New lease puffs up Big Star’s helium acreage
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Special Report: Big Star continues to build up its helium lease portfolio in Colorado with the acquisition of a 59,510 gross acre package.
Locking up valuable acreage is a tried and tested means of securing a competitive advantage and that is certainly the path that Big Star Energy (ASX:BNL) is taking with its helium play in Colorado.
The company has now leased a further 59,510 gross acres – 14,877 acres net to Big Star – across its prospect and lead portfolio in the US state, which follows up on its earlier acquisition of 21,824 net acres under the Colorado State land auction.
Its lease portfolio now stretches over 86,614 gross (38,171 net) acres, about 350 per cent and 250 per cent more than its original year-end targets of 25,000 gross and 15,000 net acres respectively.
This also gives the company what it described as an industry-significant lease position in a highly prospective helium area.
Soil surveys in this area have returned positive helium anomalies ranging between 10 per cent and 50 per cent above normal atmospheric levels, which is consistent with soil gas results over third-party producing helium projects in the US.
“It is extremely pleasing that our leasing program is gathering such momentum, with this material acquisition following on from the highly successful state auction last week,” managing director Joanne Kendrick said.
“Importantly this new lease also covers two additional helium anomalies from our regional soil gas survey acquired earlier this year.
“We will continue to be guided by our regional soil gas survey and internal geologic model in consolidating our leasing position as we prepare to permit our five-well drilling program early next year.”
Big Star will pay the lessor $US75,000 on completion of the acquisition. The new leases are valid for an initial term of five years with an option for a further five-year renewal.
A 12.5 per cent royalty will be payable to the lessor in the event that the company successfully produces helium or other products from the lease area, which has no minimum work commitments.
Earlier this week, the company said that any discovered high-concentration helium accumulation would potentially be developed using a pressure swing adsorption plant that could process 2 million cubic feet of raw gas per day.
This plant requires between 5,000 and 10,000 acres to fill to capacity and will extract the saleable helium, which makes up 5 to 10 per cent of the raw gas production.