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Be the first with the news that moves the market- Desert Mountain Energy Corp (TSXV:DME) is pushing ahead on its helium projects, despite the recent global volatility disrupting the gas’s value substantially
- The company is still maintaining its two current helium projects in the US, but the COVID-19 pandemic has pulled the helium price down after years of trending upward
- The price drop was caused by demand dipping to meet the traditionally short supply of global helium
- Desert Mountain believes this recent price-drop will be short-lived and that instability in the oil and gas industry may help improve the company’s expenditures in the coming months
- Desert Mountain Energy Corp (DME) is down 10.81 per cent, with shares trading for C$0.16 and a market cap of C$7.26 million
Desert Mountain Energy Corp (TSXV:DME) is pushing ahead on its helium projects, despite recent global volatility disrupting the gas’s value substantially.
The ongoing COVID-19 crisis and its accompanying global economic downturn have dragged the price of helium down since the start of the year.
Before recently, helium prices had been trending up steadily as demand for the product outweighed global production.
However, the recent global economic downturn has brought demand back in line with supply and as a result the helium price has begun to drop.
The company has noted a steep downturn in party balloons and diving gas sales, two key helium sectors. However, helium sales in the technology sector, where it is used in hard drive and semiconductors, remains steady.
Like most commodity prices suffering in the wake of the pandemic, Desert Mountain believes helium will recover quickly, once the situation abates.
As a result, the company is continuing to progress it helium-targeted drill programs in Arizona and Oklahoma.
Helium is most often produced as a by-product of the oil and gas industry, not directly through targeted drilling.
With this in mind, Irwin Olian, CEO of Desert Mountain, believes that further global instability caused by recent oil crash, will ultimately work in the company’s favour.
“We are in a very strong position unlike many helium producers who are focused on secondary production.
“The debacle in the oil and gas industry is already having the effect of reducing drilling and exploration costs. This will work to our advantage by reducing costs of our upcoming drill program,” he said.
Irwin went on to say that the company looks forward to the end of the COVID-19 crisis and will continue to progress the company, despite the present challenges.
Desert Mountain Energy Corp (DME) is down 10.81 per cent, with shares trading for C$0.16 at 11:31am EST.
