Mendell Helium – A hidden producer ready for lift off
The Market Pulse:
Mendell Helium – A hidden producer ready for lift off
Dear Reader,
Mendell Helium is a company on the cusp of transformation.
As you read this, London’s only listed helium producer is making final preparations for a major ramp-up in production courtesy of its Rost well. At the same time, it’s rolling out a bold Bitcoin treasury and mining strategy designed to strengthen its balance sheet and diversify its financial foundation.
You wouldn’t guess any of this from the company’s market cap, though. Sitting at just £2 million, Mendell remains well below the radar.
But that could be about to change.
With new production imminent, strategic crypto initiatives gaining traction, and a move to the AIM market in the pipeline, the months ahead could bring Mendell to the attention of a much wider investor base.
For those willing to look closely now, the potential rewards could be significant.
Helium production imminent at Rost Well
Mendell’s most immediate milestone is the long-anticipated start of helium production from its Rost 1-26 well in Fort Dodge, Kansas.
The well is owned by M3 Helium, the company over which Mendell secured an option to purchase when it pivoted into helium last year. Now, with testing of the nearby Brobee water disposal well complete and all required approvals in place, gas is expected to begin flowing later this month.
This is no small event.
Testing at Rost confirmed a high helium concentration of 5.1%, while a prior drill stem test showed maximum flow rates of nearly 3 million cubic feet (3,000 Mcf) per day.
Even more importantly, M3 Helium already owns and operates a mobile Pressure Swing Adsorption (PSA) plant on site. This system can process up to 800 Mcf per day of raw gas and purify it to an ultra-high purity level of 99.999% helium.
With that setup in place, Mendell expects the Rost well to generate monthly revenues in excess of US$100,000, based on historical price estimates. Given that helium prices have risen since those estimates were made, actual revenue could be even higher.
Critically, Mendell’s management believes revenue from the Rost well will be sufficient to cover the company’s overheads. That means any additional capital generated – either through operations or future fundraising – can go directly into expansion.
And frankly, there’s no shortage of targets.
In Fort Dodge alone, Mendell has been steadily acquiring new land packages to establish more Rost-style wells targeting the same proven formations in different “pockets”.
Meanwhile, through its M3 Helium option, it has access to a suite of producing wells and a large prospective landholding in Kansas’s prolific Hugoton gas field. These assets provide a clear route to further scale, should Mendell choose to accelerate its plans outside of Fort Dodge alone.
Innovation beyond the drill bit
While Mendell’s primary focus is firmly on increasing helium output, it’s also taking a forward-thinking approach to its longer-time financial resilience.
This includes a two-part crypto strategy that uses its helium production by-product methane along with free cash flow to build long-term optionality.
First, the company is examining a small-scale Bitcoin mining operation powered by methane gas that would otherwise be flared or disposed of at a cost. This approach converts a liability into an asset, creating balance sheet value from waste. Preparations are underway, with further details expected soon.
Second, Mendell recently announced plans to allocate up to 50% of its helium revenues and surplus cash into Bitcoin as a long-term reserve asset.
It’s important to note this isn’t a pivot away from helium whatsoever – Bitcoin is not Mendell’s business, it’s simply a treasury strategy. If capital is ever needed for drilling or operations, that always comes first.
Rather, Bitcoin’s unique properties (limited supply, independence from central bank policy, and strong long-term performance) make it a compelling diversification tool. It’s why pure play treasury companies have become so popular this year.
As fiat currencies continue to face inflationary pressures, holding cash in the bank means losing value in real terms. In contrast, Bitcoin offers Mendell a chance to preserve, and potentially grow, the value of its cash reserves over time.
If successful, this strategy could create an additional pool of capital that can either be reinvested into drilling or returned to shareholders in the future – another major tick in the box.
A sky-high outlook
With production at Rost expected within weeks and major expansion opportunities ahead, Mendell is rapidly transitioning into the execution phase of its growth strategy.
At the same time, its Bitcoin strategy could provide it with the balance sheet resilience it needs to weather volatility across both energy and financial markets.
With a move to AIM in the works, Mendell may soon benefit from increased liquidity, improved access to capital, and a broader investor audience.
At £2 million, the market has yet to price in these developments.
But that may not last much longer.
Best wishes,
The StockBox team