company’s current or future projects; that Avanti may not be able to finance its intended drilling programs to explore for helium or may otherwise not raise sufficient funds to carry out its business plans; that geological interpretations and technological results based on current data may change with more detailed information, analysis or testing; and that despite promise, results of the recent drilling and exploration may be inaccurate or otherwise fail to result in locating or developing any commercial helium reserves on the Avanti properties, and that there may be no commercially viable helium or other resources on any of Avanti’s properties. The forward-looking information contained herein is given as of the date hereof and we assume no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.
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