- Blue Star Helium (BNL) has received independent analysis results of its Galileo and Enterprise prospects, revealing an estimated three billion cubic feet (BCF) in helium resources
- The figure, generated by oil and gas consultant Sproule, was derived using the probabilistic method, and is based on a 50 per cent likelihood contained resources will equal or exceed the estimate
- Blue Star believes there’s a strong chance of development upon discovery if the prospects do prove as rich as suggested
- In order to start drilling, Blue Star must undertake some permitting work, which is expected to be complete later this year
- The first development well will cost around US$300,000 (around A$451,280), with a further US$100,000 (about A$150,430) to be spent to start production if the well is successful
- The company says further exploration at the two prospects will be reliant on the results from the first well.
- Blue Star Helium is trading grey today at 0.9 cents per share
Blue Star Helium (BNL) has received independent analysis results of its Galileo and Enterprise prospects, revealing an estimated three billion cubic feet (BCF) in helium resources. The figure, generated by oil and gas consultant Sproule, was derived using the probabilistic method, and is based on a 50 per cent likelihood contained resources will equal or exceed the estimate.
Promising prospects
More than two-thirds of the resources are contained at the Enterprise prospect, with the remainder at Galileo. Both prospects are situated in the Lyons Formation Helium Play, in Las Animas County, Colorado. While the 3 BCF figure is just a prospective resource evaluation and remains to be tested, the prospects show considerable promise at this point. Petrophysical and geochemical analysis of the area show strong signs of contained helium at both Enterprise and Galileo, and data seems to demonstrate the existence of a high-quality reservoir.
Next steps
Blue Star believes there’s a strong chance of development upon discovery if the prospects do prove as rich as suggested. The company is already in talks with providers to cost extraction equipment and transport arrangements.
If the company runs with the currently suggested model of renting equipment, the majority of the capex costs at startup would be drilling the wells. In order to start drilling, Blue Star must undertake some permitting work, which is expected to be complete later this year. At that point, the first development well is estimated to cost US$300,000 (around A$451,280). Further evaluation and testing costs would be incurred to make sure the first Enterprise well could work as a commercial producer. It’s estimated those costs would put a further US$100,000 (about A$150,430) on top of the drilling cost, meaning Blue Star has quite a cheap potential pathway to first helium. The company says further exploration at the two prospects will be reliant on the results from the first well. Blue Star Helium is trading grey today at 0.9 cents per share as at 2:35 pm AEST.