Big Star Energy announced recently that they have leased 1,640 acres of helium “prospective” land in Las Animas County. The company said the lease increases its total acreage holding to 92,443 gross, or 39,811 net acres.
“We are rapidly extending and consolidating our leasing coverage of the Enterprise prospect where we are targeting our exploration efforts on the Lyons Sandstone which is pervasive in the region and has previously produced helium in Las Animas County,” Managing Director Joanne Kendrick said.
Big Star Energy said a large percentage of its total acreage position is now located in Las Animas County.
Said the company, via release, “(Las Animas County) has a history of helium production dating back to the 1920s when the Model Dome helium field was produced for a short period. This field, at 8 percent, is one of the top-4 highest helium concentrations to have been produced in the USA. It was subsequently acquired by the U.S. Government and held as part of its strategic helium reserve.”
Big Star Energy believes helium production will be a profitable investment.
“Helium is in short supply despite being a critical component in modern technology applications, such as for magnetic resonance imaging machines and in nuclear medicine,” said the company. “This has resulted in helium prices rising over the past decade to over 100 times the price of natural gas in the U.S. And with the (National Helium Reserve) set to shut down completely by 2021, new sources of helium will have little difficulty finding eager buyers.”
Big Star Energy is referencing the fact that in 1996, Congress required the Bureau of Land Management to sell off its helium stores at a fixed rate and then abruptly close in 2013. But instead of closing the reserve, Congress smoothed out its descent in 2013, giving it until September 30, 2021, to sell its helium stores in a series of auctions.
The company previously announced acquisitions of helium leases in Colorado through auctions that totaled 59,510 and 27,104 gross acres.
The total lease holdings in Colorado and Las Animas County give the company what it describes as an “industry-significant lease position in a highly prospective helium area.”
According to one report, soil surveys in Las Animas County have returned “positive helium anomalies ranging between 10 percent and 50 percent above normal atmospheric levels, which is consistent with soil gas results over third-party producing helium projects in the U.S.”
“We think we are a relatively early mover into this commodity, which is explored for, developed and produced in almost exactly the same way as oil and gas,” Kendrick told financial publication Stockhead.
Big Star Energy is expected to begin the permitting process this next year prior to well development.