Blue Star closer to helium drilling with first well location staked

Special Report: The game is afoot with Blue Star formally staking out the preferred location of its first helium well at the Enterprise prospect in Colorado.

The company’s US-based operations team has been evaluating various potential well locations across the Enterprise and Galileo prospects.

Blue Star Helium (ASX:BNL) says it will now submit the Application for Permit to Drill at the prospect, a process that typically takes about four months from submission.

It previously noted that it would drill one well at the Enterprise prospect at an estimated dry hole cost of $US300,000 ($419,080), with a further $US100,000 if commercial amounts of helium are discovered and the decision is made to complete the well as a producer.

First well location at the Enterprise prospect Pic: Supplied

Helium bounty

The explorer has independently estimated that the Enterprise and Galileo prospects could host prospective resources of 3 billion cubic feet (Bcf) of helium.

Helium, traditionally a low concentration by-product of natural gas production, is a dwindling commodity that is vital in a number of modern technology applications such as MRI and nuclear medicine. Blue Star is targeting a high helium concentration accumulations.

Given its scarcity and value, it shouldn’t be surprising that the last published price for helium from the US Bureau of Land Management auction comes in at an eye-watering $US280 per thousand cubic feet of gas.

At this price, which has historically served as a “defacto” crude price for plant-gate helium sales, Blue Star’s resource could be worth $US840m.

And Blue Star might have more helium in its inventory as Enterprise and Galileo cover just a small part of its landholding, which covers more than 120,000 gross acres (65,000 net acres) and hosts nine other prospects and numerous other leads.

This story was developed in collaboration with Blue Star Helium, a Stockhead advertiser at the time of publishing.

This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.