Blue Star snags approvals for potential helium production wells

Blue Star adds four approved wells to its list of development well locations following final approval from the Colorado Oil and Gas Conservation Commission.

The wells will be drilled as offset development wells to the JXSN#1 and JXSN#2 helium discoveries at the Galactica/Pegasus project in Las Animas County and are expected to be production wells.

Blue Star Helium (ASX:BNL) noted that Sproule is currently finalising a resource update for the project, which is expected to result in the declaration of contingent helium and CO2 resources.

Further engineering and market work is underway to refine the initial planned development configuration and forecast helium and CO2 production and cost estimates at Galactica/Pegasus, which has multiple potential product streams.

A range of development pathways are currently under consideration, including a leased plant and third party operated option. The final development is expected to include a CO2 extraction route and by-product stream.

The company expects to permit Galactica/Pegasus in parallel with the Voyager development, which will be achieved using a leased processing facility with first helium sales targeted for the second half of 2023.

Strong helium content

Previous drilling at the Galactica/Pegasus has proven that the field is a high helium concentration discovery.

JXSN#4 intersected a 235.5ft (71.8m) gas column with 133.5ft of net pay across the Upper and Lower Lyons sands which returned calculated air-free helium of 6.06% – nearly double the 3.14% helium content of the JXSN#2 discovery.

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.