Desert Mountain Energy Corp.

Company Data | Introduction | Projects in Hand | Management
News Update | Chinese

Company Data

Introduction

Desert Mountain Energy Corp. is a forward-looking resource company actively engaged in the exploration and development of Helium and Noble Gas properties in the U.S. Southwest. The Company is primarily looking for elements deemed critical to the renewable energy and high-technology industries.

Currently, the Company holds +85,000 acres land in Arizona, the world’s best address for Helium.The Company is advancing the McCauley Helium Field to initiate production in Q3 2022.

Helium plays a critical role in the manufacture of high capacity hard drives, barcode readers, computer chips, semiconductors, LCD panels and fibre optic cable; as a refrigerant in cryogenics research; and as a coolant for nuclear reactors, MRI machines and space vehicles. These technologies are all dependent on Helium. Analysts have forecast a raw helium shortage due to dwindling reserves with year-to-year prices having increased 135% in 2018. The Amur Complex explosion in Russia combined with the final helium sales, by the BLM auctioning of the Federal Helium Reserve in the US has resulted in a 300% increase in the crude helium price in 2022.

EXPLORATION

Holbrook Basin Helium Project

• Desert Mountain Energy is an early mover among junior explorers in the Helium space and is well positioned to participate in future growth of Helium in our high tech economy.
• The Holbrook Basin Helium Project comprises +85,000 acres of key Helium prospects under lease. Located in prolific Holbrook Basin in East-Central Arizona, widely considered to be the world’s best address for Helium and referred to as “The Saudi Arabia of Helium”.
• Two of the world’s richest historic producing helium gas fields, the Pinta Dome and Navajo Springs, are situated in this region. Historic production of 9.23 Billion Cubic Feet (Bcf) with exceptionally high grades of helium gas produced, ranging from 8%-10%, versus the industry benchmark of 0.3% to 1% for commercial grade.
• Successfully drilled 4 wildcat helium wells and 3 offsets
• All wells are financed with no debt and approximately CDN $12,000,000 in the treasury
• The Company signed the final contracts with GENRON for the construction of the McCauley Helium Field finishing facility with all-in costs of approximately US $10,500,000
• The Company plans to drill 5 offset and wildcat wells in 2022
• The Company has pre-ordered strategic components for the Rohlfing Helium Field finishing facility

The McCauley Helium Field

Wells #2, #4, #5, #6 & #7 will supply the initial feed to the helium processing facility along with another offset planned for September. All gas will be moved by truck, no pipelines needed.

Well #2

• Nitrogen 91.97%
• Helium 4.171%
• Hydrogen 3.832%
• CO2 0.019%

Discovery Well #4 (Chevlon Well 11-1)

• Flow rate of 1587 MCFGPD water-free
• The average gas analysis showed:
• Helium 1.137%
• Nitrogen 94.6536%
• Methane 3.1311%
• Ethane 0.2732%
• Carbon Dioxide (CO2) 0.1428%
• O2 0.6623%

Offset Wells #5, #6 & #7

• Average starting flow rates:
• Nitrogen 96.4689%
• Helium 3.511%
• CO2 0.0201%

The Rohlfing Helium Field

DME discovered significant helium percentages in two new wells:

State 10-1

• Flow rate of 24,214 MCFGPD
• The average gas analysis showed:
• Helium 7.1321%
• Nitrogen 77.0837%
• CO2 4.0183%
• Methane and other assorted minor gases. 2.6512%

State 16-1

• Flow rate of 1,251.2 MCFGPD
• The average gas analysis showed:
• Helium 4.0904%
• Nitrogen 90.2742%
• CO2 0.0063%
• Methane and other assorted minor gases. 3.5535%

