Blue Star Helium is well on the way to securing the final drilling permit for its Enterprise 16-1 well in Colorado during Q4.
The company has just received notice its Form 2A oil and gas development plan (OGDP) application has passed a completeness review with the Colorado Oil and Gas Conservation Commission (COGCC).
This is kind of a big deal. Blue Star Helium (ASX:BNL) is the first helium operator in Colorado to pass completeness on an OGDP application since regulatory changes to the state permitting process in January – and executive orders from the Biden Administration – which targeted hydrocarbon drilling but caused additional complexity and delay across drilling applications.
It’s the first drilling application of any type to achieve this in Las Animas County since January, and only the sixth overall across Colorado.
Approval hearing process the next step
The next step towards the drill permit is a public review process and approval hearing scheduled for 27 October 2021.
“While we have been frustrated with the elongated OGDP process through 2021, we fully appreciate the environment of uncertainty and challenge that the COGCC has had to navigate through this period,” Blue Star managing director and CEO Trent Spry said.
“We are therefore very pleased to have now passed a completeness review on our Enterprise 16-1 application, particularly given so few drilling applications across the entirety of Colorado have achieved that since early this year.”
Subject to the application being approved at the hearing, Blue Star must submit the final permit to drill, which it says is typically received within 30 days of submission.
“We now look forward to undertaking the remainder of the approval process and, in the targeted event of an uncontested application, receiving the final drill permit for Enterprise 16#1 during mid-to-late November, if not potentially before,” Spry said.
“We expect to achieve completeness on future applications in a much shorter time frame because we now have a form of application that meets COGCC’s expectations.”
Helium resources grow 39pc
The company’s strategy is to develop new supplies of low cost, high grade helium in North America – a high-value commodity that is vital in a number of modern technology applications such as MRI, nuclear medicine, rocketry and space exploration.
In June, Blue Star increased its unrisked prospective helium resource in the Galactica, Pegasus, Argo, Enterprise and Galileo prospects by 39 per cent to 13.4Bcf after it was awarded an additional 32,858 acres of prospective ground.
The new leases were awarded by the US Bureau of Land Management through its December 2020 auction, taking its total leasehold up to 173,000 net acres (237,000 gross acres).
Notably, the Galactica and Pegasus prospects are all within the Lyons Helium Play Fairway that was proven by the Model Dome helium field that produced gas with grades of up to 8 per cent helium. They’re also on trend with the Govt Cynthia True #1 well that flow-tested 8.8 per cent helium.
Once Blue Star has secured the final permit for Enterprise 16-1, it plans to apply for two new wells as part of its rolling permitting strategy.
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.