Mosman Oil and Gas Ltd (AIM:MSMN) told investors that drilling operations are now underway for the Barclay-TH 295 106A well at the Billy Goat project in Colorado.
It is the first of five planned wells in Mosman’s partnership with Vecta Oil & Gas.
After a revision to its deal with Vecta, as announced yesterday, Mosman now has a larger stake in the project, owning 90% (up from 20%) by covering 100% of the well costs. Vecta remains the operator.
"The drilling of this Billy Goat well is exciting given the excellent lease position in a proven area of helium development and production,” said Mosman chief executive Andy Carroll in a statement.
"Each well location has been carefully selected by the very experienced team at Vecta and we believe each well has an excellent chance of discovering helium."
Carroll added: “The low-cost drilling of these wells enables data to be obtained at very reasonable cost.”
He also highlighted the significant nearby infrastructure including nearby road and pipeline access plus a helium plan, around 100 miles away.
The Barclay well will be drilled down to 800 feet, and will test the Lyons Sandstone formation.
It is planned that wireline logging will be conducted at total depth to assess reservoir and fluid properties. Any encountered gas will be tested for concentration levels, including helium.
Nearby, in the Texaco Cynthia True-1 well, helium concentrations have been measured as high as 8.8% and 11%.