When I see a penny stock that’s down 92% in five years, I don’t instantly think ‘opportunity’. But when analysts expect the stock to gain on average 400% in the coming 12 months, I pay atttention.

Helium One Global (LSE: HE1) is one of those stocks. It’s already up 29% this year after the budding gas ‘startup’ announced significant progress at its Southern Rukwa facility in Tanzania.

So what’s driving the growth — and will it continue?

Notable developments

Helium One’s main well, Itumbula West‑1, produces helium at concentrations over 5% — many thousands of times above normal background levels in the air. In February, it announced the successful completion of pump testing at the site, bringing in the equivalent of 16,400 barrels a day.

This is a huge step that’s taken years to come to fruition, allowing the company to progress dicsussions with potential industry partners.

It also recently purchased a 50% stake in the Galactica‑Pegasus project in Colorado, USA. This well’s much closer to production and could bring in early cash from both helium and carbon dioxide sales if drilling goes to plan.

Why helium?

Helium may not carry the same weight as LPG gas but it’s still a big deal. Think of things like MRI scanners, microchips, and space tech — they all need helium. These high-tech-use cases provide long-term visibility in terms of demand, helping ensure revenues remain strong.

If Helium One can turn its Tanzanian discovery into a producing field and Colorado gets up and running, it’ll be selling into a market with strong and consistent demand.

Financials

For now, Helium One remains unprofitable, spending all its funding on drilling and testing. In 2025, it reported a pre‑tax loss of £4.25m – although this was up from a loss of £6.9m in 2024. 

Net assets rose to roughly £39.3m thanks to heavy spending on drilling and exploration, with around £6.13m in financing cash at year‑end.

Encouragingly, it holds almost no debt, with a very comfortable quick ratio of 6.19. However, on several occasions it has raised funds through share dilution, suggesting difficulty in securing financing.

Not for the faint-hearted

Like most penny stocks, Helium One has experienced notable volatility, often driven by share issuance. It also faces the usual risks that come along with exploration and development companies. There’s no guarantee yet that any of its projects will deliver on time, on budget, or at all. Wells can disappoint, costs can blow out, and technical issues can delay production.

And with no steady income yet, it depends on financing to continue — or further share issuance, which hurts the share price. 

These are all fairly common risks that come with most penny stocks. But as they say: ‘no risk, no reward’.

The bottom line

For UK investors, Helium One sits firmly in the ‘high-risk/high-reward category. There’s no dividend, it lacks stable earnings, and any small hiccup could derail future profits.

But if you’re comfortable with the risk and can accept the chance of losing money, the pay off could be spectacular.

On the face of things, it appears to be a well-run company operating in a high-demand, niche sector. That alone gives it lots of potential.

As such, I think it’s worth considering but only as a small allocation in a much larger, adequately-diversified portfolio.