Quantum Helium (QHE) continues to offer significant upside potential as work progresses across its Colorado helium portfolio, according to an updated research note from Oak Securities.
The broker maintains a valuation of 6.4 pence per share, based on a risked exploration net asset value, with its assessment reflecting the progress made at the company’s Sagebrush and Coyote Wash projects.
Oak’s analysis highlights Quantum’s position as one of the larger independently assessed helium resource holders among London-listed peers, with more than 1 Bcf of independently assessed helium resources across the two Colorado projects.
At Sagebrush, the extended production test at the Sagebrush-1 well has confirmed helium-bearing gas at a concentration of 2.5%, alongside reservoir connectivity and commercial oil production. The results have strengthened the case for progressing the project towards development while adding an oil revenue stream to the helium opportunity.
Quantum holds a 90% working interest across around 10,000 acres at Sagebrush. Oak estimates 2U helium resources at the project of around 131 million cubic feet, while the company has also identified additional oil potential in the Leadville formation.
At Coyote Wash, the broker points to the potential of six identified prospects, with combined 2U helium resources estimated at around 970 million cubic feet. Drilling opportunities at the project are expected to follow the current Sagebrush work.
Quantum is also well funded to pursue the next phase of its programme following its £5 million institutional placing in April, which Oak said left the company with more than US$8 million of pro forma cash.
The broker's valuation assumes a helium price of US$500/Mcf, which it considers conservative against prices being achieved across the industry. It also sees the broader helium market as supportive, with supply remaining tight while demand is being driven by sectors including semiconductors, medical imaging, aerospace and AI.
For Quantum, the focus now shifts towards converting its independently assessed resources into commercially viable production, with Sagebrush testing and the Colorado drilling pipeline providing a series of potential catalysts.
View from Vox
Oak's valuation gives investors a useful benchmark for the potential value of Quantum's Colorado portfolio, but the next major step is proving deliverability. Successful flow results at Sagebrush would remove a key element of geological and development risk and could provide the basis for a reassessment of the broker's valuation. With oil already generating revenue and helium testing continuing, the company has several potential sources of newsflow ahead.