Share this Story: Global Helium Acquires Second Production-Ready US Helium Property The content in this section is supplied by GlobeNewswire for the purposes of distributing press releases on behalf of its clients. Postmedia has not reviewed the content. by GlobeNewswire Jun 08, 2022 • June 8, 2022 • 6 minute read Calgary, ALBERTA, [...]
Share this Story: Global Helium Acquires Second Production-Ready US Helium Property
The content in this section is supplied by GlobeNewswire for the purposes of distributing press releases on behalf of its clients. Postmedia has not reviewed the content.
Jun 08, 2022 • June 8, 2022 • 6 minute read
Calgary, ALBERTA, June 08, 2022 (GLOBE NEWSWIRE) — Global Helium Corp. (CSE: HECO) (OTC: HECOF) (the “Company” or “Global”), one of Canada’s largest helium exploration and development companies, is pleased to announce it has acquired over 15 contiguous sections of previously tested and proven helium property in the Rudyard area of Montana. This second US acquisition (see Global news release dated May 18, 2022) is on a well-known, helium-proven structure, which has previously produced and tested 1.3% helium at significant flow rates.
Through an option agreement, the Company can elect to increase its landholdings by over 60% to over 24 sections. The option agreement has been signed with a private company and can be exercised at the Company’s election, if results meet expectations.
There are two pre-existing wells on the property, both of which tested extremely favorably for both helium content and overall flow rates. The first well, drilled by Texaco in 1960, flowed at 4.3 mmcf/day with 1.3% of that gas stream being helium, which calculates to over 55 mcf/day of helium.
The most recently drilled well was completed by a private company in 2012, which tested 0.9% helium with a flow rate of 2.5 mmcf/d and 545 psi of tubing pressure, indicating a strong reservoir and the potential for higher absolute overall rates. With improved drilling techniques, and updated completion and testing methodologies, the Global team expects to materially improve upon these results.
The combined helium rates equate to over 78 mcf/day (28,530 mcf/year). High purity helium has reportedly sold on the spot market at rates well in excess of US$1,200/mcf.
Using existing cash on hand, the recently drilled well can be immediately recompleted and a production facility can be purchased “off the shelf” given that there was no material CO2 or methane in the gas streams, meaning extraction and purification would be technically simple and low cost. To this end, the Company has already engaged global industrial gas suppliers and off-takers, specifically to commence production at Rudyard.
With thoughts of expansion and capturing additional value during this robust helium market boom, the Company has identified multiple additional drilling locations on this large structure, which could be drilled and tied into the Company’s Rudyard production facility. Infrastructure in the area is plentiful, in part, thanks to extensive historical oil and gas development nearby. Roads, welcoming landowners, readily available services and other general infrastructure are all easily accessible in the area.
Jesse Griffith, President of Global Helium, commented, “The Rudyard acquisition is a monumental step forward for our shareholders, as it provides an immediate pathway to thrust Global into a helium producing, cash-flowing company. The acquisition also brings an additional core area into the Global portfolio that has been substantially de-risked and is already set for expansion through the option agreement. We now have multiple assets with proven helium production and, when we combine those with the scale and potential of our Saskatchewan land base, the future cash flow and massive expandability continues to excite our team and shareholders.” Griffith added, “I am very happy to see the Global team continuing to meet or exceed the corporate development plans that were communicated previously. Communicating our plans, setting expectations and exceeding those expectations is a core focus for the Global team and is something we will continue to do going forward.”
High purity helium is used for manufacturing of semiconductor chips, chromatography and semiconductor processing, lab research, MRIs, a shielding gas in welding, a cooling gas for fiber optics, gas chromatography, and mass spectrometry.
Demand for helium continues to increase, driven by semi-conductor manufacturing and MRI growth, while security of supply is increasingly under pressure.
Supply and demand conditions are expected to continue to worsen, such that demand is expected to (i) continue its aggressive growth curve and (ii) continue to outstrip supply for the foreseeable future. Driven by multiple technical and geopolitical factors, the extreme supply shock is driven by:
- A total of six helium plants have experienced shutdowns since the beginning of 2022;
- A fire and an explosion at facilities under development in Russia has delayed potential production by years
- A fire at the Haven Midstream Gas Plant in Kansas taking a significant volume of US production off-line for the foreseeable future, if not permanently
- A drastic reduction in helium production in Arzew, Algeria to better meet natural gas shortages being experienced in Europe
- Implementation of sanctions against Russian suppliers, namely, Gazprom; and
- The Federal In-Kind helium program ending in September 2022, at which point all federal purchasers, including NASA and all government labs, will be forced to buy helium on the open market.
Global Helium is expected to form part of the long-term supply solution that has plagued the industry for decades. The helium that Global is pursuing is defined as “Green Helium,” that is, it is produced not as a by-product of natural gas production. Global Helium is one of the earliest movers to pursue helium in its purest form, as a standalone business, without requiring hydrocarbon production as the primary pursuit and product.
ON BEHALF OF THE BOARD OF GLOBAL HELIUM CORPORATION