RHC Capital Corporation
NEX BOARD : RHC.H
TSX VENTURE : RHC.H

RHC Capital Corporation

August 02, 2017 12:37 ET

RHC Capital Corporation: Seismic Acquisition and Industry Update

SASKATOON, SASKATCHEWAN--(Marketwired - Aug. 2, 2017) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO U.S. NEWSWIRE SERVICES.

RHC Capital Corporation, operating through its wholly owned subsidiary Royal Helium Corp. ("RHC" or the "Company"), listed on the TSX Venture Exchange (NEX:RHC.H), is pleased to provide an update further to its comprehensive news releases dated July 21, 2017 as it pertains to the acquisition of seismic data and more generally, background on the Helium market.

Seismic Acquisition

RHC has acquired and begun interpretation on 90 square kilometers of 3D seismic that will facilitate project advancement and the delineation of drill targets. These seismic acquisitions, integrated with historical "lead" wells, will help to delineate potential drill target locations and mitigate drilling risk. Analysis of this seismic data is expected to be completed in the next 4-6 weeks. Pending results, the seismic interpretation program will be followed by the initial drilling program. The drilling program is expected to take approximately 10-15 days per well to complete. Analysis of initial results and further production testing will last approximately 60-90 days. It is anticipated that a temporary production facility will be brought on-site to test the well while plans for a permanent facility are evaluated.

Helium Market

The current global market is estimated by the United States Geological Survey ("USGS") to be ~8 Billion Cubic feet ("cf") annually, with the price of bulk liquid helium rising by more than 100% in the past ten years. Pricing information is not consistently and publicly available. Pricing is generally determined through private contracts for both liquid and gaseous forms (1 lb of Liquid Helium is approximately 96.65 cf at 1 atm), though liquid helium tends to sell at a significant premium to the gaseous equivalent volume. The US Bureau of Land Management ("BLM") does, however, post prices at which they will sell crude gaseous helium from its reserves. A recent BLM auction (July 19, 2017) for 2018 helium allocations was released with helium priced at $112-$125USD/Mcf.

With approximately 60% share of global supply in 2015 (reserves found mostly in natural gas fields) the USA is the world's leading helium supplier, followed by Qatar with ~25%, according to the USGS. Algeria, Australia, Canada, Poland, and Russia are also producers. The current political situation in Qatar has brought into question the stability of global helium supply.

According to the USGS the global rate of helium consumption is greater than the rate global reserves are being replenished, which adds further uncertainty to the supply/demand cycle. There has been no viable synthetic alternative to helium developed other than recycling/recapturing helium which has traditionally been cost prohibitive. Adding further uncertainty to the helium market is the fact that the largest reserve of crude helium is owned and managed by the BLM. In 2013 the BLM announced that it would begin to auction off the reserve annually until it declined to 3.0 billion cubic feet. Depletion to this level is estimated by the USGS to occur in 2021 at that point the reserve would only supply U.S. government users which would remove a significant portion of existing capacity from the world market.

Applications

Helium is prized for its lifting properties, stability (Helium is the second least reactive element after neon) and its capacity as a super-coolant. As such helium has found major applications in:

  • Cryogenics - Magnet Resonance Imaging (MRI), Nuclear Magnetic Resonance (NMR) spectroscopy, particle accelerators, Large Hadron Collider, Superconducting Quantum Interference Device (SQUID), Electron Spin Resonance spectroscopy (ESR), Superconducting Magnetic Energy Storage (SMES), magnetohydrodynamic superconducting generators, power transmission, magnetic levitation transport, superconducting sensors, mass spectrometers, superconducting magnets, strong-field magnetic separator, toroidal field superconducting magnets for fusion reactors and other cryogenic research.
  • Aerostatics - used as lift gas for balloons; meteorological & telecommunications balloons, airships and blimps.
  • Welding - Helium is applied as a shielding gas in arc welding and plasma arc welding. The high ionization potential of helium enables the plasma arc welding of exotic metals such as titanium, zirconium, magnesium and aluminum alloys used in construction, shipbuilding, and aerospace.
  • Inner atmosphere operations - Helium is used as purging gas in the aerospace industry for space agencies like Arianespace and NASA. In some rockets, helium is used to maintain pressure in liquid oxygen fuel tanks. As liquid oxygen is burned as rocket fuel, helium is injected into the fuel tanks to keep them from collapsing.
  • Leak detection - Helium passes easily through the smallest leaks as it has among the smallest molecular sizes. During leak detection, an object is filled with helium, and in the case of a leak, a helium mass spectrometer will detect where the leak is located. Helium provides for detecting leaks in rockets, fuel tanks, heat exchanges, gas lines, various electronic devices, television tubes and other manufactured components.
  • Others: Semiconductors & Fiber optics manufacturing; Heat transfer medium in nuclear reactors; breathing mixtures.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term that is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

FORWARD LOOKING STATEMENTS: This news release contains forward-looking statements, within the meaning of applicable securities legislation, concerning RHC's business and affairs. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "intends" "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".

These forward-looking statements are based on current expectations, and are naturally subject to uncertainty and changes in circumstances that may cause actual results to differ materially. Although RHC believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that these expectations will prove to be correct. There are risks which could affect RHC's future results and could cause the results to differ materially from those expressed in these forward-looking statements.

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