Plan to Production

• Drill Wells #5, #6 and #7 in the McCauley Helium Field
• Drill wildcat Gunnar Dome Well
• Delivery and assembly of the McCauley Helium Finishing Facility
• Startup and production from wells #2, #4, #5, #6 and #7 in the McCauley Helium Field by the end of Q2 in 2022
• Optimize McCauley Helium Finishing Facility
• Drill additional wells
• Pre-order components for the Rohlfing Helium Field
• Bring on 60 to 70 new helium wells over a 5 year period

Investment Highlights

• The exploration and development of helium, hydrogen and noble gas properties in Northeastern Arizona
• Advancing the McCauley Helium Field to initiate production in Q3 2022
• World-Class technical team with decades of experience in the exploration and development of helium, hydrocarbons and other minerals.
• Excellent access to capital markets
• Sufficient Capital to complete the McCauley Helium Finishing Facility, drill offset and wildcat wells in 2022.
• Now trading on TSX Venture Exchange, U.S. OTCQX and Frankfurt. The Company has more value in place than ever before.
• Corporate philosophy that respects the environment, the community and education

Management

Management Team

Robert Rohlfing, Chief Executive Officer & Executive Chairman

Mr. Rohlfing is a seasoned oil & gas industry operations executive with a strong geological background and over 25 years experience in formulating, conducting and managing successful exploration, drilling, development and production programs for oil & gas and minerals worldwide.

Don Mosher, President & Director

Mr. Mosher has 35 years of experience in corporate finance, business development, management and marketing. He has served on boards and management teams of many publicly traded companies, advising companies on marketing, financing and corporate strategies.

Scott Davis, CPA, CGA, Chief Financial Officer

Mr. Davis is a partner of Vancouver-based Cross Davis & Company LLP Chartered Professional Accountants. Mr. Davis has extensive accounting and finance experience.

Jessica Davey, Vice President of Land & Director

Ms. Davey is an international oil and gas geologist with more than 10 years of experience in research and reporting on resource evaluation, environmental studies, feasibility reports, competent person reports, litigation support and mine closure procedures.

Marta Wasko, Vice President of Geology

Ms. Wasko has development, exploration, and operations experience including the Permian, the Denver Julesburg, the Uinta and Piceance Basins. Additionally, she has regulatory experience in mining, oil & gas, waste water and helium permitting and compliance.

Eric Witt, Drilling Operations Manager

Mr. Witt was previously the drilling engineer for Conoco Philips and Marathon Drilling.

James Hayes, Vice President of Engineering

Mr. Hayes has over 14 years of experience in engineering design and with on-site field operations in Oklahoma, Texas, Colorado, North Dakota and Alaska.

Ched Wetz, Vice President of Risk Management

Mr. Wetz has served as the director of risk management/facility ethics as well as compliance officer/safety officer at various hospitals, care centres and businesses.

Dr. James Cronoble, PhD (Geology), Vice President of Exploration & Director

Dr. Cronoble has more than forty years of exploration and operations experience in the Rocky Mountains and Mid-Continent of the United States.

Dr. Kelli Ward, Director

Dr. Ward has dedicated herself to medicine, business, public policy and politics for the past 25 years. In 2012, she ran and was elected for the Arizona State Senate. She was then elected Chair of the Republican Party of Arizona in 2019 and was re-elected in January 2021.

Jenaya Rohlfing, Director

Ms. Rohlfing is a Petroleum Engineer who has exhibited exceptional technical, leadership and organizational skills in all facets of drilling operations for oil & gas over the past 13 years in various management positions with ConocoPhillips.

Weldon Stout, Director

Mr. Stout recently retired from his position after serving for eight years as a District Court Judge in Oklahoma.

