Here is a research report i found______________
In early May 1999, after extensive work, Navasota Resources secured the exclusive right from the Government of
Saskatchewan for 3 years to explore for helium and associated gases in east-central Saskatchewan. The permits cover 303 sq. miles in an area, 90 kilometres east of Nipawin, where helium gas has been reported in anomalous, exceptionally high concentrations ranging from 2 percent to 89.5 percent.
Helium is an inert, non-toxic, non-flammable gas which, with the exception of hydrogen, is the lightest of all gases.
Given its unique properties, helium is utilized in an increasing number of scientific and industrial applications
including cryogenics, welding, aerospace, and medical equipment manufacturing. The worldwide demand for helium is robust and it is currently priced at over 40 times the present wellhead price of an equivalent volume of natural gas
in Canada. Although the atmosphere contains most of the world's helium, it is at such a small concentration that the
energy cost of recovering it is prohibitive. Economically recoverable helium reserves are generally found in
conjunction with natural gas fields. Most of the helium-rich fields (more than 0.3 percent helium) are found in the U.S. The helium in gas fields outside the U.S. is typically at a concentration of less than 0.1 percent. The U.S. is presently the largest producer and consumer of helium in the world.
There is no helium production in Canada at this time. The helium-rich gas fields presently producing the bulk of the
helium in the U.S. are expected to be depleted in less than 25 years, after which the production cost and market value of helium are both predicted to rise substantially.
In late June 1999, Navasota Resources plans to mobilize an exploration team to the site to commence a detailed sampling program. Exploration efforts will initially focus on the area where helium gas has been previously reported in anomalous concentrations of up to 89.5 percent. Regional geological and geophysical data indicate that the prospects will be at depths less than 500 metres, typical of the reservoirs in the petroleum gas producing areas of Saskatchewan. Test drilling may commence as early as the fourth quarter of 1999 to determine the actual helium content, which other gases are present, the pressures and flow rates. Once the drilling data is studied, projections regarding the project's economic viability can be made with a sufficient degree of reliability.
Navasota notes that the combination of the premium commodity pricing attached to helium as compared to natural gas, and the strong likelihood of the discovery of a helium resource at shallow depths, is expected to potentially lead to highly impressive project economics. Management is convinced that the conditions for establishing commercial production represent more of an engineering and marketing challenge than an exploration concern. This conclusion is based on the fact that helium occurences are reported in a multitude of localities in the general vicinity and area covering the company's exploration rights.
Navasota also holds a 100 percent interest in 34,421 acre Williston Basin oil and gas property situated in Richland
County, Montana. Limited exploration of the project in 1997 identified four significant anomalies which are considered to be prime drilling targets for future drilling.
Management is currently investigating the potential acquisition of producing oil and gas properties in Western
Canada in an effort to diversify its asset base. It is expected that the positive cash flow derived from such properties will recover the company's ongoing administrative expenditures and fund a significant portion of the exploration costs associated with its helium project.
A sustained program aimed at increasing investor awareness about the special nature of the helium project and its
potential world-class nature, as well as the company's intention to expand its oil & gas activities, is planned to be launched in late June 1999.
COMMENTARY
As speculation of a major discovery filters through the market, Navasota's stock price should rise dramatically given
the limited public float of the company. The sustained investor awareness program along with positive exploration
results and developments should attract a growing shareholder base for the company. It is anticipated that the stock's liquidity should improve significantly over the next few months as the stock moves higher and as an increasing number of traders and short-term investors begin to move in and out of the stock. If the exploration program over the course of the next year is successful in identifying a large, world- class economic reserve of helium at the exceptionally high concentrations as previously reported by limited sampling, it is reasonable to speculate that the market value of the company could easily approach the $100 million mark or the $10 - $15 trading range per share. The company should attract growing interest from both retail and institutional investors as it progresses towards its goal of becoming the first significant commercial producer of helium in Canada.
NAV was featured by the Canadian Online Investor at stockreviews.com on June 14th/99 |
