02:17:29 EDT Fri 29 Mar 2024
Enter Symbol
or Name
USA
CA



Desert Mountain Energy Corp
Symbol DME
Shares Issued 57,972,669
Close 2020-10-23 C$ 1.78
Market Cap C$ 103,191,351
Recent Sedar Documents

Desert Mountain reviews Q3 highlights

2020-10-26 02:57 ET - News Release

Mr. Robert Rohlfing reports

A REPORT FROM THE CEO: ROBERT ROHLFING

Desert Mountain Energy Corp. has released a third quarter review.

The third quarter has been very significant for the company:

  • Received drill permits for wells State 10-1 and State 16-1;
  • Completed both wells; with significant pay zones discovered in both holes;
  • Sampling proved significant concentrations of helium in both wells, with excellent well pressure and low carbon dioxide concentrations; purifying the helium will not involve any costly or problematic issues due to the mix of gases in the wells;
  • Completed a $13-million financing priced at $1.60;
  • Added three new board members to the team;
  • Began design work on a solar-powered processing facility.

Vertical integration

The company is planning on becoming a vertically integrated helium producer, selling directly to end-users. Offtake discussions that have taken place over the last two years with helium processors made it evident that over 40 per cent of Desert Mountain's revenues would go to support their processing system. Prices for finished product have varying price points that range from $490 per thousand cubic feet for shield gas to $3,200 per Mcf for extreme high purity gas. Desert Mountain believes that the shareholders should benefit from the greater revenue achieved by the company finishing its own helium.

Production

The company plans to be in production starting in the fourth quarter of 2021. To achieve this goal, it will undertake the general following items:

  • Finish permitting for a third well in the western part of the Holbrook basin to prove up additional low-carbon-dioxide, high-nitrogen-content raw gas;
  • Drill third well in early November, and secure gas analysis and flow rates;
  • Contract with gas engineering firm to begin design of both well site nitrogen stripping and final processing facilities;
  • Contract with power engineering firm to finalize solar generation site requirements; goal is to become as close to carbon neutral as possible;
  • Finalize and sign contracts with surface owners for both power generation site and processing facilities;
  • Begin archeological studies and reviews for both well sites four to six and seismic acquisition;
  • Exercise options for up to additional 42,000 acres of leases or some portion thereof;
  • After further gas analysis and flow testing, provide possible end-users with options for purchase agreements and execute them when most advantageous for the company;
  • Secure tractor trailer rigs as required by agreements;
  • Train plant personnel and secure additional contract drivers for trucking aspects.

The company's four-year plan

The company plans to start producing from four to six wells in the fourth quarter of 2021. The company's success in raising $13-million gives the company the money to rapidly move forward with the first phase of its plans. Full development of the company's land package is expected to take approximately four years.

The four-year plan to full production:

  • Total number of wells projected to be 50 to 55;
  • Total projected capital expenditures, including all drilling and infrastructure over six years, are $45-million;
  • Upgrade helium to end-users will result in a shorter payback period;
  • Signing contracts with end-users will stabilize future price swings in the helium market and give the company a competitive edge.

The company realizes this is a very ambitious plan; however, with the success of the first two wells proving its geological model, the plan can be achieved. There is a lot of work and planning to be done along with expanding the team.

About Desert Mountain Energy Corp.

Desert Mountain is a publicly traded exploration and resource company focused on the discovery and development of rare earth gas fields in the United States. The company is primarily looking for elements deemed critical to the green energy and high-technology industries. It is an equal opportunity employer.

We seek Safe Harbor.

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