Blue Star Helium spuds Jackson 31 development well in Colorado

Blue Star Helium has spudded the Jackson 31 helium development well at its Galactica/Pegasus field
On completion, wireline logging and pressure readings will be carried out to determine its production potential
Jackson 31 will then be completed and ultimately tied-in to production facilities

Special Report: Blue Star Helium is progressing its goal of becoming a helium producer with the spud of the Jackson 31 development well at its Galactica/Pegasus field in Colorado.

The shallow conductor section of the well has been set and blowout preventers are being installed and tested prior to drilling of the intermediate hole section.

Once the intermediate section is drilled and casing set, Blue Star Helium (ASX:BNL) will then drill towards the target Lyons formation with total depth planned within the upper Lyons gas reservoir.

It will then carry out wireline logging followed by flow and pressure readings at the wellhead.

This data will be used to estimate the production potential of the well based on the model built from existing data collected from the field.

Jackson 31 will then be completed and ultimately tied-in to production facilities.

Helium is a rare gas that is irreplaceable in semiconductor manufacturing, nuclear energy production, solar panels, optic fibre and the cooling of superconducting magnets in MRI scanning machines.

It typically commands a price of between US$400 and US$500 per thousand cubic feet of gas (Mcf) for longer-term contracts and has seen spot pricing of up to US$3000/Mcf.

While demand remains consistently high, supply has become increasingly constrained due to geopolitical forces, production faults, or planned maintenance shutdowns from major producers such as Russia, the US and Qatar.

Galactica/Pegasus

The Galactica/Pegasus development was discovered by the company in 2022 with four wells – JXSN#1 to JXSN#4 – delivering 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 that was drilled in June 2024 and 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.

Further de-risking Galactica/Pegasus is the adjoining, third-party Red Rocks helium project that is currently producing helium.

Additionally, 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.