Independent exploration and production company Grand Gulf Energy (ASX:GGE) reports it has received approval of the permit to drill at its Red Helium Project in Utah, US.
The permit was approved from the Utah Division of Oil, Gas and Mining (UDOGM) and enables the company to move forward with its plans to drill the Jesse-2 helium well.
Grand Gulf Energy notes that the Jesse-2 well will exclusively target the gas zone(s) discovered in Jesse-1A and will incorporate managed pressure drilling, which will allow testing while drilling the target reservoir zone.
“With the highly encouraging results from Jesse-1A … the company is excited to be back in the field for Jesse-2″
Speaking on the drill permit, Grand Gulf Energy Managing Director Dane Lance said: “With the highly encouraging results from Jesse-1A, including a helium grade of 1% greatly exceeding pre-drill expectation, the company is excited to be back in the field for Jesse-2.
The Jesse-2 well engineering has incorporated the lessons learned from the evaluation program on the maiden helium exploration well to minimise risk of water production by staying high in the column. Coupled with the managed pressure drilling program to maximise well deliverability, which also allows preliminary flow evaluation whilst drilling, the drilling of Jesse-2 in Q1 2023 will be an exciting period for the company.
The compelling fundamental commercial pillars of the Red Helium Project remain unchanged with the ability to quickly monetise a commercial well to generate near term free cash flow with minimal time and cost.”
The company also notes that the Jesse-2 helium well will be situated 1.5 miles southeast of the Jesse-1A discovery well and within the same structure which intersected a 200ft gas column and returned 1% helium to surface.
In addition, the Jesse-2 well will be situated adjacent to the existing pipeline that is connected to helium refiner and offtake partner Paradox Resources, allowing potential for near immediate monetisation of a commercial well.
Grand Gulf Energy is an ASX-listed company that is working to capitalise on US helium opportunities. The company’s Red Helium project is located in the State of Utah’s prolific helium Four Corners area of the US and has a gross unrisked P50 Prospective Resource of 10.9 bcf recoverable helium.
The project comprises 250,713 acre area of mutual interest (AMI) with over 29,000 acres leased in drill-friendly Utah. Moreover, the project is geologically analogous to the Doe Canyon Field, which is situated about 15 miles due east of the project and is currently producing about 10.7 million cubic feet of helium per month.
With the drilling permit now received, drilling is expected to commence in Q1 2023 with the company currently in advanced negotiations with multiple rig operators.
