Blue Star Helium flows gas from Jackson 31 development well in Colorado

Blue Star Helium has completed drilling of its Jackson 31 development well in Colorado
Well intersected 57ft of high-quality, gas-saturated Lyons Sandstone and has flowed gas naturally
Samples sent to laboratory for helium and CO2 analysis, preparations underway for flow testing

Special Report: Blue Star Helium’s Jackson 31 helium development well in Colorado has flowed gas naturally after penetrating 57 feet of high-quality, gas-saturated Lyons Sandstone.

The flow of gas during drilling and at total depth of 1210 feet from the reservoir, which was intersected at a depth of 1153ft, demonstrates strong reservoir communication and also bodes well for commerciality.

Blue Star Helium (ASX:BNL) has sent gas samples to the laboratory for analysis of helium and carbon dioxide concentrations.

Helium is of course valued as a rare gas that typically commands a price of between US$400 and US$500 per thousand cubic feet of gas (Mcf) for longer-term contracts due to its irreplaceable use in semiconductor manufacturing, nuclear energy production, solar panels, optic fibre and the cooling of superconducting magnets in MRI scanning machines.

High purity CO2 also has the potential to be a valuable product in its own right due to its use in the food and beverage sector as well as in processes for welding, EV battery production, agriculture and oil field services.

No water was encountered during drilling of the Lyons Formation and the company is now finalising the wellhead configuration ahead of carrying out surface pressure readings and flow testing.

“This is a fantastic start to our development campaign at Galactica. The successful drilling of Jackson 31, with confirmed gas flows and no water encountered in the target zone, validates our geological model and significantly de-risks the project,” managing director Trent Spry said.

“The natural flow during drilling and at TD demonstrates the excellent reservoir communication we anticipated. We are now eagerly awaiting the results of the gas sample analysis and the upcoming flow testing.

“This achievement marks a major milestone for Blue Star, and we are confident in the potential of Galactica to become a significant helium producer.”

Jackson 31 well

BNL said that based on results from offset wells, it expects the entire upper Lyons Formation to be gas saturated along with a significant portion of the lower Lyons sand.

This well had targeted the highest quality sandstone at the top of the upper Lyons Formation which is well connected to the entire gas column.

Jackson 31 sits within the Galactica project, which is itself part of the broader Galactica/Pegasus development that was discovered by the company in 2022.

Four wells – JXSN#1 to JXSN#4 – delivered gas flows of 125,000-412,000 standard cubic feet per day of gas with high helium concentrations of between 2-6%.

It was further appraised by the State 16 well drilled in June 2024, which was independently assessed to be capable of producing gas at a maximum rate of 441,000scf/d with more stabilised rates constrained for production optimisation projected to be between 250,000-350,000scf/d.

State 16 tested 1.9% helium and logs identified a >96ft gas column in the Lyons Sandstone.

Galactica is further de-risked by the adjoining, third-party Red Rocks helium project that is currently producing helium.

On successful testing, the company expects to complete and tie Jackson 31 into production facilities.

BNL has also been advancing engineering work related to CO2 removal, purification and sale prior to helium processing via the IACX helium recovery unit.

Engineering and market analysis continues to optimise development configurations, production forecasts, and cost estimates.

Development of Galactica is being advanced in joint venture with Helium One Global, which is funding the first US$450,000 of the well’s cost.

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.