Blue Star Helium confirms up to 1.9% helium content at State 16 SWSE 3054 development well
Well has flowed gas at a stabilised rate of 285Mcf/d, consistent with gas flows at third-party Red Rocks project
CO2 concentrations of up to 70% could add to revenues
Application made for a further five development well locations
Special Report: Blue Star Helium is progressing development of its Galactica project in Las Animas County, Colorado, after confirming that up to 1.9% helium is present within the State 16 SWSE 3054 well.
Galactica/Pegasus is a large-scale project that has already been proved by four exploration wells that returned strong helium concentrations of 2-6.1% and flowed gas at rates of between 125-412,000 cubic feet per day during testing.
Notably for Blue Star Helium (ASX:BNL), the planned development of Galactica is further de-risked by the successful third-party commercialisation of the adjoining Red Rocks helium project.
This led to the drilling of the State 16 SWSE 3054 development well, drilled to a total depth of 1211ft and successfully intersected 96ft of high-quality gas-filled sandstone in the targeted upper Lyons production section.
Helium is a rare gas, valued for its (often irreplaceable) use in semiconductor manufacturing, nuclear energy production, solar panels, optic fibre and the cooling of superconducting magnets in MRI scanning machines.
This is reflected in its pricing – which could go anywhere for US$450-$3000 per thousand cubic feet (Mcf) on the spot market and between US$400 and US$500/Mcf for longer-term contracts.
Proven gas flow
State 16 SWSE 3054 has now flowed gas at rates as high as 313Mcf per day that has been stabilised at 285Mcf/d, which is consistent with gas flows at Red Rocks.
Laboratory analysis of reservoir gas samples show air-corrected helium concentrations of up to 1.9% – consistent with offset discovery wells.
Additionally, the carbon dioxide concentrations approaching 70% could add further to revenues as clean CO2 can be used in food and beverages as well as chemical sectors.
Results are being analysed by BNL’s independent engineering consultants to model a maximum stabilised rate and drawdown for incorporation into development planning and economics.
The company has also filed a new Oil & Gas Development Plan (OGDP) for five additional development wells, adding to the 11 potential sites already permitted – four of which are fully permitted for drilling.
Progress is also being made on the permitting for a helium processing plant site.
This article was developed in collaboration with Blue Star Helium, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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