🍎Compare the key points from the March 2024 quarter report against the June 2024 quarter report to highlight the main developments and changes.
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Cash Position:
- March 2024: A$3.714 million
- June 2024: A$1.225 million
The cash position decreased significantly over the quarter.
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Voyager Project:
- March 2024: Paused development due to anomalous flow and pressure results from BBB #33 and Bolling #4 SESW wells.
- June 2024: No significant updates mentioned, suggesting the project remained paused.
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Financials:
- Both quarters reported zero debt.
- June 2024 saw increased exploration and evaluation costs, likely due to the State 16 well drilling.
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Galactica/Pegasus Project:
- March 2024: Planned to drill a maiden development well (State 16 SWSE 3054) in Q2 2024.
- June 2024: Successfully drilled the State 16 well, confirming a significant helium discovery with up to 1.90% helium concentration.
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Serenity Project:
- March 2024: Not mentioned.
- June 2024: Blue Star increased ownership to 100% and selected an initial small-scale, low capex development targeting first CO2 production from H1 2025.
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Corporate Strategy:
- March 2024: Focused on evaluating various development pathways for Galactica/Pegasus.
- June 2024: Continued focus on Galactica/Pegasus development, with added emphasis on CO2 production from both Galactica/Pegasus and Serenity.
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Well Permitting:
- March 2024: 11 helium development locations approved for drilling at Galactica/Pegasus, with 4 finally approved.
- June 2024: 10 helium development locations approved, with 3 fully approved. Additionally, filed for 5 new development wells (OGDP I).
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Acreage:
- March 2024: 325,214 gross (235,522 net) acres
- June 2024: 328,367 gross (235,782 net) acres
A slight increase in acreage over the quarter.
In summary, the June quarter saw significant progress at the Galactica/Pegasus project with the successful drilling of State 16, a new focus on the Serenity project for CO2 production, and continued development planning. However, the cash position decreased substantially, likely due to the increased exploration and development activities.
🤑Operational costs.
Analyze the operational costs for both quarters based on the information provided in the Appendix 5B cash flow reports. We'll compare the March 2024 quarter with the June 2024 quarter.
- Exploration & Evaluation Costs:
- March 2024: A$1,000 (expensed)
- June 2024: A$0 (expensed)
There was a slight decrease in expensed exploration costs.
- Production Costs:
- March 2024: A$21,000
- June 2024: A$158,000
There was a significant increase in production costs.
- Staff Costs:
- March 2024: A$401,000
- June 2024: A$430,000
Staff costs increased slightly.
- Administration and Corporate Costs:
- March 2024: A$168,000
- June 2024: A$392,000
Administration costs more than doubled.
- Capitalized Exploration and Evaluation Costs:
- March 2024: A$2,313,000
- June 2024: A$979,000
There was a significant decrease in capitalized exploration costs.
- Payments to Acquire Tenements:
- March 2024: A$41,000
- June 2024: A$123,000
Costs for acquiring tenements increased.
- Property, Plant and Equipment Acquisition:
- March 2024: A$194,000
- June 2024: A$40,000
Spending on property, plant, and equipment decreased.
- Payments to Related Parties:
- March 2024: A$112,000
- June 2024: A$123,000
Slightly increased.
Overall observations:
- Total operating cash outflow (excluding investing activities):
- March 2024: A$573,000
- June 2024: A$973,000
Operating cash outflow increased by about 70%.
- Total investing cash outflow:
- March 2024: A$2,548,000
- June 2024: A$1,142,000
Investing cash outflow decreased by about 55%.
- The company shifted from higher capitalized exploration costs in March to higher production and administration costs in June, possibly reflecting the transition from exploration to development activities, particularly at the Galactica/Pegasus project.
- The increase in production costs and administration costs in the June quarter might be related to the drilling and evaluation of the State 16 well at Galactica/Pegasus.
- Despite lower capitalized exploration costs, the overall cash burn increased due to higher operational expenses, contributing to the significant decrease in cash position from A$3.714 million to A$1.225 million over the quarter.
These changes in operational costs reflect the company's shift in focus towards development activities, particularly at the Galactica/Pegasus project, while also incurring higher administrative costs possibly related to project management and evaluation.
🚸Review of Operational Costs
To accurately review Blue Star Helium's operational costs based on the most recent quarterly reports, we'll focus on the detailed costs outlined in the reports from March 2024 and June 2024.
Key Financial Highlights as of 31 March 2024 (Previous Quarter):
- Cash Balance: AUD 3.714 million
- Expenditures:
- Exploration & Evaluation: AUD 1,000
- Staff Costs: AUD 401,000
- Administration and Corporate Costs: AUD 168,000
- Total Cash Used in Operating Activities: AUD 573,000
- Net Cash Used in Investing Activities: AUD 2,548,000
Key Financial Highlights as of 30 June 2024 (Current Quarter):
- Cash Balance: AUD 1.225 million
- Expenditures:
- Exploration & Evaluation: AUD 979,000
- Staff Costs: AUD 430,000
- Administration and Corporate Costs: AUD 392,000
- Total Cash Used in Operating Activities: AUD 973,000
- Net Cash Used in Investing Activities: AUD 1,142,000
Breakdown of Operational Costs
- Exploration & Evaluation Costs:
- March 2024: AUD 1,000
- June 2024: AUD 979,000
- Increase: This significant increase reflects heightened exploration activities, likely due to drilling and evaluation of new wells.
- Staff Costs:
- March 2024: AUD 401,000
- June 2024: AUD 430,000
- Increase: AUD 29,000, indicating either an increase in staff or additional costs related to employee activities.
- Administration and Corporate Costs:
- March 2024: AUD 168,000
- June 2024: AUD 392,000
- Increase: AUD 224,000, reflecting higher administrative expenses which could include regulatory costs, office expenses, or other corporate overheads.
- Total Cash Used in Operating Activities:
- March 2024: AUD 573,000
- June 2024: AUD 973,000
- Increase: AUD 400,000, demonstrating an overall increase in operational activities and associated costs.
Observations:
- Significant Increase in Exploration & Evaluation Costs:
- The large jump from AUD 1,000 to AUD 979,000 indicates substantial investment in new drilling and exploration efforts.
- Moderate Increase in Staff Costs:
- The increase in staff costs suggests a stable workforce with potential additional hiring or increased activity costs.
- High Increase in Administration Costs:
- The administration costs more than doubled, indicating increased corporate activities, possibly due to expanded operations or regulatory compliance requirements.
Financial Summary:
- Cash Balance Decrease:
- Operational Costs:
Conclusion: