Brian Zinchuk is editor and owner of Pipeline Online
Royal Helium’s first well, Climax-1, in January, 2021. Photo by Brian Zinchuk
TORONTO – Royal Helium, which has spent several years trying to develop a helium play in southwest Saskatchewan and southeast Alberta, has filed for bankruptcy.
Four years ago, Royal Helium was the second most-active company in Saskatchewan’s burgeoning helium play. And there have been very few players in that field. North American Helium has been far and away the leader. It had been followed by Royal. Helium Evolution has partnered on several wells with North American Helium. And that’s about it, for companies actively drilling.
As Pipeline Online Ltd. is listed as one of the creditors, papers regarding the insolvency were received by mail on Feb. 10.
Law firm Doane Grant Thornton wrote that on Jan. 17, Royal Helium Ltd. had filed a Notice of Intention (NOI) To Make a Proposal, pursuant to the Bankruptcy and Insolvency Act. The NOAI was filed in Toronto.
The documentation lists 43 creditors owed a cumulative total of $18,976,882.54. The list includes a number of people who had worked in senior management, including former CEO Andrew Davidson. Last fall he and a number of other senior people left the company as new management took over.
The two largest creditors, by far, are the Business Development Bank of Canada and Canadian Western Bank, each owned $8,692,433. Those two banks made up 91.6 per cent of the money owned. The next highest claim account was for $250,000 to an individual person.
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The amount owing to some of the senior staff ranges from the thousands to in excess of $100,000.
Royal drilled its first well at Climax, Saskatchewan, in January, 2021. A photo of that well forms the masthead of Pipeline Online’s web page. It drilled several more wells there, followed by two northwest of Ogema, and then at Val Marie. The company bought Imperial Helium, which had a property drilled near Steveville, Alberta, ready to develop. It built and brought online its first helium processing facility there in 2023, but helium production numbers clearly did not make the company profitable, as evidenced by the insolvency.
In April of 2024, the company announced that Sparrow Hawk Developments Ltd., the economic development arm of Peepeekisis Cree Nation, taking a non-operating stake in the helium development at Val Marie. That didn’t appear to go very far, and neither are listed as a creditor.
In September, 2024, there was a major shakeup in management, as mentioned above.
According to Yahoo Finance, Royal Helium’s stock as of Feb. 7 was $01.4, as in 1.4 cents and a market cap of $5.1 million. On March 23, 2021, it was 64 cents.
A press release dated Jan. 24 said, “Royal Helium Ltd. (TSXV: RHC) (OTCQB: RHCCF) (“Royal”) announces today that Royal and its subsidiaries, Royal Helium Exploration Limited and Imperial Helium Corp. (together with Royal, the “Company”), have cancelled the previously announced proposed private placement offering of debenture units of the Company previously announced on December 2, 2024 (the “Private Placement”).
“On January 20, 2025, the Company announced its notice of intention to make a proposal under the Bankruptcy and Insolvency Act (the “BIA”). The Company had previously been pursuing an out-of-court restructuring solution. However, following review of all financing options and careful consideration of all available alternatives, and consultation with legal and financial advisors, the directors of the Company determined that it was in the best interests of the Company and its stakeholders to file for protection under the BIA and to cancel the previously announced proposed Private Placement offering.”
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