Helios Energy (ASX: HE8): ‘Everything’s Bigger in Texas’, Presidio included

Helios Energy (ASX: HE8): “Drill baby, drill!”

Helios Energy is an oil and gas developer with an 80.5% working interest in the Presidio Oil Project in southwestern Texas, located in that state’s Presidio County. This project currently covers 7,877.8 leased net acres in the Marfa Sub-Basin of the world-famous Permian Basin. Between 2017 and 2022, Helios invested A$40m in Presidio, drilling four successful wells and gathering 2D and 3D seismic.

Check out our deep-dive report on HE8 HERE!

New team, higher ambitions

The current management team at Helios Energy was installed in late 2024 and that team believes the company has a rich new oil shale right at its feet, based on all the work the company has conducted to date as well as the porosity and permeability characteristics of the Ojinaga Shale formation. The maiden resource estimate for Presidio, announced in January 2025 (and accounting for Helios Energy’s 75% net revenue interest), reported a 1C Contingent Resource of 13.3 mmboe, rising to 17.5 mmboe at 2C and 21.7 mmboe at 3C.

Helios’s new directors have experience in oil and gas financing and the company has engaged renowned petroleum consultants W.D. Von Gonten Engineering to provide advanced technical expertise and assist forward plans. The new Managing Director, Philipp Kin, has a strategy for Presidio, which in our opinion has the potential to markedly re-rate Helios stock. It involves re-leasing the acreage covering known (identified and leased previously by Helios) areas with oil and gas Contingent Resources, where those leases had previously been allowed to lapse.

Watch our recent interview with Helios Energy CEO Philipp Kin!

More leases, more resource

The January 2025 resource estimate established a larger resource in the event entitlements are ‘suspended’ rather than ‘enforced’. The ‘entitlements suspended’ hydrocarbons are in zones that have not been leased by Helios. Under this scenario the 2C Resource is 140.6 mmboe. Helios Energy will seek to bringing the existing wells at Presidio back online to further demonstrate the oil and gas potential of the Project. There is also the potential to partner with experienced Permian Basin players, drilling new wells to further increase the Resource as part of a full field development plan designed with W.D. Von Gonten Engineering, and step out with more seismic and drilling to better define what Helios believes is a total play area of more than 100,000 acres.

Initial valuation range of 6.6 to 10.5 cents per share

Helios’ re-leasing programming allows an initial re-rating step. Even if HE8 continued to trade at modest EV/2C multiples, there would be enormous upside. Our base case assumes the company re-rates to 1.5x EV/2C on ‘entitlements enforced’ which would be ~$211m or $0.066 per share while our bull case assumes 2.4x which would be ~$337m or $0.105 per share.

Valuing Presidio on an acreage basis can increase value even further. Recent Permian Basin transaction values and acreage amounts suggested that US$18,000 per acre is a conservative figure. Assume as well that the reported ‘net acres’ represent Net Revenue Interests. Then apply that to Presidio Entitlements Enforced Acres and the Entitlements Suspended. The result is an Enterprise Value of A$132m today rising to A$1.16bn once the field is fully leased.

Disclosure: Helios Energy is a research client of Pitt Street Research and our directors own shares in the company.

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