Helios Identifies 15,500-Acre Sweet Spot and Restarts Production at Presidio
Helios Energy has restarted production at its Texas Presidio wells and identified new drilling targets, setting the stage for a dual-track development strategy that balances early cashflow with longer-term growth.
- Restarted production at two existing Presidio wells with first oil sales completed
- Defined a 15,500-acre unconventional sweet spot for focused near-term testing
- Identified five conventional drill-ready prospects with farm-out plans to reduce capital risk
- Strengthened US technical team with key contract appointments
- Maintains disciplined cash management with A$743k cash and $500k undrawn credit facility
Strategic Reset at Presidio
Helios Energy has taken significant strides in advancing its Presidio Oil Project in West Texas during the September quarter. Following a comprehensive technical review with consultants W.D. Von Gonten (WDVG), the company pinpointed a 15,500-acre unconventional sweet spot within its larger 100,000-acre leasehold. This focused area is earmarked for near-term drilling to validate production potential and underpin a revaluation of the broader acreage.
Alongside this, Helios identified five conventional drill-ready prospects targeting the San Carlos and Lower Cretaceous formations. These conventional targets complement the unconventional play and offer additional upside. The company plans to pursue farm-out agreements for these prospects, aiming to share capital costs while retaining significant upside exposure.
Restarting Production and Building Momentum
Operationally, Helios recommenced production activities at two existing wells, 141#1 and 141#2. The restart program involved installing plunger lift systems, upgrading remote monitoring, and refurbishing surface equipment. Despite some weather-related delays, the wells have begun intermittent oil, gas, and condensate recovery, with first oil sales already completed. These early production efforts not only generate cashflow but also provide valuable reservoir and mechanical data to inform future development.
Strengthening the Technical Team
To support its dual-track development approach, Helios bolstered its US technical team with three senior contract appointments – a Chief Operating Officer, Chief Geologist, and Chief Drilling Engineer. These additions bring deep operational, geological, and drilling expertise, particularly relevant to the Presidio acreage. Importantly, these roles are contract-based, allowing Helios to maintain capital discipline while enhancing technical capability.
Financial Position and Outlook
Helios ended the quarter with A$743,000 in cash and an undrawn $500,000 credit facility from Gleneagle Securities. The company reported net cash outflows from operations and investing activities, reflecting ongoing exploration and development expenditure. With an estimated funding runway of just over one quarter at current spending levels, Helios remains prepared to adjust discretionary spending and has the capacity to raise additional capital if needed.
Engagement with major leaseholders in Presidio County continues to be constructive, supporting potential acreage expansion. Managing Director Philipp Kin emphasized the company’s disciplined approach to advancing both near-term production and longer-term growth opportunities.
Bottom Line?
Helios Energy’s dual-track strategy and operational restart mark a pivotal phase, but upcoming drilling results and farm-out deals will be critical to sustaining momentum.
Questions in the middle?
- How soon will Helios commence drilling the unconventional sweet spot test wells?
- What terms and timelines are expected for the planned farm-out agreements on conventional prospects?
- How will early production data influence the company’s valuation and development plans?
