HeLIX Exploration PLC (AIM:HEX) this week confirm a new discovery of helium during testing at its Clink#1 well located in the Ingomar Dome project, in Montana – and chair David Minchin joined Steven Gunnion in the Proactive studio.
Minchin said the well results exceeded expectations and pointed to strong commercial potential.
Here we take another look at what was said.
Proactive: I'm joined by Helix Exploration Chairman David Minchin. David, very good to speak with you, particularly when you're out with exciting news.
You've discovered helium during testing operations at the Clink#1 well at Ingomar Dome. So, a big milestone for the company.
David Minchin: Yes. Thank you. Thanks so much, Stephen. Yeah, to go from IPO to discovery in just over six months. We are very pleased with what we've seen.
We've got some excellent results. We're looking at 2.5% helium and 55% hydrogen from out of a Flathead. It is all above what anyone could have expected.
Bear in mind, of course, that the CPR and the NPV from the scoping study were both done on a helium grade of only 1.5%.
Proactive: I see you talked about the gas sample test at 2.5% helium, also 55.2% hydrogen. Are you encouraged by what you've come across so far?
David Minchin: It's incredible, and it blows us away. I mean, we clearly sat on a large-scale, highly commercial closure. It's really exciting stuff.
Proactive: Take us through the flow rates, David. How about those?
David Minchin: So, yeah, look, I'm not worried about slowing. Slow rate isn't a problem. I mean, we saw excellent porosity in the mud logs, and we saw a strong gas effect in the wire lines, both of which are pointing towards a very good reservoir. You must remember, we were using very heavy mud when we were drilling. We were using mud at 11 PPG to try to stop gas flowing into the well while we were drilling.
Well, that might have been a bit too effective because it must have invaded into the reservoir and caused some sort of formation damage. That being said, it's not surprising that a little bit of stimulation will be required to get the wells flowing.
Proactive: David, you mentioned stimulation might be necessary. Could you explain what stimulation is?
David Minchin: So, yeah, stimulation could be as simple as spotting a little bit of acid on the well to dissolve the mud where it's packed against the side of the well.
Another option involves scratching to induce permeability past the mud wall and allow us to access the actual reservoir. All these practices are incredibly common and highly cost-effective in the USA.
Proactive: You particularly highlighted the Amsden Formation, which you say is a robust gas producer. But also, the Charles Formation is exhibiting strong pressure indications as well.
David Minchin: Yeah. I mean, all of our reservoirs are looking really good. The Amsden is already generating a commercial flow rate.
We're looking at sort of open flow of around 8,000 cubic feet per day. I mean, that's a commercial producer with just that one reservoir.
Once you've got the Flathead and the Charles flowing, this thing will really come together.
Proactive: So, David, while testing is ongoing at Clink#1?
David Minchin: Yeah, we are really excited about what we've seen at Rudyard, which is much larger. It's free of mud and showed a strong zone in the mud logs.
We've got it cased, and we're ready to start testing very soon, so between now and Christmas.
We should be looking at this being just the first of several discovery announcements to be made.
Proactive: Congratulations again on these results, David. I'm sure we'll be chatting to you again very soon.