Grand Gulf has a date with destiny as helium well progresses towards target

Since spudding its maiden helium exploration well in late April, Grand Gulf has marked excellent progress for the drilling of Jesse1#A, which had reached a depth of 940m.

The well will continue drilling to an anticipated depth of 2460m, and run seven inch casing, before drilling on to test the primary target Leadville Formation at 2530m.

Grand Gulf Energy’s (ASX:GGE) Red Helium prospect has a 308 million cubic metre prospective resource of the highly lucrative gas, which faces both strong demand and supply side pressures.

“To be testing the Jesse prospect with the drill bit in the Red Helium Project in under eight months from acquisition through permitting to spudding is testament to the amazing work of the fully integrated technical and operational team,” managing director Dane Lance said.

“We are extremely pleased with the drilling progress to date, with the potential for timely helium production when the US and world is experiencing one of the most notable shortages of helium in history.

“These circumstances successfully position Grand Gulf to take advantage of the current buoyant market conditions.”

Funding and offtake

Investors are clearly clued in to the potential. The strong response to Grand Gulf’s recent placement of shares priced at 4.4c each led to the company increasing the amount raised from $8m to $11m.

Proceeds allowed it to optimise Jesse1#A with a larger production tubing diameter that allows for between two to three times higher flow rate in the event of a success.

This neatly ties into the existing strategic alliance and gas sales agreement with helium refiner and seller Paradox Resources, which owns the Lisbon Valley Helium plant in Utah about 32km to the north.

This article was developed in collaboration with Grand Gulf Energy, 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.