Grand Gulf now has more skin in the game at the Red Helium project after increasing its working interest from 55% to 70% after meeting earn-in requirements for the first well.
It follows the company contributing the first US$1.5m for the cost of drilling the successful Jesse#1A well in Utah, which had intersected a 203 foot (61.85m) gas column with gas concentrations ranging from 0.44% to 0.65%.
This is above the 0.4% helium concentration found in the producing Doe Canyon project, while bottomhole pressures are in line with virgin pressure modelling at Doe Canyon.
Grand Gulf Energy (ASX:GGE) now has the right to boost its stake in the project to 85% by contributing the first US$1.5 million to each of two further Red Helium project wells.
Well testing to begin soon
The company has also sourced a workover rig, which is scheduled to mobilise to the Jesse#1A well site in mid-August.
It will pay 70% of the costs incurred above the initial US$1.5m expenditure associated with the well.
Work to be carried out by the rig includes running a production log, isolating the gas column and carrying out flow testing to determine reservoir deliverability and obtain a representative helium sample.
Grand Gulf had previously been unable to carry out stable flow testing at the well due to water ingress and reservoir pressures being sub-hydrostatic.
This article was developed in collaboration with Grand Gulf Energy, 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.