Grand Gulf Energy gearing up to add another helium well to its project in Utah

Grand Gulf Energy is building on the success of its first successful exploration well at the Red Helium project in Utah with plans to drill a second well before the end of this year now bedded down.

The company has finalised the site of the upcoming Jesse#2 well with the aid of 2D seismic data combine with results from Jesse#1A and historical well results.

It will exclusively target the gas zone and a priority to complete well above the gas/water contact to manage the risk of water ingress.

Grand Gulf Energy (ASX:GGE) is also planning to drill a third well in early 2023 with three priority locations identified.

Jesse#1A had intersected 101 feet (30.78m) of net gas pay with up to 1% helium returned to surface.

Into the upside grade

Importantly, this realised the upside grade case for helium content in the Jesse structure along with a productive and strongly pressured reservoir at 2,465 psi, making it likely that any development will enjoy better economics.

Managing director Dane Lance said the success of Jesse#1A just 15 miles west of the Doe Canyon analogue helium field was highly encouraging given the scale of the resource in one of the most prolific proven producing helium locations in the world.

“The Jesse#2 well engineering has incorporated the lessons learned from the evaluation program on the maiden helium exploration well to minimise risk of water production by staying high in the column,” he added.

“The compelling fundamental commercial pillars of the Red Helium Project remain unchanged with the ability to quickly monetise a commercial well to generate near term free cash flow with minimal time and cost.

“In fact, the economics are enhanced by the realisation of an upside helium grade, and we look forward to being back in the field imminently for Jesse#2.”

Second well location

Jesse#2 is located 1.5 miles (2.4km) southeast of Jesse#1A and was selected as the best of three mature prioritised locations on the Jesse structure derived from an extensive review of data derived from six historical wells and Jesse#1A with calibrated 2D seismic.

Engineering for the new well will incorporate further learnings on the heterogeneous Paradox Basin carbonate rocks from the drilling of the first well.

Its design will include a managed pressure drilling program through the primary Leadville formation, which will reduce formation damage.

This ability to drill underbalance will allow real-time monitoring of reservoir inflow, in excess of normal mud-gas returns, with real-time monitoring of gas compositions using mass spectrometry.

Once significant helium inflow is detected, a bottoms-up flow test will be conducted to characterise the reservoir and in the event of commercial flow rates the well will be completed for production high in the formation.

Grand Gulf is also optimising the preferred drill location for the third well and has multiple other locations on Jesse within leased acreage proximal to the pipeline that could be quickly matured to drill-ready.

This article was developed in collaboration with Grand Gulf Energy (ASX:GGE), 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.