Avanti Energy: Up, Up and Away? With Helium in Short Supply, Avanti Recently Completed Initial Testing on First Helium Well with Encouraging Results

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Birthday balloons floating off into the sky are likely what most people conjure up when they think of helium, but the lighter-than-air gas has a plethora of uses beyond marking another trip around the sun. 

Helium is noncombustible and has properties that make it irreplaceable for industrial applications like fiber optic cables, data centers, semiconductor manufacturing, and MRI machines.

But helium isn’t easy to come by. While helium is the second-most common element in the universe, on Earth it's classified as a scarce and nonrenewable resource. It’s estimated that the supply of helium will not keep up with demand for the next 20 years. 

“We’re going to be looking back and thinking, ‘I can’t believe people just used to fill up their balloons with it when it’s so precious and unique,” Cambridge University chemist Peter Wothers is quoted as saying in an Avanti Energy Inc. AVN ARGYF presentation. 

Helium is generated by the decay of uranium and thorium in the basement rocks. Once released from the source rock, it can interact with formation water that carries the dissolved gas as it ascends. When the water contacts a pre-existing gas cap (containing nitrogen, methane or carbon dioxide), helium partitions out into the gas cap. 

The United States is the world’s largest helium producer, accounting for about 40% of supply. However, the U.S. National Helium Reserve in Amarillo, Texas, the world’s single-largest source of the gas for the past 70 years, is now exhausted. 

Canada is estimated to have the fifth-largest helium reserves in the world, and they are virtually untapped. 

A Prospect for Opportunity?

That could leave room for companies like Calgary, Alberta-based Avanti to capitalize on the high demand and scarce supply of the gas.

Avanti, which is focused on the exploration, development, and production of helium across Western Canada and the United States, has acquired several highly prospective helium assets in the Greater Knappen area in Montana and continues to evaluate additional prospects.

Yesterday, Avanti completed successful initial testing after drilling its first helium well on its 100%-owned Greater Knappen property, located in Montana. Results demonstrated that there is potential for economic helium production in two of the three target zones.  Avanti is now moving quickly to begin drilling its second well location in the area in the coming days. 

Avanti owns about 69,000 acres of potentially helium-rich properties in Montana and Alberta, and other wells surrounding Avanti’s lands are relatively rich in helium.

While helium exploration companies such as Perth, Australia-based Blue Star Helium Ltd. BSNLF and Vancouver, Canada-based Desert Mountain Energy DMEHF derive the element from natural gas, one company is doing things differently. Avanti’s product is associated with nitrogen. 

Helium is colorless, odorless, non-toxic, and inert. With the ability to reach close to absolute zero and remain a liquid, as well as to transform into a superfluid, helium is vital for different uses within various sectors including medical, aerospace, technology, automobile, and industrial.

The global helium market was worth $10.6 billion in 2019, according to ResearchAndMarkets.com. It’s expected to grow at a compound annual growth rate (CAGR) of 11% and reach $15.73 billion by 2023.

This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investing advice.