Big Star Energy (ASX: BNL) has confirmed an active helium system at its newly acquired Enterprise oil and gas lease in the US Mountain States region, with the prospect appearing larger than first thought.
The company secured its first 1,800-acre lease over the Enterprise prospect last month and is aiming to expand its footprint up to 5,000 gross acres in the area, which is known to be a helium-producing province.
At the end of August, a helium soil gas survey was completed on 30 prospects and leads within the project area.
Interim results revealed last week confirmed the presence of an active helium system including significant anomalies with concentrations around 50% greater than atmospheric levels.
Big Star today provided an update on the survey results, announcing 167 of the 188 collected samples measured between 10-100% above normal atmospheric concentrations of helium.
The Enterprise prospect has now been confirmed by eight helium anomalies and the size of the prospect has been expanded by integration with gravity and magnetics data, the company reported.
Big Star managing director Joanne Kendrick described the survey results as “excellent news”.
“It confirms the presence of helium at our Enterprise prospect and our preliminary view is that this prospect is larger than originally mapped,” she said.
“A number of other prospects and leads in our portfolio were also sampled and the presence of helium was confirmed at each of them.
“Encouragingly, the anomalies associated with our prospects are similar to those seen over other produced accumulations in the Four Corners area, where the same soil gas survey technique was applied,” Ms Kendrick added.
Big Star is currently integrating the helium soil gas survey data into the geologic model to further define Enterprise’s prospects and leads.
This data will be used to support the company’s ongoing leasing program, which Ms Kendrick said will likely target this extended area.
The helium “boom”
In a corporate presentation last month, Big Star described helium as “the boom nobody noticed”.
Generated by the radioactive decay of uranium and thorium, helium is considered a finite irreplaceable resource and is about 100 times the price of natural gas, it reported.
According to Big Star, the world is currently in its third helium supply shortage in the last 10 years and US Bureau of Land Management auction prices have increased five-fold since 2007.
Yet, demand is continuing to grow despite the higher commodity prices.
In addition, the majority of wholesale helium is sold under long-term contracts with industrial gas companies and contracts are usually on take-or-pay terms with open escalation pricing.