Royal Helium (TSX-V:RHC, OTCQB:RHCCF) - which is in the process of acquiring Imperial Helium Corp (TSX-V:IHC, OTCQB:IMPHF) - said it has received the comprehensive simulation study for multistage hydraulically fractured horizontal wells completed by Dr Gary Zhao, Professor of Petroleum Systems Engineering at the University of Regina.
The Saskatoon-based company said that over 600 simulations were run with multiple variables, using the data from Royal's drill-stem testing (DST) and Diagnostic Fracture Injection Test (DFIT) operations in the Climax-4 well. Royal is currently evaluating several of the viable production well models presented and will select the ultimate design, or designs that will have the largest deliverability with the quickest payback period.
Given the large areal extent of over 30 sections spread over more than 30 square miles of Nazare, multiple wells will be considered, said the company. Royal anticipates well design finalization and drilling of the first Nazare well in late 2022.
READ: Royal Helium identifies six high priority targets from final seismic results at Val Marie
In a statement, John Styles, lead engineer for Royal said: "The development of a large scale unconventional primary helium reservoir is a first for Saskatchewan, and perhaps the world. Although the simulation study evaluated well configurations with as many as 12 lateral legs, we will likely focus on the 1-3 leg scenarios with 1-mile-long laterals.”
He added: “These scenarios are single section (1 square mile) development plans whereas the areal extent so far identified by seismic exceeds 30 sections. With these results and after the first horizontal into Nazare, we will plan to strategically exploit Nazare to its fullest extent."
The firm said the entire simulation study encompassed 612 simulations designed to evaluate the combination of factors that could yield a simulation result with a forecast initial production rate above 1 million standard cubic feet per day (MMSCFD) for as long as possible.
"We are extremely pleased with the outcome of Dr Zhao's study, the validation that our Nazare discovery is capable of large-scale deliverability is a huge addition to our "conventional" production profile beginning with our first two processing plants at Climax and Steveville,” said Royal Helium CEO Andrew Davidson.
Davidson noted that the company is planning the first Nazare well later this year and, predicated on its outcome, the design work for an additional, larger permanent facility for the Climax Nazare reservoir.
“The question of whether the Nazare will be a producible reservoir has now been answered and we will move aggressively towards the first production well and further, will make plans toward exploiting the whole reservoir," he added.
Royal Helium engages in the exploration and development of helium properties in Canada. It controls over 1 million acres of prospective helium land in southwestern and south-east Saskatchewan close to existing oil and gas infrastructure and a significant portion of its land in close proximity to existing helium-producing locations.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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