Quantum Helium Ltd (AIM:QHE) has cleared a key regulatory hurdle in Colorado after the US Bureau of Indian Affairs approved the assignment of the Sagebrush lease to the AIM-listed group, where it holds a 90% working interest.
Chief executive Howard McLaughlin described it as "a major milestone", highlighting that it allows the firm to advance the project.
The approval paves the way for Quantum to be appointed operator of record and then start an extended production test at the Sagebrush-1 well, which the company said it intends to commence as soon as operatorship is finalised.
Quantum added that all long-lead equipment required for the test has already been secured, allowing it to move rapidly into operations.
Testing will initially target the Leadville Formation. Quantum said historic drill stem testing of the Leadville interval flowed non-combustible gas later confirmed to contain 2.76% helium, alongside methane and heavier hydrocarbons, while wireline logs identified around 94 feet of net gas pay. The well was drilled to roughly 7,467 feet, cased and remains available for re-entry.
The planned programme includes acid stimulation and sustained flow testing to measure productivity, reservoir characteristics and gas composition, with the results intended to support reservoir modelling and development planning. Quantum also pointed to an independent Sproule ERCE evaluation estimating 2U gross prospective helium resources of 134 MMscf at Sagebrush (269 MMscf in the 3U case).
"The upcoming extended production test will allow us to apply modern completion techniques, including acid stimulation, to properly evaluate the productivity of the Leadville reservoir. The data generated will be critical in confirming flow rates, reservoir performance and the broader commercial potential of the Sagebrush helium accumulation."
"With 3D seismic confirming the size and geometry of the Leadville structure, we believe the project is now well positioned to demonstrate its value through this production test."