Blue Star floats prospective helium resource estimate ahead of drilling
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Special Report: Blue Star Helium now has an estimated prospective helium resource of 3 billion cubic feet (Bcf) for its first 2 prospects in Colorado that provides confidence for its upcoming drilling program.
The resource estimate for the Enterprise and Galileo prospects was calculated by leading global energy consultants Sproule within the play fairway proven by the Model Dome helium field.
Model Dome — 6miles from Blue Star’s leases — produced helium for a short time prior to WWII before it was acquired by the federal government for its strategic reserve.
Blue Star Helium (ASX:BNL) has started drill permitting for the Enterprise prospect and has estimated that proof of concept wells can be drilled on a dry hole basis for just $US300,000 ($456,500).
“This is an outstanding result at our first two prospects in our portfolio. It gives us great confidence as we prepare for our initial drilling campaign later this year,” managing director Joanne Kendrick said.
Blue Star believes that based on work done to date, the chance of development upon making a discovery is strong.
That’s not a hard ask given that at $US280/mcf price, a 3Bcf resource could be worth $US840m.
Helium’s high value as reported for the final sales from the US Government strategic reserve in August 2018 (average US$280/mcf) is due to its irreplaceable use in a whole range of medical devices and scientific instruments from MRI machines in the medical industry to space exploration, rocketry, high level science, fibre optics, electronics, telecommunications, superconductivity, underwater breathing, welding, and nuclear power stations.
While demand continues to rise, supply is falling thanks in part to the lower demand for gas as the vast majority of current and forecast helium supplies are by-products of hydrocarbon production.