Blue Star Helium Ltd (ASX:BNL) (OTCMKTS:AZZEF) has taken some concrete measures, including increasing land holding, expanding drilling program and raising capital, in the December quarter to boost operations
During the quarter, the company increased the landholding of its Colorado Helium Project by over 28 % to 215,000 acres thus consolidating its position over the targeted drilling prospects.
The company’s Enterprise and Galileo P50 prospective helium resources increased by 16% to 3.5 billion cubic feet of total net recoverable helium.
Maiden drilling campaign
In mid-November, the company expanded the maiden drilling campaign to a minimum of three wells and up to five wells to test several prospects in its portfolio in addition to Enterprise.
An expanded drilling campaign will maximise the prospective resources tested in the company’s maiden campaign and deliver clear advantages over the previously planned single well at Enterprise.
The US team has completed a further site visit to evaluate a potential follow-up location at Enterprise as well assess potential well locations at the Galactica, Pegasus, Voyager, and Galileo prospects with permit applications to follow.
Engineering estimates have confirmed dry hole drilling costs of US$300,000 with a further US$100,00 required to complete the well as a producer upon success.
The company’s proposed wells are technically simple being shallow and vertical, low impact due to their rural location and do not have the issues associated with hydrocarbon production.
Helium prospects and leads in Colorado
During the quarter, the company increased its acreage position by 28% in the highly prospective Las Animas region in Colorado, USA, acquiring - 32,848 gross acres for a total of US$470,000 at the Federal Bureau of Land Management (BLM) land auction in December.
The company is also investigating the impact of the recent executive order of President Biden and secretarial order of the Secretary of the Interior on the delivery of these leases to the Company.
The company’s total land position in Las Animas at the end of the quarter totalled 215,000 gross acres inclusive of the leases won in the December BLM auction.
Blue Star now has high-net contiguous leasing over 7 prospects, including Enterprise, Galileo, Pegasus, Galactica, Argo, Voyager and Prometheus.
The company will choose up to 5 wells to test a number of key prospects for its maiden drilling campaign.
The Company’s total land position in Las Animas at the end of the quarter totalled 215,000 gross (160,000 net) acres (inclusive of the leases won in the December BLM auction)
Enterprise and Galileo prospective resources
During the quarter, the prospective helium resources independently assessed at the Enterprise and Galileo prospects were increased by 16% to 2U (P50) 3.5 BCF of total net recoverable helium.
The updated assessment of the Enterprise and Galileo prospects accounts for material additional leased acreage acquired since the first assessment as well as a general audit of the calculations by independent global consultants Sproule.
The prospects are on the Lyons Formation Helium Play, which is proven in the area by the historical Model Dome field.
The company remains positive that, based on the work it has done to date, the chance of development, upon discovery, is strong.
Blue Star has identified several development options and held discussions with service providers to select a preferred option and supplier.
New Ventures – Helium
Blue Star’s cash at the end of the December 2020 quarter was approximately $4.9million
During the quarter, the company issued 171,428,572 new ordinary shares at a placement price of 3.5 cents a share to raise $6million.
Looking forwards, the company is focused on delivering its drilling program in Las Animas, Colorado and it continues to review upstream helium opportunities in North America that become available to evaluate any fit with its stated strategy.