News Update

On June 19, 2023, Desert Mountain Energy Corp. has signed a binding letter of intent to purchase the Pecos Slope West Abo gas field and gas gathering system located in Chaves county, New Mexico. The company will close the purchase on June 30, 2023, from a privately held company and will immediately assume operations and revenue from the existing 188 gas wells and one water disposal well. Currently, there are no compression, helium processing or NGL (natural gas liquid) stripping facilities located on site nor are any of the wells on any type of artificial lift. This acquisition follows in line with the company's previously disclosed plans and use of proceeds to utilize its mobile modular and scalable helium processing plant design, where applicable, elsewhere in the United States to maximize shareholder value. The third party acquisition cost is $500,000 (U.S.) for the gathering system and $2-million (U.S.) cash for the wells.

The company will continue to review and seek strategic opportunities in this helium-bearing natural gas area.

On May 31, 2023, Desert Mountain Energy Corp. has continued to complete planned work as previously outlined, per the use of proceeds from the last financing. "The company is in an excellent financial position," said Robert Rohlfing, chief executive officer of Desert Mountain. "There is approximately $19.7-million cash on hand with significant percentages tied up in various guaranteed interest-bearing accounts."

The wells feeding the McCauley helium processing facility were swabbed down with no formation water being detected. The water removed showed signs that it was from drilling and completion operations and not from the targeted formations. A full-size helium gas tube trailer is on site for production rather than the smaller tanks for run-up testing.

On April 17, 2023, Desert Mountain Energy Corp. has closed on an additional 80 acres of surface property within the McCauley helium field which could be significant for future hydrogen and noble gas operations. The company was offered the property at $125 per acre for a cash deal. Offsetting acreage has been offered to the company for sale in excess of $1,250 per acre. The underlying mineral rights were previously held by the company.

The company has secured 50 per cent of the mineral rights under a portion of the South Winslow prospect. This would reduce the royalties paid to the aggregate mineral owners from 12.5 per cent to 6.25 per cent, under that acreage. The company continues to seek out opportunities to maximize the company's ultimate return to shareholders.

The company will have a rig to swab the wells in the McCauley helium field by the middle of the week and has acquired additional trucks and trailers as outlined under the use of proceeds in the short form prospectus.

On April 05, 2023, Desert Mountain Energy Corp. is in the final stage of development that will lead to commercial production. The recently completed financing will allow the company to build all the infrastructure necessary and complete the start-up work necessary to bring six helium wells into production. The McCauley helium processing facility (MHPF) is operational. Nitrogen and atmospheric air were injected into the facility at 250 psi (pounds per square inch) to 500 psi, and it successfully isolated all of the component elements. Nitrogen was vented off and other elements were separated during the process with trace amounts of helium identified at the end of the processing test.

The company is pleased to announce that Ms. Farley has accepted the role as the next CFO of Desert Mountain Energy. Ms. Farley is a CPA with experience in power generation and distribution, natural resources, regulatory and financial reporting, audits, and real estate development. Scott Davis will continue to administer the Canadian-side reporting, financial and audits to assure a smooth transition over the next number of months.

On April 04, 2023, Effective at the opening, Thursday, April 6, 2023, 545,000 common share purchase warrants of the company will commence trading on the TSX Venture Exchange. The company is classified as a mineral exploration/development company.

On March 31, 2023, Desert Mountain Energy Corp., further to its news release on March 24, 2023, announcing the closing of its best-efforts public offering of units, Beacon Securities Ltd. has fully exercised the remainder of its overallotment option to sell an additional 545,000 units of the company at a price per overallotment unit of $1.95 for gross proceeds of $1,062,750, and aggregate gross proceeds of $23,097,750 for the total offering.

On March 29, 2023, Desert Mountain Energy Corp. has noted that 11.3 million common share purchase warrants of the company, issued pursuant to its short-form prospectus dated March 20, 2023, will commence trading on TSX Venture Exchange at the opening Friday, March 31, 2023.

