Blue Star Helium Ltd (ASX:BNL, OTC:AZZEF) has progressed a water well drilling program designed to provide water to local ranch holders and generate new data near its Las Animas landholdings in Colorado.
The independent helium exploration and production company holds multiple lease interests in the area, some of which abut local ranch holders’ land. The wells are drilled and owned by the ranchers, and Blue Star does not hold an interest in them.
BNL agreed to fund the drilling campaign, which uses vastly different techniques than helium gas drilling but may provide some useful data on the geography of the area.
Encouraged by outcomes
Neutron and density wireline logs run in the well show approximately 26 feet of gas effect at the top of the high-quality Lyons formation, with a free water level interpreted in the well at the base of the gas effect.
While the composition of the gas is unable to be tested in the water well configuration, Blue Star is highly encouraged by this indicative outcome.
Water well drill techniques
While the company hopes to glean insight from the drilling, water wells are excavated in a very different method from helium gas wells. The water wells are air drilled with increasing pressure, utilising foam to lift cuttings if significant water is encountered.
The result is highly diluted formation gas in the return, meaning the water wells cannot be conventionally tested.
Well progress
The first water well commenced drilling during the June 2021 quarter but was stymied by significant shallow water and ongoing delivery delays of additional equipment, which remain pending.
Initial data obtained to current depth supports the company’s stratigraphic interpretation of the area around its Galileo prospect.
The second well is interpreted to be down dip from Blue Star’s Enterprise 16#1 application and has now been completed.
Resistivity logs across the gas effected part of the Lyons formation suggest a transition zone above the free water level. As noted earlier, the composition of the free gas in the Lyons formation could not be determined because the nature of the water well configuration precludes the use of a mass spectrometer to accurately identify the gas’ composition.
Similarly low resistivity responses on logs have been identified from abandoned wells reported to be blowing low pressure gas, including a well within the Model Dome field boundary.
The Lyons formation play in this area is evidenced by the historic helium production from Model Dome, which had an average helium content from the Lyons formation of 8%, and at the historic Gov. Cynthia True well, which tested 8.8% helium.
Blue Star expects to receive the final permit to drill the Enterprise 16#1 well during the current quarter.
Next steps
Drilling of the third water well (BBB#1) is expected to commence in November. This well is located close to Blue Star’s Voyager Prospect, which is approximately six miles north from the Model Dome field.
It is anticipated that drilling of the Hill#1 well will be completed after drilling of BBB#1.
The company believes there is clear potential to expand water well drilling program given strong initial outcomes and additional data benefits.