Blue Star Helium Ltd (ASX:BNL, OTC:BSNLF) has identified high concentrations of 8.8% helium in the BBB#1 water well within the Voyager Prospect in Las Animas County, Colorado.
Gas analysis of samples obtained while drilling resulted in a calculated air-free gas composition from the Lyons formation in BBB#1 of 8.8% helium, 78.7% nitrogen and 12.5% carbon dioxide.
Importantly, this represents a similar gas composition to the historic Model Dome analogue production and one of the highest in-situ helium concentrations both in the U.S. and globally.
The market welcomed the news with shares trading as high as A$0.065 intraday, a 23% improvement on the previous close.
“Strong validation of mapping”
Blue Star managing director and CEO Trent Spry said: “The whole Blue Star team is incredibly proud of this result.
“Historic wells in the Voyager area were reported as dry holes, and plugged and abandoned, however, our interpretation was that gas had been missed.
“This result proves that gas is trapped in the Voyager prospect and is a strong validation of that interpretation and our prospect mapping.
“Encouragingly we have also interpreted gas from historic well data in the Argo, Galactica and Pegasus prospects, which we have yet to confirm with new drilling activity and data.”
Water well drilling program
Blue Star had previously agreed to fund the drilling of three water wells for local ranch holders which includes BBB#1.
In the process of drilling the wells, the company is seeking to gather data from the wells that might aid in the further definition of its helium prospects.
The wells are drilled and owned by the ranchers and Blue Star does not have any interest in them, however, the company does own a mineral lease interest at each of the well locations.
The BBB#1 water well was not conventionally tested, instead, the company ran a suite of logs including gamma-ray, resistivity (induction), micro log, density and neutron logs.
“Model Dome field analogue.”
Spry adds: “We have improved the water well gas sampling protocol from that utilised at Hill#2.
“The new protocol has allowed less diluted samples to be collected and enabled air-free gas calculations to be performed at BBB#1, which we were unable to do at Hill#2.
“The air-free calculated helium content from gas sampled while drilling BBB#1 has confirmed helium concentrations in the order of those reported from historic production from the Model Dome field analogue.
“This is further, modern evidence that the area contains some of the highest helium concentrations in the United States and globally – a dynamic which drew us to Las Animas County and has us excited about the targeted commercialisation pathway ahead for Blue Star.”
Forward plan
Blue Star is in discussions with other ranchers regarding the funding of further low-cost water wells given strong initial outcomes and additional data benefits of the program.
The company expects to receive the approved final permit to drill the Enterprise 16#1 well during 2021 and to commence drilling the well promptly thereafter.