Noble Helium Ltd (ASX:NHE, OTC:NBHEF, FRA:GN1) earlier this week said it had refined its upcoming helium drilling campaign in Tanzania after 3D seismic reprocessing and gravity anomaly analysis identified two optimised firm well locations at the North Rukwa project.
Chief exploration officer and co-founder Justyn Wood told Proactive the latest work formed part of the company’s continuing effort to reduce risk before drilling. He said the reprocessed seismic and gravity data were independently pointing to the same interpretation, adding that “the most plausible explanation that is common between the two techniques is that there’s gas in the subsurface.”
Wood said the company was preparing for the possibility of encountering multiple gas lenses during the campaign. The first well is designed to target the shallower section of the structure, from zero to around 1,000 metres, while the second well is expected to test deeper formations from around 1,000 metres down to 1,750 metres or nearly 2,000 metres. The wells are expected to be nearly half a kilometre apart.
For investors, the immediate catalyst is the expected August spud. Wood said Noble Helium had four objectives for the programme: demonstrating helium in gas phase, collecting enough data to support a bookable contingent resource, testing the company’s belief that helium concentration should increase with depth, and using the results to unlock the broader North Rukwa portfolio.
He described gas-phase helium as “the most likely pathway to monetization” and said a discovery would help move the project beyond a prospective resource towards a position where Noble Helium could make decisions around commercialization.
Wood said the deeper Karoo formations were important because the company expects the helium concentration to increase with depth. He added that previous modelling work with Oxford University showed that gas phase should be present at that level in this location.
The scale of the opportunity remains a key part of the investment case. Wood said North Rukwa has a 225 Bcf mean unrisked prospective resource, based on an independent expert view using the company’s current data. He said that could place North Rukwa among the top three helium resources globally, describing it as “an enormous amount of helium.”
Ahead of the expected spud, Wood said the final long-lead items were due to arrive, while camp construction and civil works were underway. The rig is expected around mid-August, with drilling to follow soon after.
Interview highlights
- Noble Helium has refined its Tanzania helium drilling campaign after 3D seismic reprocessing and gravity anomaly analysis.
- The work has identified two optimised firm well locations at North Rukwa and helped reduce operational risk ahead of drilling.
- Justyn Wood said the seismic and gravity data independently point to the same likely interpretation: gas in the subsurface.
- Noble Helium expects the drilling campaign may encounter multiple gas lenses.
- The first well is expected to test the shallower part of the structure, while the second will target deeper formations down to around 1,750 metres or nearly 2,000 metres.
- Wood said the campaign has four objectives: demonstrate helium in gas phase, gather data for a bookable contingent resource, test whether helium concentration increases with depth, and unlock the broader North Rukwa portfolio.
- The company expects the Karoo formation to be important because it is effectively the first reservoir on basement at North Rukwa.
- Wood said prior modelling work with Oxford University indicated gas phase should be seen at that depth in this location.
- North Rukwa has a 225 Bcf mean unrisked prospective resource, according to an independent expert view cited by Wood.
- Camp construction and civil works are underway, with the rig expected around mid-August.
Proactive: Noble Helium has refined its upcoming helium drilling campaign in Tanzania. After 3D seismic reprocessing and gravity anomaly analysis, the company has identified two optimised firm well locations and reduced operational risk. Here to discuss the campaign, including the expected August spud, is chief exploration officer and co-founder Justyn Wood. Justyn, it’s good to see you.
Justyn Wood: Thanks, Jonathan. Thanks for having us on board. It’s good to see you as well.
Proactive: It’s a pleasure to have you. Talk us through the seismic and gravity work that has just been done, and what that shows you at North Rukwa.
Justyn Wood: We’re quite excited about the way this work has worked out. It’s the ongoing de-risking work that we do. There’s no rest until we’re actually drilling.
I’ve been asked to draw analogies around it, and it’s like going to the doctor. You go to the doctor and they send you off for a scan, and then they send you off for some blood tests. The scan and the blood tests collectively say, “Yeah, this is likely what’s going on.”
We’ve now got reprocessed seismic to better image the deeper section, and we’ve got the raw gravity data. Independently, both are telling us the same thing: that the most plausible explanation common between the two techniques is that there’s gas in the subsurface.
That’s been the whole point of doing the work. It has taken it even further. The coincidence of the two anomalies is suggesting that we’ll find more than one, in fact multiple lenses of gas as we drill. That’s our expectation and it’s what we’re preparing for.
Proactive: I’m guessing that expectation was why you decided to move that first well location.
Justyn Wood: Yeah. The structure migrates with depth. The crest of it moves laterally to the northeast as it gets deeper, following a fault.
We’ve decided that we want to fully test this North Rukwa structure first. There are a number of other structures around this main one, but we’ll probably test this one first by drilling the first well to optimally target the zero to 1,000-metre part of the structure, and then drill the second one to go from around 1,000 metres down to the deepest 1,750 or nearly 2,000 metres.
The wells will be nearly half a kilometre apart.
Proactive: With the spud expected in August, what are you hoping to find?
Justyn Wood: We’ve got four very clear objectives from this campaign.
First is to demonstrate helium in gas phase. To us, and it should be clear to everybody interested in the helium industry, that is the most likely pathway to monetization. The gravity and the seismic, and our understanding of the whole patient, if you like, are telling us that North Rukwa is a very good place to test that.
Second, we want to collect the information that we need to get to a bookable contingent resource. That means it is no longer prospective, where we think there’s something there, but we’ve actually discovered something. We want to quantify that within a sensible range so that we can make decisions around monetization.
The third objective is to confirm the thesis that we believe helium concentration should increase with depth.
Collectively, those three lead to our fourth objective, which is to unlock and get going on the rest of our North Rukwa portfolio. Those are the four objectives from these wells.
Proactive: Why are those deeper formations important for helium?
Justyn Wood: Like I said, we expect that helium concentration will increase with depth. The Karoo at this North Rukwa location is effectively the first reservoir on basement, and that’s where we’re expecting our helium to be coming from.
It’s the first port of call for these helium-enriched fluids. If we’re forming a gas phase at that depth, the work we did with Oxford University a few years ago showed that all variants of the modelling showed we should see gas phase at that level in this location.
Proving that we’ve got helium in gas phase would be good for the structure. We also know from the seismic now that there are opportunities at that depth along the western margin that we hadn’t previously been able to see, which we can now see with the newly reprocessed 3D data.
Proactive: What would a successful two-well programme mean for the company and the North Rukwa project?
Justyn Wood: North Rukwa has 225 Bcf of mean unrisked prospective resource. That is our independent expert view using all the data that we’ve got to date.
That’s an enormous amount of helium, and each of those structures has an identified gas phase mechanism associated with it. That would put North Rukwa in the top three helium resources on the planet.
To put it in context, it’s about 37 years’ worth of current global helium demand, or, in the doctor’s analogy, about 180 years’ worth of MRI scans globally.
It’s a big project. If we can prove that the system is working, we hope and expect that will get us to early monetization and also unlock the rest of the basin.
Proactive: Spud in August is not far away. What can we expect to see in the lead-up to that?
Justyn Wood: We’re expecting the last of the long-lead items to arrive. Camp construction is underway and the civils are now underway, so we’ll have everything set up for the arrival of the rig, probably mid-August. Then we’ll be up and running pretty soon after that.
Proactive: Plenty to look forward to. Justyn, thanks for your time this morning.
Justyn Wood: Thanks, Jonathan. Exciting times.