A Good Summary, page-25

Hi Guys,

I have been looking into this sector just recently and keen to exchange some thoughts.

The sector is incredibly opaque and very difficult to get a read on.

It looks to me like BNL and DME (Desert Mountain Energy) are the two USA focused plays that can best be compared. Both have a similar acreage position (net high 60'sk acres) and are at similar stages of development with DME slightly ahead in terms of having drilled 2 x holes and discovered gas in both but do not yet know the % of He. By contrast, BNL has a P90 / P50 and P10 but hasn't actually proved that the theory translates into reality.

Like the U sector, supply has been supplemented for years via the US Government selling off strategic reserves.

It also seems that these areas in the US (Colorado, Oklahoma, Northern Texas, etc) are akin to what the Athabasca Basin in Canada is for U or the DRC is for Co - i.e. super high grade relative to the rest of the world.

Of concern on the supply side is the proximate supply of large amounts of He from Qatar III and Gazprom's Amur project, both of which will be producing He as byproducts to LNG / NG when they come online and thus will be price insensitive to He and more linked to LNG and NG demand (which is forecast to be strong in the out years).

From reading BNL's announcements (and DME's) it seems that both companies don't really know, or at least are not disclosing, the anticipated project metrics including pricing. Every presentation I have read from multiple explorer's / developers reference the US BLM 2018 auction price of US$280 mcf ....

What I like about both BNL and DME is that they have swung hard at land packages ... kind of like the Shale land grab of the last decade. If the He narrative is even half correct these guys "own" their respective basins.

Of course this could be a whole pile rubbish too ... that's the hard part to work out. Regardless, there is likely to be plenty of runway for BNL (and DME) even if the blue sky thesis turns out to be more sullen than bulls anticipate and both BNL and DME are early stage enough that investors / speculators could still make out like bandits on narrative alone ... let alone if this is actually a genuine opportunity.

What critique / additions would you guys add to the above ??

Cheers
John