Serenity Now: Blue Star pegs CO2 well production for H1 2025 to supply refreshing beverages

Serenity project’s Sammons well analysed to produce 98.77% CO2
Three additional approved drilling locations available for drilling
Low facility development costs at US$1.3 million with contracts advancing

Special Report: Near its Pegasus and Galactica wells, Blue Star Helium’s Serenity CO2 gas product has been pegged for H1 2025 production with the Lyons reservoir analysed to produce at 98.77%.

Blue Star Helium’s (ASX:BNL) Sammons 315310C well has been drilled, tested and proven, and is currently suspended for tie-in to the production facility.

Lab analysis of Sammons contained a combined average composition from both the upper and lower Lyons reservoirs of 98.77% carbon dioxide, 1.15% nitrogen and 0.09% helium, with the lower Lyons reservoir consistently showing higher CO2 levels up to 98.95%.

Also at Serenity, flow testing was conducted at various stages throughout the upper Lyons drilling with gas rates as high as 500 Mcf/d through a 1.25-inch orifice.

BNL says it’s got three additional approved drilling locations which require final drill form approvals in order for additional wells to be drilled.

It’s expected that a second well will be drilled and the existing Sammons well will be completed for production in anticipation of the installation of an initial processing facility.

The Las Animas leaseholds with development and exploration wells. Pic supplied: (BNL)

Serenity’s facility development concept

BNL has selected an initial small-scale, low capex development targeting first production of beverage-grade CO2 starting from H1 2025, with an expected cost of $1.3m.

The proposed facility itself is pegged to be a chilled distillation system producing high-purity liquid CO2.

The system concept supports processing of ~500 Mcf/d raw gas from an initial two-well development, producing between 20-25tpd of beverage-grade CO2.

BNL says it’s in discussions with several process facility suppliers and expects to be in a position to let contracts for the construction of the facility shortly.

Broader scope

The company expects to be able to develop up to 18 further locations at Serenity as an expanded commercialisation of this asset.

Further evaluation of this larger-scale development is in progress in consultation with key engineering consultants and end-market participants – with expected total well costs of ~US$400,000.

“Serenity offers a very high-grade, natural source of CO2 production for end-users in critical markets, many of whom have struggled to secure reliable supply across recent years,” BNL CEO Trent Spry says.

“The high concentration raw gas we have at Serenity is well suited for producing premium, beverage-grade CO2 product.

“Our technical and economic evaluations have demonstrated the clear opportunity presented by rapid commercialisation of the Serenity project.

“As a result, Blue Star is now set to advance Serenity into production, in order to meet critical end-market demands for, long-term sources of natural CO2 output.”

It will also help Blue Star enter the market early, with CO2 a planned co-product of its future helium wells.

“This initial development also creates an excellent foundation for market integration of the planned CO2 co-product from targeted development of the Galactica-Pegasus helium project, which lies just nine miles to the north-west of Serenity.

“Alongside development of the initial production facility at Serenity, we continue to work with various engineering groups and commercially interested parties to refine forecast volumes and costs for a potential second phase, expanded output development of the significant CO2 volumes in the Serenity structure.”

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.