Blue Star Helium’s strong new gas prospects

Prospective helium resources increase by 175% to 9.6 billion cubic feet (BCF) across five assessed prospects in the Las Animas portfolio.    

An independent Prospective Resource Evaluation determined 6.1 newly assessed BCF at three locations – Galactica, Pegasus and Argo, all of which lie within the proven Lyons Formation helium play fairway.

Blue Star Helium Limited (ASX: BNL) released the independent report which managing director Joanne Kendrick called an ‘outstanding result’. The strength of the proven play elements and the gas interpretation in key wells suggest a moderate to high geological chance of success.

“This almost triples our total resource which, together with the interpretation of gas columns at two historic wells within the Galactica and Pegasus projects, is hugely supportive of our planned drilling program,” Kendrick said.

“We will continue to secure additional acreage within the prospect areas and look forward to the issue of the recent leases won at the December 2020 Bureau of Land Management auction at which stage we will be updating the prospective resource across these prospects.”

Prospects assessment

The play elements of helium charge, high-quality reservoir and the presence of a good top seal have been proven to extend across the Argo, Pegasus and Galactica prospects.

The helium charge within the fairway has been regionally proven, with gas analysis from eight wells (which Blue Star do not have an economic interest in) showing an average of 8% helium content. Further helium soil gas survey analysis across the region performed by Blue Star supports the presence of widespread helium source and migration.

Reservoir quality within the Lyons Formation sandstone has been determined to be consistent and as good as seen following petrophysical analysis of wells associated with and surrounding the Galactica, Pegasus and Argo prospects.

Petrophysical analysis has also suggested that the top seal across the three prospects is of good quality and generally improves across the region towards Galactica, Pegasus and Argo.

Within this proven play fairway, each of the Galactica, Pegasus and Argo prospects are subject to independent prospect risk. Internal geological modelling is based on reprocessed gravity and magnetic data, incorporated offset well data and surface and subsurface horizon and fault mapping.

Blue Star believes that, based on work performed to date, the chance of development on discovery is strong. Modular, skid-mounted processing units located proximal to any discovery would concentrate the raw gas stream to around 98%+ gaseous helium.

Anticipated works for 2021

Blue Star Helium have plans for an initial three to five well drilling campaign in order to maximise the prospective resources being tested.

Following findings of the first hole program, if successful, Blue Star intends to conduct log evaluation and well testing. Should commercial production rates be detected during well testing, this may be completed as a producer. Costs are anticipated to be around $300,000 for initial testing and $100,000 for each subsequent well.

Blue Star Helium will continue to secure additional acreage within the prospect areas, having recently won further leases at auction in December 2020.

This article was developed in collaboration with Blue Star Helium Limited, 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.