Blue Star Helium Ltd (ASX:BNL, OTC:BSNLF) has entered into an agreement to jointly develop helium leases in an area of mutual interest (AMI) with private corporations, Vecta Oil and Gas Ltd (25%) and Prospero Oil and Gas LLC (25%) in Las Animas County, Colorado, USA.
The AMI includes Blue Star’s Serenity prospect, directly to the southeast of its Galactica and Pegasus prospects. Collectively, Vecta and Prospero will contribute 10,212 acres, adding to Blue Star’s 4,334 acres for a total of 14,551 acres across the AMI.
The first well is targeted to begin drilling in early second quarter of 2022.
Key benefits to Blue Star from the agreement include:
- Wider exploration (and potentially production) well exposure on an accelerated basis;
- Clear synergies with Blue Star’s own exploration and evaluation activities;
- Direct access to existing helium production expertise; and
- Strong validation of the quality of Blue Star’s tenure and personnel.
Accelerating helium exposure
“This is an exciting transaction for Blue Star and one we have been working towards with the Vecta team for some time now,” Blue Star Helium managing director and CEO Trent Spry said.
“We look forward to providing an idea of the potential of the Serenity area upon completion of a prospective resource estimate for the AMI, which is targeted for next quarter and the drilling of the first well in the AMI anticipated for early Q2 CY2022.
“Blue Star has been leasing in this part of the county ever since we identified the Serenity prospect in 2019.
“This transaction enables us to increase our interests in this prospect with the added benefit of expected near-term drilling by an experienced operator with strong alignment in the outcome
“Our other activity schedule in Las Animas remains unchanged. We expect to be drilling shortly at our maiden Enterprise 16#1 helium exploration well and then undertaking an extensive drilling program across multiple key prospects through calendar 2022.
“What formation of the AMI delivers us is new well exposures beyond our own drilling activities and on an accelerated basis.”
Vecta Oil and Gas is an existing helium producer in Cheyenne County, Colorado, and Utah. The company will be leading operator of the AMI’s joint activities, with a Form 2A application for four helium exploration wells within the AMI already lodged.
The approval hearing is set for February 2022, with the completion of a prospective resource estimate for the AMI targeted for the first quarter of next year.
About Blue Star Helium
Blue Star Helium is an independent helium exploration and production company, headquartered in Australia, with operations and exploration in North America.
The company's strategy is to find and develop new supplies of low-cost, high-grade helium in North America.