GGE locks in drilling contractor
Our helium Investment, Grand Gulf Energy (ASX: GGE) secured its drilling contractor today.
This drill contract was an important piece of the puzzle and means that GGE remains on track to spud its Jesse 2 helium prospect this quarter.
The drilling contractor is Aztec Well Servicing, Co which was the preferred choice of newly appointed Drilling Manager, Todd Gentles - and it is the same drilling contractors that ran the Jesse-1 drill program which delivered GGE a helium discovery.
Today’s announcement notes that, “Mr Gentles has previously worked with Aztec, including this exact rig and crew with underbalance drilling and testing procedures, whilst drilling wells at the neighbouring Doe Canyon field”.
We think the reasoning for the Aztec contractor selection is quite simple - if it ain’t broke don’t fix it.
Aztec and Mr. Gentles have a long history of success, most notably at the neighbouring Doe Canyon Helium field, which is the second largest producing North American helium discovery in over 60 years.
As we get closer to the spud date for GGE, our anticipation is building.
If successful, we think GGE can be a near term producer of helium given the proximity of GGE to pipelines.
More specifically, GGE’s helium project sits immediately adjacent to idle pipeline infrastructure that runs directly to a nearby helium processing plant.
This processing plant is owned by GGE’s offtake partner Paradox Resources - so GGE already has a local customer lined up.
In the last pass at Jesse 1A, GGE grazed the gas/water contact zone in the image below - which hampered the company’s ability to deliver a reliable flow rate:
If GGE can avoid the gas/water contact zone AND produce a reliable flow rate - then we would expect a significant re-rate.
That being said, there are no guarantees that GGE can successfully produce a flow rate.
For that reason the risk below is our primary risk going into the GGE drilling event:
What’s next for GGE?
We’re looking for GGE to firm up the spud date.
With drilling expected to commence this quarter we are hoping this newsflow is only weeks away.
