Helium and natural gas company, D3 Energy Ltd, has confirmed significant helium and gas potential in South Africa as demand for the commodities outstrip supply.
The Company is determined to unlock the resource potential of its 100% owned flagship ER315 asset, in South Africa’s Free State Province.
With world-class helium concentrations ranging between 5-9% and significant discovered natural gas resources, D3 Energy is positioned to address growing global helium demand while securing South Africa’s energy security and supporting energy transition efforts.
“We believe our asset is becoming a globally significant helium project at a time where supply is struggling and will struggle to meet both current and predicted demand,” D3E Managing Director and CEO, David Casey said.
He added, the Company is also, “emerging as a key provider of natural gas in South Africa, addressing energy delivery challenges, supporting the country’s sustainable energy transition and creating value for shareholders.”
Helium: a critical resource for the 21st century
As a critical resource that plays a vital role in various high-tech industries and cutting-edge applications, the price of helium is set to soar in coming years with an existing supply shortage expected to continue.
Helium prices are already at record highs levels, having gained 18% per annum over the past five years — a trend that is predicted to continue to increase.
Looking ahead, demand is predicted to remain high and to continue to grow. A finite resource, helium underpins diverse industries due to its unique thermal conductivity, inertness and cryogenic properties.
There is no way of manufacturing helium artificially and most of the world’s reserves have been derived as a byproduct of the extraction of natural hydrocarbon gas.
One of its most significant uses is in the manufacturing of semiconductors. It is also essential for the cooling of nuclear reactors and in the context of the global energy transition, helium-cooled reactors are emerging as a key technology for safe and efficient nuclear power generation.
Helium, irreplaceable in certain applications, is experiencing demand growth of 5-6% annually — double the projected supply growth. Global helium demand is expected to rise from 6-billion-cubic-feet (BCF) to just over 8-BCF by 2030. According to independent market intelligence group IDTechEx, global helium demand is expected to nearly double by 2035.
Helium supply is anticipated to grow in response to increasing demand; however, geopolitical risks pose challenges to stability, with significant production concentrated in Qatar and Russia.
New medium and long-term helium supply is primarily derived as a by-product of planned oil and gas mega-projects, which are high cost, frequently delayed and can be subject to geopolitical influences.
Consequently, the helium market is expected to remain tight for an extended period, with lower than anticipated global output and potential supply deferments — particularly if the large projects in Qatar and Russia are delayed.
Prospective for methane
The opportunity in helium is clear, but the market fundamentals of D3E’s other production product, methane, also remain robust.
South Africa continues to experience significant energy shortages and the country appreciates the importance of natural gas to solve its current issues, and to play a part in the energy transition. The country currently imports gas via pipeline from the Pande and Temane fields in Mozambique with significant and growing shortfalls announced from 2024.
D3 Energy is ideally placed to not only meet this shortfall but to help South Africa transition more broadly to a more balanced, cleaner and lower emissions energy market.
Developing a globally significant helium project
D3 Energy has delineated a significant Contingent and Prospective Resource for both helium and natural gas at the ER315 project, which spans four permit areas totalling 442,750 acres and is adjacent to existing producer Renergen.
The Company notes that converting just an initial percentage of its sizeable 2C contingent helium resource into reserves would translate into “enormous value”.
D3E began production testing at ER315 in mid 2024 — successfully flowing gas at legacy gold exploration borehole, RBD03, that was drilled within the area of ER315 back in 1983. D3E then delivered further positive results from other boreholes across the project.
Initial results confirmed world-class helium concentrations averaging around 5%, with individual boreholes reporting helium grades and as high as 9%. Recent production testing demonstrated material gas flows, including 191 Mscfd from newly drilled borehole RBD10 and 147 Mscfd from RBD03.
Currently nine boreholes are flowing gas within ER315, with three wells at measurable rates. Notably, the Bloemskraal boreholes have potentially been flowing gas at these rates since the early to mid 1980s, demonstrating the durability of the reservoir system and the potential for sustained production
These results are central to the Company’s Production Right (PR) application, which is critical to advancing ER315 into development.
D3 Energy’s strategic partnership with NOVO Energy, a South African gas retailer and major shareholder, supports the pathway to commercialisation. NOVO, an integrated energy and technology company, specialises in the procurement and development of methane-rich gas sources, gas infrastructure development (CNG/LNG/pipelines) and tailored customer solutions, including industrial applications, NGV fuel, power generation and feedstock supply. D3 and NOVO are progressing discussions toward initial offtake agreements to further solidify the project’s commercial framework.
Through a methodical and technical exploration approach, D3 Energy has consistently delivered strong drilling and production testing results, providing investors with exposure to two critical commodities: helium, a key input in high-tech industries and natural gas, vital for South Africa’s energy security and transition efforts.
The Company describes ER315 as a globally significant helium project, addressing the growing global helium supply-demand gap while becoming an important provider of natural gas in South Africa. These efforts contribute to resolving energy deliverability challenges and supporting the country’s sustainable energy transition.