Enterprising Blue Star hits warp speed on Colorado helium hunt

Blue Star has started an exploratory water well program at the Galactica and Pegasus prospects that will help guide the selection of helium exploration well locations.

In typical Blue Star innovative improvisation – water wells drilled by ranchers, funded by the company – have proven to be a fascinatingly useful tool in the company’s no-holds-barred helium search.

In this case they’ve helped confirm the presence of columns with significant concentrations of the rare and hugely valuable gas – helium is starting to command prices above US$600 per thousand cubic feet (mcf).

That’s actually well over two orders of magnitude (non-mathematicians: 100x) higher than the price of $5.72/mcf which natural gas currently commands for the Nymex May contract.

The success of the BBB#1 water well, which intersected a 134 foot gas column with a calculated helium concentration of 8.8% in the target Lyons formation, is also directly responsible for Blue Star Helium (ASX:BNL) fast tracking the Voyager prospect for development.

Helium well testing imminent

Meanwhile, the company is in the process of securing a workover rig for its Enterprise 16#1 well after the completion and testing program was approved by the Colorado Oil and Gas Conservation Commission.

It also expects to spud the Sammons 315310C (Blue Star 50%) at the Serenity prospect this quarter and is advancing permitting for another eight wells to be drilled this year.

“The continuation of our successful exploratory water well program this year reflects the large benefits that we are able to both deliver and receive from undertaking this combined ESG and geologic evaluation initiative,” managing director Trent Spry said.

“Exploratory water wells enable us to obtain extensive data that, as was the case at the BBB#1 water well, allows us to accelerate helium well location selections for appraisal and development drilling.

“At the same time, we are delivering landholders in the local Las Animas community critical new water resource data and valuable water infrastructure for their long-term private and commercial use.”

He added that the company was looking to permit and drill 10 helium exploration wells (including Enterprise 16#1 and Sammons 315310C) this year.

Enterprise testing

Blue Star’s Enterprise 16#1 well had intersected a 78ft gas column with helium observed during drilling though no initial testing was carried out due to water invasion of the top part of the Lyons Formation.

Well workover and testing will seek to obtain a gas composition from the top of the Lyons, which will give the company a much better idea of just how much helium is present.

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.