GGE secures drill permits for US helium project

Published 06-AUG-2024 12:14 P.M.

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Today, our US helium Investment Grand Gulf Energy (ASX: GGE) secured a major permit for its project in Utah, paving the way for the next phase of drilling to test deeper helium targets.

GGE received all approvals to drill the Jesse-3 well at its Jesse discovery.

For some context - at the Jesse discovery GGE already has:

✅ A confirmed helium discovery from its Jesse 1A well - GGE’s first well hit a 61m gross gas column (net pay of ~31m), returned 1% helium to surface, which came from a productive and strongly pressurised reservoir.
✅ Extensions to its discovery - Jesse-2 was drilled ~1.5 miles away from Jesse-1A, extending GGE’s helium discovery.
✅ Helium grades up to 0.9% - This is a grade that is considered commercial AND above our 0.4% base case expectations. The result was also consistent with Jesse-1A which delivered ~1% helium grades.
✅ Existing flow rates - GGE today has previously flowed gas from its Jesse discovery with peak flow rates of ~0.95mmcfd over the 60-hour flow test.

With Jesse-3 GGE would be looking to drill a well that it thinks has the highest chance of producing higher flow rates.

Here is where GGE is proposing Jesse-3 would be drilled:

GGE also working on a farm-out deal?

We also noticed in today’s announcement that GGE is “engaged in discussions in relation to the potential farm-out” for its project.

We think that in the short term this is the major catalyst for GGE as it would unlock a drill program for the company.

(Source)

How today’s news relates to our GGE Investment Memo

Securing the Jesse-3 permit is a key milestone for GGE as it moves towards commercialising its helium discovery at Red Helium.

The Jesse-1A and Jesse-2 wells confirmed helium flow rates up to 1 million cubic feet per day with grades up to 1%.

The updated Jesse-3 designs aim to tap deeper helium potential below the reservoirs the company has tested to date.

A successful well at Jesse-3 would reduce risks for the helium project and bring GGE closer to production, benefiting from nearby processing infrastructure and an offtake partner.

Surrounded by processing infrastructure

GGE’s helium project sits adjacent to an existing idle pipeline infrastructure that supports a quick pathway to production. The pipeline infrastructure runs directly from GGE’s ground to Paradox Resources’ Lisbon Helium Plant

Source: “Why we Invested” - GGE Investment Memo 30 November 2022