Blue Star Helium receives nod for helium, CO2 plant in Colorado

• Blue Star has secured approval to construct a helium and CO2 processing plant in Colorado
• Jackson-29 well flows gas at strongest rate yet during current drilling campaign
• Gas samples return helium concentrations of up to 3.3%, the highest in the campaign

Special Report: Blue Star passed a key milestone on receiving approval to construct a helium and carbon dioxide processing plant in Las Animas county, Colorado.

Approval for a Major Facilities Permit from the Board of County Commissioners allows for the construction of the Pinon Canyon plant that will process helium and CO2 from its wells in the county, starting with those it has drilled at the Galactica project.

Blue Star Helium (ASX:BNL) chief executive officer Trent Spry said the company was delighted to secure the permit for the plant.

“The strong community support demonstrated at the review hearing was particularly encouraging and affirms our collaborative approach,” he added.

“This approval is the result of a very thorough application and a positive relationship with Las Animas County.

“It marks a significant advancement for our helium project and reinforces our commitment to the community and our business partners in fully developing this valuable resource.”

The permit was approved after the board found the company’s wholly owned subsidiary, BNL (Enterprise) Inc had demonstrated a clear need for the plant, the suitability of the proposed location, adequate utility of existing roads and access to the proposed site, and compatibility of the proposed facility with surrounding land use.

Watch: Blue Star spuds another at Galactica helium

Another potential producer

The approval comes as the company looks set to add another helium producer after the Jackson-29 well at its Galactica project flowed gas to surface naturally at a rate of up to 320,000 cubic feet per day during flow testing.

Early gas samples have also returned helium concentrations of up to 3.3% with 48.66% CO2, in line with expectations.

While Jackson-29 is expected to have maximum potential flow rates of up to 550,000cfd, output is projected to be constrained at stabilised flow rates of between 350,000 to 450,000cfd to optimise production.

Spry said the helium concentrations at Jackson-29 were the highest recorded within its current drilling campaign and aligned with the company’s expectations for a high-quality helium response.

He added the flow rates were also the strongest seen in this campaign.

Jackson-29 was drilled to a total depth of 1183 feet and intersected the target Lyons Sandstone at 1122ft with no water encountered during drilling.

Strong pressure build-up post-testing indicates high permeability and good reservoir communication.

BNL had previously flowed gas from State-16, Jackson-4 and Jackson-31 development wells at Galactica and spudded the Jackson-27 development well earlier this month.

Meanwhile at its strategic option opportunity in Lincoln County Colorado the Company is also preparing to test the Bubba State-3 well ahead of the Big Wampum-4 well having previously tested the Ma Stare-16 well with exceptional results.

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.