HeLIX Exploration PLC (AIM:HEX) chair David Minchin earlier this week talked with Proactive about the successful completion of drilling operations at the Clink #1 well within the Ingomar Dome project in Montana.
Minchin was delighted by the completion of the drilling ahead of schedule and under budget, with helium shows detected across all target horizons. In an unexpected turn, up to 10.3% hydrogen was also discovered in the Cambrian strata.
Minchin highlighted the significance of the helium shows, noting that it signals helium presence throughout their system, a crucial step before wire lining and flow testing. He cautiously mentioned the potential for a hydrogen, helium, and nitrogen system in multiple formations.
Proactive: Hello, you're watching Proactive. I'm joined by HeLIX Exploration Chairman, David Minchin. David, good to speak to you this morning with good news. You've completed drilling at the Clink #1 well at your Ingomar Dome project in Montana. So, making good progress in the current program.
David Minchin: Hi Stephen, yes, absolutely delighted to have completed the drilling operations in Clink #1.
The drilling operations only took 11 days, which means that they came in significantly ahead of time and therefore under budget.
Also delighted to see the results with helium shows on every one of our target horizons and some bonus hydrogen in the Cambrian.
Proactive: Well, take us through those. I mean, you say elevated helium that you encountered. Take us through the significance of that.
David Minchin: Yeah. So, it's a very important first step for us to be able to identify elevated helium in mud shows.
Now, mud shows are a binary affair. You either have a show, or you don't. The show tells you if you have gas in the strata or if you don't.
The grade of a mud show has no relation to what's in the ground because it can be affected by hundreds of different factors, including the weight of the mud and, of course, the presence of hydrogen, which can suppress helium readings in the mass spectrometer.
What we have seen is helium shows on every one of our target horizons, which tells us that we've got helium all the way through our system. That's exactly what we wanted to see, it's a really positive result.
It gives us a great deal of positivity as we move into wire lining and flow testing, with fingers and toes crossed, to be able to announce a commercial discovery in the near future.
Proactive: David, was the presence of hydrogen unexpected?
David Minchin: I think Bo expected it, but I didn’t. It's a very positive thing. I don't think that either of us were expecting to see up to 10.3% hydrogen in the Cambrian.
I don't want to say too much because we won't know until we're done with wire line and flow testing. But it looks like we might have a hydrogen, helium, and nitrogen system in the Amsden and Charles Formations, and a helium and hydrogen system in the Cambrian strata, which includes the Flathead formation, our primary target. So that's all hugely positive.
The economics around natural geological hydrogen are yet to be proven. But if it works out, you're looking at a quite small addition to your capital cost to build an extra module on your plants to separate hydrogen from helium.
But you’re looking at a big impact on your bottom line because hydrogen can be very profitable when extracted from subsurface.
Proactive: David, what should investors be watching out for next?
David Minchin: Well, next steps are to run the wire line, which we should be targeting to run in the second half of this week, perhaps announcing results early next week.
That will identify areas with reservoir porosity and the gas effect, which we will then target with flow testing. We need to run casing and cement the casing into place. So, cement trucks are on standby and ready to roll. We’ll then be able to do the flow test.
The initial flow test is going to give us a sample of gas at the surface, which we can analyze and declare a discovery on the back of that flow test. Then over the next 30 days after that, we will be running a series of extended well flow tests to determine the long-term production rate.
It gives us all the commercial modeling information that we need to build up plans to develop our development program.
Proactive: I hope you'll keep us updated on any progress. Thank you very much for the update today, David.
David Minchin: Thank you, Stephen, it's been a pleasure to talk to you.