Blue Star Helium Ltd (ASX:BNL, OTC:BSNLF) is preparing to commence drilling at the Enterprise 16#1 well in Las Animas County, Colorado.
The helium exploration and production company currently has its preferred drill rig at another location to complete a shallow well, after which it will move to the Enterprise property to kick off drilling next month.
Blue Star has also flagged an approval hearing for four new well applications, slated for February 16, 2022.
On top of that, the explorer has submitted drilling applications for four more helium wells, spread across the Pegasus and Galactica prospects. BNL anticipates final approval for these programs mid this year.
Drilling at Enterprise 16#1
Blue Star’s upcoming drill program represents the first approved permit to drill for a helium well in Colorado, and the first approved drilling application of any type in Las Animas County, since changes to the state’s permitting landscape were enacted in January 2021.
While kickstarting the program in February represents a minor delay, drill pad preparation is complete and Blue Star is ready to receive the rig.
Positively, budgeted dry-hole costs for drilling remain less than US$300,000.
Sammons 315310C well permit
Previously, BNL executed a deal to jointly develop helium leases in an area of mutual interest (AMI) in Las Animas with private entities Vecta Oil and Gas Ltd and Prospero Oil and Gas LLC.
The AMI includes Blue Star’s Serenity prospect, which is located immediately to the southeast of its Galactica and Pegasus prospects.
Vecta, the operator of the AMI, currently has Form 2A applications for four helium exploration well locations within the AMI that are significantly advanced.
The approval hearing for these wells has now been moved to February 16, 2022.
The first of these wells (Sammons 315310C) is targeted to commence drilling as soon as permitting and rig mobilisation allows, which is anticipated in April.
As part of the participation agreement, all parties have agreed to participate for their respective working interest shares in the Sammons well drilling.
Drilling and evaluation on this well is expected to cost less than US$150,000, net to Blue Star.
Exploration well permitting
Blue Star has submitted new drilling location permit applications for four further helium exploration well: State 35 and State 36 at the Pegasus prospect and State 9 and State 16 at the Galactica prospect.
Final approved permits to drill for these four prospective wells are targeted in mid-2022.
Blue Star also expects to submit a further five well location applications during the current quarter on the Voyager prospect.
What’s around the corner?
Thanks to permitting activity in the March quarter, Blue Star expects, at quarter-end, to have an interest in 14 wells that are permitted or under permitting.
These include:
➢Enterprise: One permitted well (Enterprise 16#1, 100% interest), expected to be drilled in February;
➢Serenity (AMI): Four permitted wells (50% interest), Sammons 315310C well expected to be drilled in April;
➢Pegasus: Two wells under permitting (State 35 and State 36, 100% interest);
➢Galactica: Two wells under permitting (State 9 and State 16, 100% interest); and
➢Voyager: Five wells under permitting (100% interest).
In addition, preliminary survey work is underway for another 33 potential drilling locations across the portfolio as part of the company’s rolling permitting strategy.
The table below depicts the respective status of these permits and their locations:
