• BNL’s State 16 well found capable of stabilised production of 250-350Mscf/d
  • Rate calculated to maximise initial production rate plateau whilst providing constant feed to plant
  • Well being completed for tie-in to production facilities


Special Report: Independent engineering consultants have advised Blue Star Helium that its State 16 SWSE 3054 development well will be capable of stabilised production flow rates of 250,000 to 350,000 cubic feet of gas.

The well in the Galactica project within Colorado’s Las Animas County successfully flowed gas at a stabilised rate of 285,000 standard cubic feet per day (285Mscf/d) with up to 1.9% helium content.

This includes CO2 concentrations of up to 70%, which could add further to revenues as clean CO2 can be used in food and beverages, as well as chemical sectors.

Blue Star Helium’s (ASX:BNL) Galactica/Pegasus is a large-scale project that has already been proved by four exploration wells that returned strong helium concentrations of 2-6.1% and flowed gas at rates of between 125-412 Mscf/d during testing.

Helium is a rare gas that goes for US$450-$3000 per Mcf on the spot market and between US$400 and US$500/Mcf for longer-term contracts.

This is due to its often irreplaceable use in semiconductor manufacturing, nuclear energy production, solar panels, optic fibre and the cooling of superconducting magnets in MRI scanning machines.


Stabilised helium output

Results from State 16 SWSE 3054 and the earlier discovery wells have been integrated and compared to public information available from the adjacent Red Rocks development by the independent consultants.

This work found that the permeability of the Lyons formation is 405 mD and at a producing wellhead pressure of 6 psia will allow the well to flow up to 441 Mscf/d.

Stabilised production rates will range from 250-350 Mscf/d, representing constrained rates to maximise the initial production rate plateau which is standard practice in gas developments to maximise recovery and reservoir pressure maintenance while providing a more constant feed rate to be achieved through the plant.

BNL adds that its application for five additional wells at Galactica has passed the completeness and technical review of the Colorado Energy and Carbon Management Commission with a hearing expected later this year.

These wells are located to the south and southwest of the State 16 well toward the proposed Galactica plant site and are expected to form part of the initial gas gathering into the Galactica helium production facility.

“We are very pleased with the results of the State 16 well, drilled on schedule, and at a significantly lower cost than previous wells,” managing director Trent Spry said.

“This directly benefits our economics as we continue to refine our drilling and commercialisation models.

“The State 16 well analysis returned results inline with our modelling. The impressive flow rates support production optimisation as we drill additional development wells and maximize helium gas output at our processing facility.

“Our operations team and engineers are advancing all aspects of the development, which excitingly, now includes the purification and sale of CO2 into another market which has suffered critical supply chain issues.”


Current activities

State 16 SWSE 3054 is currently being completed for tie-in to production facilities.

BNL is also continuing commercial discussions with interested buyers for purified helium product.




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.