Completion of Farm-In to Blue Star Helium’s Galactica-Pegasus Project
Helium One Global (AIM: HE1), the primary helium explorer in Tanzania, is pleased to provide the following update on the farm-in agreement with Blue Star Helium (ASX: BNL) (“Blue Star”) over the Galactica-Pegasus project in Las Animas County, Colorado, USA (“the Galactica Project”).
Highlights
· Farm-in agreement with Blue Star successfully completed, following satisfaction of all conditions precedent
· The Company to earn a 50% interest in the Galactica Project in exchange for paying US$1.5 million cash consideration and to fund the drilling of six development wells. Blue Star remains Operator of the project
· The initial six development-well drilling programme, together with the State-16 well, to form part of the initial gas gathering into the Galactica helium production facility
· Drilling of these initial six wells is expected to start during Q4 2024, with first helium production expected in H1 2025
Lorna Blaisse, Chief Executive Officer, commented:
“We’re very pleased to have completed this agreement with Blue Star and anticipate positive results from the upcoming development wells as the project advances into the production phase. This project provides Helium One with the opportunity to diversify its helium portfolio and benefit from production and revenue from first helium gas in H1 2025.
“In Tanzania we await the official approval from the Ministry of Minerals having submitted our comprehensive Mining Licence application for Helium One’s southern Rukwa Helium Project, encompassing the Itumbula and Tai areas for commercial development. We look forward to updating our shareholders and stake holders in due course.”
Farm-out agreement with Blue Star
The Company previously entered into a binding Heads of Agreement (“Agreement”) by which the Company earns a 50% interest in the Galactica Project in exchange for paying US$1.5 million to Blue Star in consideration for past costs and funding the drilling of six (6) development wells (capped at US$450k per well). Blue Star, through its local operating entity, will continue to act as Operator of the Galactica Project.
The Agreement was subject to satisfaction or waiver of certain conditions precedent, with the key conditions being approval by the Colorado Energy and Carbon Management Commission (“ECMC”) of the Galactica-Pegasus oil and gas development plan (“OGDP”), and the execution of definitive governing agreements, including a farm-in agreement and a joint operating agreement, which have now been completed.
Blue Star received approval for the OGDP I on 17th October 2024, with the ECMC approving the new proposed helium development wells Jackson-27 SWSE, Jackson-31 SENW, Jackson-29 SWNW, Jackson-2 L4 and Jackson-4 L4. Following this approval, Blue Star has submitted the final drilling permit applications (“Form 2”) to drill these wells and is working closely with the ECMC to facilitate timely approvals.
Subject to Form 2 approval, drilling is expected to commence during Q4 2024.
Galactica- Pegasus development
The Galactica-Pegasus field was discovered by Blue Star in 2022 via the JXSN#1, #2, #3 and #4 wells. These wells showed gas bearing columns of up to 230 feet containing gas with between approximately 2% to 6% helium and initial recorded flow rates of between 125 thousand standard cubic feet per day (“Mcf/d”) and 412 Mcf/d.
In June 2024, Blue Star drilled the first development well at Galactica (Phase 1 of the greater Galactica-Pegasus development). The State-16 development well flowed 1.9% helium at 285 Mcf/d in addition to 70% CO2. Subsequent independent reservoir engineering including all available well data and review of the adjacent Red Rocks helium development established likely initial production flow rate estimates between 250 to 615 Mcf/d for future development wells.
The initial six well drilling programme funded by Helium One, together with State-16, are expected to form the initial gas gathering system into the Phase 1 helium production facility (location shown on the figure below).
First production from the Phase 1 of the Galactica-Pegasus development is expected in H1 2025.
In a separate announcement, the company reported that Russel Swarts has stepped down from his role as non-executive director, effective immediately.
Helium One Chair, James Smith, stated, “The board wishes to extend its gratitude to Russel for his substantial contributions as a board member and part of the senior management team, and we wish him success in all his future endeavors.”
