Shares in Imperial Helium Corp (TSX-V:IHC, OTCQB:IMPHF) were on the up as the company hailed production testing at its two wells in Alberta, Canada, which confirmed the potential deliverability of between 10 and 15 million cubic feet of gas per day (MMcf/d) supporting the group's move towards commercial production.
The findings on raw gas deliverability come from the firm's first two wells - IHC-Steveville-2 (10-22-020-12W4) and IHC-Steveville-3 (12-12-020-12W4) - from which, the company aims to supply a production facility at Steveville capable of processing 10 to 15 MMcf/d combined.
At IHC-Steveville-2, test results from the Blow-out Zone (BOZ) showed rates of between 5 and 8 MMcf/d, showing it to be the first potentially commercial production well, while the comparison of well logs between IHC-Steveville-2 and IHC-Steveville-3 showed continuity of the BOZ thickness and reservoir properties.
The potential deliverability of gas from IHC-Steveville-3 is over 7.5 MMcf/d, noted the company, with preliminary deliverability estimates from the BOZ combined with production test analysis of the new Sub-Salt Zone (SSZ) for this well of 2.5 MMcf/d.
READ: Imperial Helium reveals positive results from independent tests on the Sub-Salt Zone in Steveville-3 well showing "valuable" gas
"We are incredibly excited by what we are seeing from IHC-Steveville-3," said Dr David Johnson, CEO of Imperial Helium, in a statement.
"The strong response of the BOZ and new SSZ in IHC-Steveville-3 confirms sufficient deliverability from both IHC-Steveville-2 and IHC-Steveville-3 to produce 10-15 MMcf/d of raw gas for three years before declining.
"This data strongly supports an aggressive advancement towards commercial production," he added.
Among the highlight results from the first three days of production testing of the BOZ in IHC-Steveville-3 were an immediate strong gas flow to surface upon perforating 9 metres (m) of pay in the BOZ and helium concentration of 0.44%
Also, an initial 2-hour clean-up period with sustained pressure and flow was estimated at 5 MMcf/d, while a second 5.5-hour clean-up period, after acid stimulation, with sustained pressure and flow estimated at 8 MMcf/d.
Upon completion of production testing of IHC-Steveville-3, the company plans to return immediately to IHC-Steveville-2 to begin production testing the Sub-Salt Zone (SSZ).
Imperial Helium is focused on advancing its helium assets in North America, primarily at its Steveville, Alberta helium discovery. Many industries rely on the gas, including in healthcare, electronics and semiconductors as well as aerospace and leak detection.
In Toronto, shares in the company added around 5% to C$0.20.
Contact the author at giles@proactiveinvestors.com