Helix Exploration, the helium exploration and development company with sites in Montana in the US, is to start drilling at Linda #1 production well in April and targeting first production at its Rudyard site this summer.
CEO Bo Sears said acquiring the production-ready well had saved the company over $1m.
“Our approach is simple: build scale efficiently, develop resources strategically, and deliver near-term cash flow,” he said. “Rudyard is proving to be a high-quality helium asset and, with each step forward, we are strengthening our position in what we believe is one of the most promising new helium districts in North America.”
The company said it has signed a drilling contract with Treasure State Drilling for the Linda #1 well, in order to spud next month.
The well location has already been surveyed, a bond posted, and all necessary preparations for drilling are complete, pending final approval from the Montana Board of Oil and Gas.
Linda #1 will be drilled in what Helix designates as section 34, approximately one mile south of the Darwin #1 well, which is awaiting the construction of Helix’s helium processing plant.
It is designed as Helix’s second production well, targeting the same Red River and Souris formations that flowed helium from Darwin #1.
The well, which will cost around $1.3m to drill and complete, is expected to generate around $4m per year in pre-tax cash flow and is part of Helix’s phased development strategy to bring multiple wells into production at Rudyard, underpinning its long-term cash flow potential.
Helix has now completed acidisation of the Charles Formation at Clink #1, recovering a gas sample that has been submitted for laboratory analysis.
While initial flow rates from the Charles formation were below commercial thresholds, the over-pressured nature of the reservoir indicates “a dynamic and charged system which may respond to mechanical stimulation in subsequent drilling,” according to a statement. The company will assess the results of gas analysis before determining next steps.
Operations at Clink #1 will now be temporarily suspended ahead of Sage Grouse stipulations, which come into effect on 15 March.
Over the grouse season the company will undertake some other evaluations on its property, but the primary focus remains on completing the development of Rudyard with a defined path to commercial helium production.
Helix Exploration conditionally raised £5m in a shares placement on the London Stock Exchange (LSE) in January.
Read more on helium in Riskwatch, gasworld’s new quarterly insights which launched this week.
