Big Sky Industrial Inc. Common Stock (NASDAQ:BSIN) outlined plans to begin commercial helium sales from its Montana-based Phase 1 project in the first quarter of 2027, with construction underway and a remaining EPA sequestration permit among the key milestones before startup.
Speaking at Noble Capital Markets’ Emerging Growth Virtual Equity Conference, President, Chief Executive Officer and Director Ryan Smith said the company has shifted from its historical oil-and-gas focus toward a helium production, carbon management and energy infrastructure business centered on the Big Sky Carbon Hub.
Phase 1 Plans and Revenue Streams
Smith said Phase 1 is expected to produce from an estimated industrial-gas resource of approximately 1.3 billion cubic feet of helium and nearly 500 billion cubic feet of carbon dioxide. He said the first phase is expected to capture and sequester about 125,000 metric tons of CO2 annually.
The planned business model includes three connected sources of revenue:
- Helium sales through a long-term offtake agreement.
- Carbon capture, utilization and sequestration tax credits under Section 45Q.
- Incremental oil production from injecting a portion of captured CO2 into the company’s existing oil-field reservoir.
Under the plan described by Smith, most CO2 produced through helium processing would be permanently sequestered underground. A smaller amount would be transported about 15 miles to the Cut Bank oil field, where it would be injected to build reservoir pressure and support additional oil recovery.
Smith said the company expects the Phase 1 project to provide an approximately $15 million annualized EBITDA lift once operating. He also said the company estimates its legacy oil reserves have a present value of roughly $25 million to $30 million, while placing a $115 million net present value estimate on Phase 1.
Helium Offtake Agreement
Big Sky has signed a five-year, 100% take-or-pay agreement covering Phase 1 helium production with what Smith described as the world’s largest industrial gas company. The counterparty was not named during the presentation.
The agreement provides for a base helium price of $285 per thousand cubic feet for five years, with annual CPI-linked escalation beginning in 2028 and a pricing redetermination after the third year. Smith said the contract includes an annual commitment of approximately 14.5 million cubic feet of helium.
According to Smith, the stated price is an all-in plant-gate price because the offtake partner assumes transportation, tolling and liquefaction-capacity costs. He said those expenses can range from $150 to $300 per thousand cubic feet for other helium suppliers.
Smith said the company views the agreement as validation of the project after due diligence by a large, investment-grade counterparty. He added that the company believes its Montana location provides favorable access to markets through nearby interstate highways, rail lines and roads.
Funding and Carbon Credit Monetization
Smith said Big Sky considers Phase 1 fully funded through a March common-equity raise and a project-finance debt facility. He said the company forecasts net leverage of about one times following the Phase 1 buildout.
The company expects its first phase to generate an estimated $130 million pool of Section 45Q carbon capture tax credits. Smith said the credits are tied to a federal incentive of $85 per metric ton of CO2 sequestered, escalating 3% annually for 12 years.
Big Sky is awaiting one EPA permit related to its sequestration activities. Smith said the application process has been collaborative and that the company expects approval in 2026, potentially before year-end. He said the permit would allow the company to pursue forward sales of tax credits.
Smith estimated that monetizing the initial tax-credit pool could bring forward between $70 million and $95 million of non-dilutive cash. He said that capital could be used to fund additional processing capacity and development rather than relying heavily on future equity issuance.
Next Milestones
Looking ahead, Smith identified the remaining EPA permit, tax-credit monetization, Phase 1 commercial startup and a final investment decision on Phase 2 as major milestones for the next 12 to 18 months.
The company has already begun planning for a second processing phase, Smith said. Rather than being constrained by available gas resources, he said Big Sky’s expansion potential will depend primarily on how much processing and infrastructure it can install. As additional phases are added, Smith expects industrial-gas revenue to become a larger share of the company’s overall business relative to oil.
Smith said directors, insiders and certain board members collectively own about 27% of the company’s common stock. He also said the company has no options, warrants or preferred equity in its capital structure.
About Big Sky Industrial Inc. Common Stock (NASDAQ:BSIN)
U.S. Energy Corp., an independent energy company, focuses on the acquisition, exploration, and development of oil and natural gas properties in the United States. It holds interests in various oil and gas properties located in the Rockies region, including Montana, Wyoming, and North Dakota; the Mid-Continent region comprising Oklahoma, Kansas, and North and East Texas; West Texas; South Texas; and the Gulf Coast regions. The company was incorporated in 1966 and is headquartered in Houston, Texas.
