Blue Star Helium

Blue Star Helium's Enterprise and Galileo prospects in Las Animas County.

The Australian company Blue Star Helium (formerly Big Star Energy) recently announced it had successfully raised $2.3 million via share placement, which will be used for the company’s drilling program centered around helium resources in Las Animas County and for general working capital purposes.

“The company is now in a very strong position to pursue its 2020 plans including advancing its portfolio of prospects and leads and a high impact drilling program targeting its prospective helium resources in Las Animas County, Colorado,” said Blue Star Managing Director Joanne Kendrick.

The company’s initial focus area is the Lyons Formation Helium Play and the Enterprise and Galileo prospects in Las Animas County.

The initial focus areas are in areas with historic nearby helium production and well tests confirming helium in multiple stacked reservoirs.

A significant leasing program is also underway over high-graded prospects.

Helium, traditionally a by-product of natural gas production, is used in a variety of critical modern technology applications but global supplies are dwindling.

This has sparked a growing trend towards exploration and production focused primarily on helium content, rather than hydrocarbons.

Blue Star Helium recently presented an independent prospective resource estimate of 3 billion cubic feet (Bcf) of helium for its first two prospects in Colorado and Las Animas County.

The figure, generated by oil and gas consultant Sproule, was derived using the probabilistic method, and is based on a 50 per cent likelihood contained resources will equal or exceed the estimate.

While the typical natural gas investor will scoff at a 3 billion cubic feet resource, the number is incredibly deceptive given that the helium is a great deal more rare than natural gas.

It commands an eye-popping $280 per thousand cubic feet, the last published price from the Bureau of Land Management auction.

At this price, which has historically served as a “defacto” crude price for plant-gate helium sales, Blue Star’s resource would be worth $840 million.

The Enterprise and Galileo prospects in Las Animas County are considered low risk because the Model Dome helium field has already produced gas with grades up to eight percent helium before it was acquired by the federal government for its strategic reserve.

According to the company, recent bids in auctions for Las Animas County land have increased tenfold, highlighting the growing interest in the region.

Once all relevant permits are approved, Blue Star currently plans to drill one well at the Enterprise prospect as soon as possible and is currently preparing to stake out the well location. They estimate that drilling the well will cost $300,000.

Should the first well discover helium, Big Star intends to conduct a log evaluation and well testing program. This could be completed as a producer if commercial rates of helium are indicated during testing, which would add about $100,000 to the well cost.

The company said further exploration at the two prospects would be reliant on the results from the first well.

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