Helium Market on the Verge of Change as Demand Grows

Helium, a rare and non-renewable resource, promises an opportunity for investors as the demand grows. However, it remains a niche market with no public spot price for the product, according to a recent article.

In an interview with Tara Weber, BNN Bloomberg’s Western Bureau chief, Helium Evolution Incorporated (TSXV:HEVI) president and CEO Greg Robb said there isn’t a spot price for helium right now, noting that the current helium market is reminiscent of the “wild west” beginnings of the oil industry.

He said for several years, “midstreamers,” companies who buy helium from producers, process and then sell it to end users, have dominated the helium industry and now have a captive market, much like an oligopoly.

“If you have a monopoly, you have pricing power. The oligopoly is – I mean I don’t know how much collusion there is, or if there is any, but when you can’t find a price point for your product, it’s difficult to make the proper investment decisions too. This is a risky business. On our five million acres, there are only five wells that go down through the full sedimentary section so we’re just wildcatting,” Robb said.

The Helium Evolution CEO told Weber his company was approached by several groups in the past – one of them offering a contract for $350 per mcf [thousand cubic feet]. These offers came in even before Helium Evolution started drilling for helium.

“We were at a little mineral conference about four weeks ago,” Robb told Weber. “It was mostly mining companies and there was a company called Desert Mountain Energy Corp. which is a helium company listed on the TSX Venture exchange, but working down in Arizona. The guy that presented, [company president] Don Mosher, said the market in Arizona for wholesale helium was $1,500 per mcf. Then I heard from talking to someone at the Schacter Energy conference, a knowledgeable person in the helium space, who says the current price for 2024 is US$750.”

As more producers start selling to end-users, effectively cutting out the middleman, the power in the helium industry will begin to shift towards producers, the article said.. And as publicly traded helium companies start to report sales data on their quarterly earnings, price transparency will be inevitable, according to Robb.

Helium Evolution is currently the largest publicly traded land-holder in North America, holding 5.5 million acres of property in Saskatchewan’s Cambrian formation.

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