ASX-listed Blue Star Helium’s US helium development hopes have been given a massive lift on the back of a 175 per cent increase in combined potential resources to 9.6 billion cubic feet across five prospects at its Las Animas helium project in Colorado. The additional 6.1 billion cubic feet in “2U/P50 unrisked prospective” helium resources came from Blue Star’s newly assessed Galactica, Pegasus and Argo prospects.
The jump in the Perth-based company’s helium resources follows hot on the heels of a 16 per cent hike in the prospective resources for its Enterprise and Galileo prospects to 3.5 billion cubic feet, with both sets of recently completed independent resource assessments undertaken by North American-based energy consulting firm, Sproule.
Galactica, Pegasus and Argo lie east of the historic high-grade Model Dome helium field which produced helium gas at an exceptional grade of 8 per cent in its day. Enterprise and Galileo lie just west of Model Dome.
According to Blue Star, the Galactica, Pegasus and Argo prospects occur in what is known as the Lyons Formation, which it says has been proved in the area by the historical Model Dome field.
Blue Star says the petrophysical analysis commissioned by the company on wells associated with and surrounding the three prospects points to the reservoir quality of the Lyons Formation sandstones being potentially consistent with and as good as those seen at Model Dome.
Blue Star Helium Managing Director, Joanne Kendrick said: “This resource assessment is an outstanding result for Blue Star, which brings our total P50 resource to 9.6 billion cubic feet net recoverable helium from the five prospects we have had assessed in the Las Animas portfolio.”
“This almost triples our total resource which, together with the interpretation of gas columns at two historic wells within the Galactica and Pegasus prospects, is hugely supportive of our planned drilling program.”
Blue Star recently won further leases within the Las Animas project area in a US Bureau of Land Management auction, swelling its advancing helium prospects portfolio and taking its overall ground holdings to approximately 215,000 gross or 160,000 net acres, up from 92,000 gross or 50,000 net acres since early last year.
Ms Kendrick said: “It should be noted that the Federal acreage won at the December 2020 auction is not included in this (latest) resource evaluation and an evaluation of prospective resources associated with that acreage will not be published until those leases are issued to Blue Star.”
Blue Star hopes to launch an expanded maiden drill campaign comprising three to five wells sometime this year subject to drilling permit approvals. Expected drilling costs have been estimated at approximately US$300,000 for each dry hole and US$400,000 a pop for a producing well.
Should the first well on any prospect strike helium, Blue Star intends carrying out a log evaluation and well testing program. If commercial production rates of helium are indicated during the well testing, the company says it may complete that well as a producing well.
Blue Star’s low CAPEX, low operating-cost and high-grade helium production aspirations are enhanced by not having to sink a pile of capital into building an expensive new production operation and separation plant in the event it proves up economic helium flow rates.
Modular, skid mounted processing units situated proximal to any discovery would concentrate the raw gas stream to about 98 per cent-plus gaseous helium. Concentrated helium would then be loaded at site onto an offtake customer’s tube trailer for transport to a liquefaction plant or end-user.
Las Animas county has a mature helium industry and is well located within trucking distance to established liquefaction plants with material available capacity.
The Model Dome field was discovered in the 1920s and has been regarded as one of the US’s and the world’s highest helium concentration fields. It was in production for only a short period before the US Government snapped it up.
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By Matt Birney