Warrant exercise price/term: $2.70 per common share to March 24, 2025, subject to acceleration

Transfer agent: TSX Trust Company

Trading symbol: DME.WT

CUSIP No.: 25043D123

On March 27, 2023, Desert Mountain Energy Corp.'s board of directors has approved, effective today, the adoption of an advance notice policy that requires advance notice to the company in circumstances where nominations of persons for election to the board of directors are made by shareholders of the company other than pursuant to: (i) a requisition of a meeting made pursuant to the provisions of the British Columbia Business Corporations Act; or (ii) a shareholder proposal made pursuant to the provisions of the act.

On March 27, 2023, Desert Mountain Energy Corp. has successfully re-entered well No. 3. After running cement bond log (CBL) to verify that all water courses were protected via multiple strings of casing, previously set and cemented in December, 2020, the company then deepened the well into the Precambrian granite. The casing was set and cemented, and a cased hole log was run to verify cement. Cementing procedures were done in accordance with company practices; this includes circulating cement to the surface on multiple strings to ensure protection and segregation between formations. Desert Mountain Energy understands the importance of protecting aquifers. The company chooses to exceed Arizona Oil and Gas Conservation Commission regulations by setting more casing and cementing it to the surface. These additional measures add in excess of $200,000 per well on deeper wells. Completion rig availability to finish and test zones will determine when the well can be sampled.

"Mass spectrometer readings did show both hydrogen and helium in different zones without any mass-spec delineations of sulphur and no additional water zones were encountered under previously set and cemented casings," said Robert Rohlfing, chief executive officer of Desert Mountain. "After sampling well No. 3 a decision will be made on whether it is compatible with the McCauley helium processing facility, and if so, transported there to increase the throughput once in operation."

On March 24, 2023, Desert Mountain Energy Corp. has closed its previously announced best efforts public offering of 11.3 million units of the company at a price of $1.95 per unit for gross proceeds of $22,035,000, which includes the partial exercise of the overallotment option. The Company entered into an agency agreement (the "Agency Agreement") with Beacon Securities Limited (the "Agent") to sell the Units on a commercially reasonable best efforts agency basis.

On March 21, 2023, Further to Desert Mountain Energy Corp.'s news releases of March 2 and March 3, 2023, the company has filed and obtained a receipt for the final short form prospectus in connection with its previously announced best efforts public offering of a minimum of 5,128,500 units of the company and a maximum of 10.3 million units at a price of $1.95 per unit for minimum gross proceeds of $10,000,575 and maximum gross proceeds of $20,085,000. The company has entered into an agency agreement with Beacon Securities Ltd. to sell the units on a commercially reasonable best efforts agency basis.

On March 14, 2023, Generon has completed its work on Desert Mountain Energy Corp.'s McCauley helium processing facility. The initial sale will be going to an Arizona-based industrial gas supplier, which is supplying its own trailer. The company expects to work through various combinations of gas mixtures, concentrations and final product purity levels over a 90-day period. The industrial gas purchaser understands that the first deliveries will be a mixture of different final grades of helium ranging from a low of 99.995 per cent to a high of 99.99995 per cent.

On March 03, 2023, Desert Mountain Energy Corp. has released the terms of its previously announced marketed public offering of units in the capital of the company. The company intends to issue up to 10.3 million units at a price of $1.95 per unit, for aggregate gross proceeds of up to $20,085,000. Beacon Securities Ltd. is acting as sole agent in connection with the offering. Each unit will consist of one common share in the capital of the company and one common share purchase warrant of the company. Each warrant will entitle the holder thereof to acquire one common share at a price per warrant share of $2.70 for a period of 24 months following the closing date.

The company intends to use the net proceeds of the offering for continued drilling and exploration, the purchase of infrastructure to support the McCauley facility and the purchase of a second helium facility, as well as other corporate purposes, and for general and administrative expenses.

On March 02. 2023, Desert Mountain Energy Corp. has launched a marketed public offering of units in the capital of the company, at a price to be determined in the context of the market, for gross proceeds of up to $20-million. Beacon Securities Ltd. is acting as sole agent in connection with the offering. Each unit will consist of one common share in the capital of the company and a number of common share purchase warrants to be determined in the context of the market. Each warrant will entitle the holder thereof to acquire one common share in the capital of the company at terms to be determined in context of the market.

