Noble Helium (ASX: NHE) has entered into a binding agreement to acquire 100% of the issued share capital of Earth Source Hydrogen (ESH), a company holding prospective exploration acreage in Western Australia.

Incorporated in England and Wales, ESH has secured two large onshore exploration Special Prospecting Authorities (SPAs) in Western Australia — SPA-47 AO and SPA-44 AO — covering approximately 40,000 square kilometres in total, with the exclusive right to apply for an exploration licence in each SPA area. An extensive water bore hole sampling and testing program has been completed at both SPAs.

Special Prospecting Authorities are granted under Western Australia's petroleum legislation and allow preliminary appraisal of an area ahead of a formal exploration licence application. Bore water sampling is a common early-stage screening tool in helium exploration: because helium is an inert, mobile gas that can dissolve in groundwater and migrate along geological structures, concentrations measured in existing water bores can provide an indication of a subsurface helium source before any drilling is undertaken.

Noble Helium executive chairman Dennis Donald said a detailed independent analysis and evaluation of the bore hole samples will be undertaken, and a summary of results will be provided to the market in due course following completion of the acquisition and assessment of the samples.

"The combined helium exploration portfolio of Noble Helium and ESH is compelling," Mr Donald said.

"ESH gives us exposure to a large and highly prospective helium exploration acreage in Western Australia that complements our existing Tanzania project where drilling preparations are underway at Kinambo.

"The framework for the exploration and development of helium in Western Australia follows the familiar petroleum model, and with helium in such high demand globally, the acquisition of ESH is a timely investment in Noble Helium's long-term future and international aspirations."

That demand reflects helium's use across applications with few practical substitutes, including cooling magnets in MRI scanners, semiconductor and fibre-optic manufacturing, purging rocket propulsion systems and cryogenic research. Global supply is concentrated in a small number of producing countries — including the United States, Qatar, Algeria and Russia — and periodic supply shortfalls have encouraged explorers to pursue new sources in other jurisdictions.

Noble Helium holds assets in Tanzania's East African Rift System, where the company's North Rukwa project is considered to have significant potential. The rift system has drawn helium exploration interest in recent years after naturally occurring helium seeps were documented in the region.

ESH Managing Director David Biggs said ESH views the combination with Noble Helium as benefiting both companies, with each bringing complementary acreage and technical skills to the merger.

"ESH is excited about the prospectivity it has worked up in each of its two Western Australia SPAs and looks forward to moving to apply for an exploration permit in each SPA."

NHE was down 3.57% to 2.7¢, with a market capitalisation of $34.91 million.

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