Following M3 Helium’s successful $170,000 project financing, Voyager Life has announced a second, significantly larger fracking operation at the Nilson well.
The operation aims to improve gas production further. The unexpected increase in gas output and reduction in water content instil confidence in moving forward. Local investors and subcontractors show faith in the project, reflecting belief in its potential and local interest.
Highlights
· Nilson production, containing approximately 0.6% helium, has been rising with associated water volumes decreasing
· This evidences that gelled water fracks can be successfully performed in the mature Hugoton field
· Fully funded programme to carry out more substantial frack to stimulate greater production
· Local investors and one of the contractors have committed US$170,000 to cover costs of frack for a 25% economic interest in the well
Project overview
The Nilson well was originally fracture stimulated (fracked) with gelled water and sand to test a tight reservoir along the eastern edge of the Hugoton field which M3 Helium’s management considered to be shale-like. The well was stimulated with a single stage, relatively small frack; the total amount of gelled water used in the fracture was only 37,500 gallons, and the sand volume was only 30,000 pounds. By comparison, stimulated shale wells in the US are typically 5-10 times those volumes, per stage, with many stages across a horizontally drilled lateral.
As M3 Helium’s management hoped for, the Nilson well exhibited shale-like response behavior following the first frack including a sharp increase in gas production, followed by a corresponding sharp decline over the following days. However, unlike shale, the Nilson well has subsequently increased in production, steadily over time, while associated water volumes have steadily decreased. As of 22 September 2024, the Nilson well was producing 34,000 cubic feet per day (34 Mcfd) containing approximately 0.6% helium, along with approximately 22 barrels of water.
This highly encouraging behavior from the well, coupled with proof that gelled water fracks can be successfully performed in this field, has supported a follow up proposal of a more substantial fracture stimulation to further enhance the well’s production, scheduled to commence shortly. The planned fracture stimulation is for at least 170,000 gallons of gelled water along with 150,000 pounds of sand, being approximately 5 times the initial pilot stimulation. As far as M3 Helium’s management are aware, this will be the Hugoton field’s first large water-based frack stimulation in several decades. If successful, it could open up a significantly enhanced operation for M3 Helium.
Overview of M3 Helium and the Hugoton North Play
Voyager announced on 27 June 2024 that it has entered into an option agreement to acquire the entire issued share capital of M3 Helium through the issue of 57,611,552 new ordinary shares in Voyager to M3 Helium’s shareholders. The exercise of the option will constitute a reverse takeover pursuant to AQSE Rule 3.6 of the Access Rule Book and is subject to, inter alia, publication of an admission document.
M3 Helium has interests in six wells in South-Western Kansas of which three (Peyton, Smith and Nilson) are in production. Five of the company’s wells are within the Hugoton gas field, one of the largest natural gas fields in North America. Significantly these wells are in the proximity of a gathering network and the Jayhawk gas processing plant meaning that producing wells can quickly be tied into the infrastructure.
The sixth well is in Fort Dodge and was tested in July 2024 as containing 5.1% helium composition. Although not within direct access to the gathering network, M3 Helium owns a mobile Pressure Swing Adsorption production plant which could be used to purify the helium on site.
