Hi Brewsters, sorry about the delayed response.
Since you mooted the topic of peer comparisons in your last post, I've given some thought to the subject.
There aren't really all that many helium stocks. To begin with, I think it makes sense to first look in our own backyard. So, what stocks listed on the local sharemarket offer exposure to the commodity helium?.
Firstly, the two most obvious: Big Star Energy, and Renergen.
One poster here made a comment earlier to the effect that Renergen was a better bet than Big Star, but the reality is that you aren't comparing 'apples' with 'apples' if you try to size up these two. Renergen is a mature stock, with a market cap of $165 million at time of writing, whereas Big Star is a junior with a market cap just over the five million mark. So in other words, chalk and cheese.
Apart from these, there are two other listed stocks with helium exposure listed on the ASX. Firstly, there is Central Petroleum, who probably have strong helium potential in their Amadeus basin assets, even though the company seldom mentions this. Again, a mature stock, and not at all comparable to BNL.
This brings us to the last of the local helium stocks, Global Oil and Gas, who were previously known as Global Vanadium, and before then as Baraka. The company sold their helium assets in the Northern Territory to a UK based group, who plan to relist the asset on the London LSE under the name 'Georgina Energy'. Global Oil and Gas will own some shares in this company when it lists in the new year, although I doubt that they intend to hold on to these shares for very long.
Turning abroad, I am aware of three helium stocks listed overseas (here I am excluding Renergen, which is also listed on both the Johannesburg Stock Exchange and the A2X exchange in South Africa).
These are Royal Helium, American Helium and Desert Mountain Energy. Two of these -Royal and Desert Energy- are listed on the Canadian TSX, as was American Helium, until recently. Like Big Star, all of these are junior companies.
Royal Helium states in their website that they control 366,215 acres in Saskatchewan, Canada.
Saskatchewan is definitely off the beaten track, with the largest city of the province, Saskatoon, boasting a population of just 250,000. The closest comparable stock to Royal Helium would be the soon to be listed Georgina Energy. The market cap of Royal Helium is currently just over $1 million AUD.
The next company, American Helium, was until recently in an extended trading halt. The trading halt was lifted in early December, and they announced that they would be re-listing on the London NEX Exchange. The share price of the stock plunged after the trading halt was lifted, and the low market cap of the company, less than $1 million AUD at current, is probably related to the move. When stocks decide to re-list on an exchange in a new jurisdiction, it tends to prompt a wave of selling.
That brings us to Desert Mountain Energy, the only 'helium stock' which I judge to be in anyway comparable to Big Star.
Like Big Star, Desert Mountain control helium acreage in the United States. According to the
company website, their main project is the Heliopolis Project in Arizona, where they are sitting on a helium acreage position of 65,911 acres. The website doesn't specify whether this figure is 'net' or 'gross' but I am assuming it is the former.
The table below compares the acreage position of Big Star and Desert Mountain, as well as the relative market caps of the two companies, which have been converted to Australian dollars at the current rate:
The Desert Mountain Arizona helium acreage position is 30% larger than that of Big Star's Colorado position, however the market cap is 70% greater.
Apart from the helium, Desert Mountain is also sitting on an 883 acre oil and gas position in Oklahoma, but I am doubtful that this would be worth much.
Anyway, assuming all things are equal, if you purchase Desert Mountain shares at the current price, you are paying $132 AUD for each acre of (mostly) helium ground that they control, whereas if you buy Big Star shares at 0.007 a pop you are paying $101 AUD for each Colorado acre they control.
Based on this comparative analysis, the Big Star share price should probably be around the 0.009 mark, again assuming that all things are equal.
In conclusion, Big Star shares look like they could be good buying under the 0.01 mark.
One thing to keep an eye on in the near future is how well the Georgina Energy IPO is received when it lists on the LSE in the next few weeks. If it proves to be a hit, the BNL share price might then start marching north of the 0.01 mark.
(20min delay)