Helium offtake agreement extended
This morning our 2021 Catalyst Hunter Pick of the Year Grand Gulf Energy (ASX: GGE) extended its offtake agreement for its helium project in Utah, USA.
The agreement builds on GGE’s existing deal with Paradox Resources so that all of the anticipated helium production from the Jesse-2 well, which GGE expects to drill this quarter, is now accounted for.
Context on the offtake partner Paradox Resources:
Paradox owns the advanced Lisbon Valley Helium Plant that’s located 20 miles north of GGE’s project, providing a low cost, quick path to monetisation for GGE’s Jesse-2 well.
Paradox’s plant is one of only eight helium liquefiers in the US and has ~7% of North America’s helium liquefaction capacity. This means the facility can produce 99.9995% purity helium used in the semiconductor, defence, and space industries.
Should GGE achieve a commercially viable flow rate from its Jesse-2 well, it will become the priority raw gas helium supplier to Paradox’s liquefaction plant and the high-purity helium market.
We are now looking forward to GGE contracting a drill rig and the first spudding of the Jesse-2 well, following up on the company’s discovery well (Jesse-1) from last year.
The ultimate aim for Jesse-2 will be to see the company produce a commercially viable flow rate that warrants putting GGE’s helium discovery into production.
Here is what we know about GGE’s helium project now:
- ✅ A proven helium structure: A >61m gross gas column (with ~31m of independently audited net pay)
- ✅ Commercial helium grades: Helium grades of up to 1% returned to surface (higher than our 0.4% expectation)
For GGE to deliver a commercial helium project it needs:
- 🔄 Commercially viable flow rate: GGE’s Jesse-2 well is being drilled with this goal in mind.
To see our deep dive on the Jesse-2 well, check out our most recent GGE note here: GGE helium drilling this quarter - can it unlock last year’s discovery?