On February 27, 2023, Desert Mountain Energy Corp. has completed high-pressure testing of all the processing facility components and has powered up the facility through the compressed natural gas (CNG) generators. The McCauley helium processing facility will transition to solar energy upon the arrival of the battery storage units.

Desert Mountain Energy has identified a few items which could possibly affect processing during elevated summer temperatures. Generon is resolving this by fabricating the appropriate pieces and installing them within 10 to 14 days to resolve any issues.

"We are pleased with the excellent job performance and on-site fabrication services that our installation crews did for us since taking delivery of the plant," said Robert Rohlfing, chief executive officer of Desert Mountain Energy. "Working through the final details on a project that is this complex is time consuming but necessary."

On February 22, 2023, Desert Mountain Energy Corp. has signed a letter of agreement to purchase raw or crude helium gas from PetroSun, subject to approval by the company and available processing capacity at the anticipated date of delivery. The agreement calls for pricing to be set based on market pricing conditions at the time of purchase and the gaseous chemical composition of the raw or partially processed gas. This agreement does not call for, nor shall it be interpreted as, a dedication of helium percentages or volumes from any PetroSun well(s) to any specific current or future Desert Mountain Energy processing facility. The company has agreed to consider opportunities to explore for hydrogen on PetroSun leaseholds.

The company has further agreed to co-operate and assist PetroSun with future exploration for both helium and hydrogen, where feasible, for seismic testing and other geophysics, in order to lower overall costs. The company feels that when applicable, it will assist in securing rig availabilities, and trucking, coupled with other testing and operational aspects.

On February 21, 2023, Desert Mountain Energy Corp. has been granted an exemption to the 640-acre spacing requirements allowed by the State of Arizona. This exemption will allow the Company to drill wells on 40 acres of spacings as opposed to the usual 1 well per section that is the normal practice allowed by the Arizona Oil and Gas Commission. Flow lines for the 3 proposed hydrogen wells have been trenched and buried to transport the raw gaseous mixture for separation at the McCauley Processing Facility. The plant design allows for the hydrogen to be separated from the other elements while at the same time allowing the capture of both helium and hydrogen for purification. The 640-acre spacing exemption allows DME and Beam Earth Ltd. to explore and better optimize hydrogen and helium discoveries in upper possible formations.

On January 30, 2023, Desert Mountain Energy Corp. has leased an additional 15,600 acres situated on indicated structural traps for helium. With this acreage, combined with the previously announced 8,023 acres, Desert Mountain Energy has increased its Arizona holdings by more than 18 per cent and over 100,000 acres. The company continues to remain focused on its Arizona properties whilst evaluating long-term expansion opportunities. The company has either acquired or made agreements for surface property to support future required possible production facilities.

On January 19, 2023, Desert Mountain Energy Corp. reported that on Jan. 17, 2023, the company held a commissioning ceremony for the McCauley helium processing facility. A ribbon-cutting ceremony was performed by Robert Rohlfing, chief executive officer and executive director of Desert Mountain Energy. The company's management, directors, legal and accounting, along with the McCauley family and members of the investment community, were in attendance.

On January 11, 2023, Desert Mountain Energy Corp. has elected to exercise its option to lease an additional 8,023 acres in Arizona. The company's geologic team identified the structural highs on the additional acreage based on geophysical data. Along with intact helium traps, structural highs are essential to drilling a successful helium well. "Desert Mountain Energy will continue to acquire additional land based on desired geological modelling," said Robert Rohlfing, chief executive officer. "We expect to have more land acquisitions to announce in 2023."

Initial production garnered from any wells on this acreage would be handled by the McCauley helium processing facility. The company has acquired surface property to support all future production facilities.

