Quantum Helium Ltd (AIM:QHE) has provided an operational update on the extended production test at its Sagebrush-1 well in Colorado, with perforation of the Lower Leadville Formation scheduled to begin next week.
The Lower Leadville is the primary helium-bearing reservoir at Sagebrush-1, and the upcoming test is designed to evaluate flow characteristics and confirm historical helium concentrations of 2.76% recorded at the well.
Preparatory work completed over the past week includes cementing operations across the currently producing Ismay zone, pressure testing of casing, and drill-out of cement and bridge plug.
The company said the testing programme represents a critical step towards converting prospective helium resources into reserves and advancing the project towards commercial development.
Quantum holds over one billion cubic feet of 2U prospective recoverable helium resources across its Sagebrush and Coyote Wash projects in Colorado, which it describes as one of the largest independently assessed helium portfolios among London-listed companies.
Chief executive Howard McLaughlin said the upcoming perforation marks "the transition into the key testing phase" and described the Lower Leadville as the interval the company believes "holds the greatest potential."
McLaughlin added that Sagebrush is "just one part of a much larger growth story," pointing to multiple drill-ready targets at Coyote Wash as further upside.
Quantum's existing oil production at Sagebrush has continued to generate revenue, contributing towards funding of helium-focused operations while the testing programme advances.
The company said it would provide further updates as flow testing results become available.