Helium Evolution Announces $8.3 Million Convertible Note to Fund Soda Lake Helium Production Facility and Drilling Campaign
CALGARY, Alberta, Aug. 26, 2025 (GLOBE NEWSWIRE) -- Helium Evolution Incorporated (TSXV:HEVI) ("HEVI" or the "Company"), a Canadian-based helium exploration company focused on developing assets in southern Saskatchewan, is pleased to announce that it has entered into an agreement with ENEOS Xplora Inc. ("ENEOS Xplora") through its affiliated company, ENEOS Xplora USA Limited ("ENEOS USA"), pursuant to which ENEOS USA has agreed to purchase a convertible note with a face value of $8.3 million (the "Note"). This investment will bring ENEOS Xplora's total investment in the Company to $12.8 million. ENEOS Xplora and ENEOS USA are both wholly owned subsidiaries of ENEOS Group, Japan's largest energy, resources and materials conglomerate with current revenue of $91 billion USD.
Proceeds from the Note will be used to fund HEVI's 20% working interest in the helium processing facility in the Mankota area, located at 1-2-4-9W3 (the "Soda Lake Facility"), as announced on May 27, 2025. The Soda Lake Facility is expected to be operational in the fourth quarter of 2025 and will initially tie in three helium wells through a dedicated pipeline gathering system. In addition, the Note proceeds will fund HEVI's drilling of new wells and related development activities in the Mankota area, with a winter drilling campaign anticipated to commence in the fourth quarter of 2025 and continue into the first quarter of 2026.
"We are very pleased to secure this strategic financing, which will allow us to fund our working interest in the Soda Lake Facility and advance our drilling campaign in the Mankota area," said Greg Robb, President and CEO of HEVI. "This financing not only strengthens our balance sheet but also positions HEVI to transition into a near-term producer of helium. The upcoming Soda Lake Facility is a cornerstone project that will provide stable processing capacity and create significant growth opportunities for our shareholders."
This expanded financing marks an important achievement in HEVI's strategic growth trajectory within the helium sector, further strengthening the Company's financial foundation and unlocking new opportunities for both HEVI and ENEOS Xplora. The deal underscores HEVI's increasing momentum and its position as a leader in the Canadian helium market.
The Note financing is expected to close on August 29, 2025, subject to requisite approvals, and is convertible into common shares of HEVI, subject to automatic conversion upon achievement of defined milestones (the "Milestones") and in accordance with TSX Venture Exchange ("TSXV") policies at a minimum price of $0.205 per share.
If the Milestones are not achieved by August 29, 2026, ENEOS USA will have the right, at any time thereafter, to convert the Note into common shares at a minimum price of $0.205. The Note will mature on August 29, 2027 (the "Maturity Date") and will accrue interest at a rate of 8.5% per annum, payable in arrears on the Maturity Date.
Additionally, HEVI has granted ENEOS USA a gross overriding royalty ("GORR") on HEVI's share of production from the three wells being tied into the Soda Lake Facility: 9-35-3-9W3, 10-36-3-9W3, and 10-1-4-9W3 (the "Designated Wells"). The GORR is structured as a sliding scale:
5% of HEVI's gross sales in the first year of production;
4% of HEVI's gross sales in the second year;
3% of HEVI's gross sales in the third year; and
2% of HEVI's gross sales thereafter.
HEVI will also grant ENEOS USA a 3% GORR on HEVI's share of gross sales from one of the next three wells to be drilled in the Mankota area (the "New Well"), to be selected by ENEOS USA within 90 days of receipt of drilling and testing results.
Issuance of the Note and the GORR constitute "related party transactions" under Multilateral Instrument 61-101 - Protection of Minority Securityholders in Special Transactions ("MI 61-101"). The Company intends to rely on the financial hardship exemption from the valuation and the minority approval requirements of MI 61-101 provided for in subsections 5.5(g) and 5.7(e) of MI 61-101, respectively. The participation by ENEOS USA in the financing has been approved by directors of the Company who are independent in connection with such transactions.
About ENEOS Xplora
ENEOS Xplora is engaged in the development and production of oil and natural gas in Japan and around the world as one of the principal operating ...
