Helium One Global Ltd (AIM:HE1, OTCQB:HLOGF) said the audit of its proposed drilling rig is 80% complete and so far indicates it will be suitable to begin the phase-two programme at Rukwa project in Tanzania.
Confirming that an unnamed tier-one oil and gas service company is its preferred integrated well services contractor, the company said work is underway to define a timeline to mobilise critical well evaluation equipment that will determine the start date for the drilling campaign.
Finding a suitable rig and well evaluation equipment for the East African market has been challenging due to increasing demand from oil and gas companies, said chief executive David Minchin.
“These challenges have been largely overcome and we are pressing ahead with our planned phase II drilling programme, completing the audit process on the rig and agreeing availability for provision of integrated well services,” he said.
The audit by experts at ADC Energy at its yard in Kenya has observed most key components in operation, though repairs to a module in the rig’s management system have delayed completion of the audit.
ADC has identified no major failures that Helium One’s management team said they believe would prevent it from being used successfully in a future drilling campaign.
With the expatriate drill crew currently demobilised from Kenya, the company said audit activities are due to restart in mid-August, with logistical planning to transport the rig from Kenya to Rukwa “well advanced” and expected to take approximately one month from acceptance and contracting of the rig and equipment.
“Although rig audit activities lost about a week due to an electrical fault in the rig management system, what we have seen to date gives us confidence that no major faults will be found with the rig which we believe is fit for purpose to deliver the drilling programme that we have planned,” Minchin said.
Some long lead items such as casing and drill bits have already been ordered, the company said, with other long lead items “on project mobilisation”, including drilling fluids, wireline evaluation and downhole gas sampling.
“Given the importance of these services we have approached the top names in the oil and gas industry to ensure that data quality is of the highest possible standard,” Minchin added.
“We are working with our preferred service provider to confirm mobilisation timelines for this critical equipment at the soonest possible opportunity as we move towards execution of our Phase II drilling campaign."
The company said it is working with the oil and gas service provider to finalise the delivery of an integrated drilling services package and looking to confirm the date that equipment and staff will be available in Tanzania in order to determine the earliest date that the drilling can begin.