Blue Star Helium Ltd (ASX:BNL, OTC:BSNLF) continues to enhance its helium strategy focused on Las Animas County in Colorado, USA, with the approval of an Oil and Gas Development Plan (OGDP) for three proposed helium development wells at the Galactica/Pegasus project.
Approval from the Colorado Oil and Gas Conservation Commission (COGCC) relates to the proposed Jackson #01, Jackson #02 and Jackson #03 wells.
These three wells are to be drilled as offset development wells to the JXSN#1 and JXSN#2 helium discoveries and are expected to be production wells.
BNL is now set to submit the final Form 2s for these wells and on approval, the Galactica/Pegasus drilling inventory will comprise seven permitted helium development wells, four helium development wells awaiting OGDP approval and 20 further well locations identified for permitting.
“Larger-scale project”
Blue Star managing director and CEO Trent Spry said: “While our maiden Voyager development is the focus for our operations team targeting Q4 first helium, work continues in parallel on the exciting Galactica/Pegasus project where the company had four successful discoveries over the two prospects in 2022 and moved into development planning.
“Galactica/Pegasus is a larger-scale project, and we are pleased that three more well locations have been approved.
"With four wells already approved this will soon bring the development well inventory to seven with an additional four already proceeding through the OGDP process and a further 20 wells in various degrees of permitting readiness.”
Multiple potential streams
Final permits have previously been received by the company for the drilling of the State 09, 16, 35 and 36 helium development wells at Galactica/Pegasus.
Blue Star had a successful exploration campaign at the Galactica and Pegasus prospects during 2022 with the four wells (JXSN#1 – JXSN#4) drilled across the two prospects resulting in four discoveries with gas-bearing columns of up to 230 feet and helium content up to 6% and flow rates as high as 412 Mcf/d.
The location of the development wells (approved and awaiting OGDP approval) at Galactica/Pegasus.
The planned Galactica/Pegasus development is a larger-scale and longer-dated project compared to Blue Star’s maiden Voyager project, with multiple potential product streams.
Well flow rate, production and ultimate recovery profiles have been completed for Galactica/Pegasus by Sproule.
Development planning
Further engineering and market work is underway to refine the initial and expanded planned development configuration and forecast helium and potential CO2 production and cost estimates.
“Galactica/Pegasus development planning is advancing with a range of commercialisation pathways
under consideration, including an initial leased plant and third-party operated option with expansion expected to include a potential CO2 by-product stream,” Spry said.
“The third-party owned Red Rocks Helium Project adjoining Galactica recently commenced selling helium into the market from two wells, via an IACX-operated helium recovery plant.
“Not only does this project demonstrate the expected viability of our Galactica project, it also validates the broader commercialisation model of Blue Star’s chosen development pathway at Voyager.”
First helium production at Voyager remains on track for the fourth quarter of 2023.