Desert Mountain Energy has announced that its completion and testing operations have commenced at its initial two wildcat helium wells in Arizona’s Holbrook Basin.
According to DME, both wells have significant gas flows from multiple zones aggregating over 180 ft. each, with helium and other gaseous content yet to be determined. The completion and evaluation procedures include logging of the cased holes, perforating the casing at select locations corresponding with anticipated pay zones, testing the pressure and flow rate of gas from the perforations, and gas sampling to evaluate full gaseous content. DME anticipates that the completion and testing work will be complete with results available in the next few weeks.
Proven vs Prospective reserves
There are many different terms and phrases to get accustomed to in the helium business, but few as significant as ‘proven’ and ‘prospective’ reserves when it comes to the future potential and validity of a helium project.
Statements often abound about the prospective reserves of a new helium discovery, while others will cite the proven reserves. So, what do they mean and what’s the difference? Prospective Resource estimates are developed based on a set of assumptions provided to a geological consultant, assumptions which can be highly optimistic.
These figures can generate great scope for future capacities, but such estimates of prospective resources can and often are obtained before any drilling activity has even occurred at the site in question. Proved Reserves, however, are considered almost definite. These are, as the name implies, proven and more precise than estimates alone. In fact, most investment decisions are based on something called ‘2P Reserves’ – which means Proved + Probable. It is these proven reserves that are, therefore, often considered to be the realistic hallmark of a successful helium exploration project.