On December 15, 2022, Desert Mountain Energy Corp. has noted that three of the four components which house the McCauley helium processing facility arrived on site on Dec. 13, 2022, and were set into place on Dec. 14, 2022. The fourth component is in transit and will be set upon arrival.

"The McCauley helium processing facility has been designed with a great deal of flexibility allowing for a wide range of pressures, flow rates and helium percentages," said Robert Rohlfing, chief executive officer of Desert Mountain. "Powered primarily by solar power, this is the first plant of its kind in the world. The company plans to duplicate this design to expand into other areas with large diversions of helium grades. Adding additional components will enable future facilities to handle more complex raw gas mixtures that may be encountered. The Rohlfing helium field gas would be an example of this."

December 13, 2022, Desert Mountain Energy Corp. has successfully completed its wildcat well on the Gunnar Dome prospect. As previously announced, the Company made the decision to test multiple zones in the well to have a better understanding of the localized geology with regard to future drill locations. A total of seven zones were perforated, tested, then squeezed off and bridge plugs were set to ensure complete closure. Many of the zones had gaseous mixtures which the McCauley processing plant is not currently set up to extract. The two sections which were perforated for production are within the same geologic formation and are separated by an impermeable layer with similar pressure. Both zones were perforated in a manner to stay within an area of only connate formation water values. Water-free or near-water-free Helium production is a continuing Company goal.

December 07, 2022, Testing of Desert Mountain Energy Corp.'s McCauley helium processing facility has been completed. The temporary interconnect lines are being removed and modular units are ready for transport. Desert Mountain currently expects to have all of the units on site by Dec. 16, 2022. All necessary equipment, such as cranes, has been scheduled to be on site to lift the modular housing onto the prepared foundations. Commissioning of the facility is planned for January, 2023.

On November 29, 2022, Desert Mountain Energy Corp. has acquired 40 acres of land for its South Winslow prospect. This land not only provides property to place initial processing equipment but more importantly, provides surface and Right of Way access to multiple, land-locked, state properties that the company wishes to develop.

On November 11, 2022, Desert Mountain Energy Corp. announced its plant build contractor, GENERON, is completing assembly and will begin testing of the plant by 11/18/2022. It is expected that the testing of all modular units will be completed by 11/29/2022. Once testing is completed, any issues which may arise during testing will be addressed before the final runup test prior to shipping.

The infrastructure for the McCauley Helium Processing Facility is completed and awaiting delivery of the four modular housing units containing all the components necessary to finish helium to end-user specifications. Site preparation included fencing, road work, gravel foundation, flow line trenching and installation. The plant will initially use natural gas generators to power the unit. DME has taken delivery of the solar panels; battery storage will be delivered in the new year.

On October 21, 2022, Desert Mountain Energy Corp. has granted a total of 815,000 incentive stock options at an exercise price of $2.35 per share to its directors, officers, employees, and consultants. The options will be issued to newly appointed directors, officers, and the accounting and legal teams. The options will be subject to the Company’s vesting plan. The options will be exercisable for a period of 5 years.

On October 03, 2022, Desert Mountain Energy Corp. announced that it has signed a Joint Operating Agreement (JOA) with Beam Earth Ltd. The JOA initially encompasses the shallow hydrogen zones found while drilling in the McCauley helium field. The agreement provides for the Company’s continued ability to remain focused on its helium prospects, whilst utilizing Beam Earth ltd. expertise in hydrogen. Furthermore, this agreement provides the basis for opportunities for other JOA’s with Beam in jurisdictions outside of Arizona.

On June 28, 2022, Desert Mountain Energy Corp. announced that due to general negative market pressures over the weeks, and a corresponding reduction in Desert Mountain Energy Corp.'s trading price, the Company will be reducing the per-unit price of the private placement announced June 8 and June 21, 2022.

The price per unit of the private placement will be reduced from $3.00 per unit to $2.50 per unit. All other terms and conditions of the private placement will remain the same.

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