Blue Star Helium has a prospective helium resource of three billion cubic feet (Bcf) for its two prospects in Colorado, US, the Australian exploration company said today.

Global energy consulting firm Sproule calculated the resource estimate for Blue Star’s Enterprise and Galileo prospects as part of an independent prospective helium resource evaluation.

The prospects are situated in the Lyons Formation Helium Play, which is proven in the area by the historical Model Dome field.

Blue Star will drill one well at its Enterprise prospect as soon as it receives approval of the relevant permits, which the company expects to be later this year.

To prepare for the prospect of drilling, Blue Star is currently preparing to stake the well location which will be followed by the drilling permit application and associated surface use agreements. Engineering estimates have confirmed the expected dry hole costs will be $300,000.

Should the first well discover helium, Blue Star intends to conduct a log evaluation and well testing programme.

If commercial production rates of helium are indicated during the well testing, the well may be completed as a producer. In this event, Blue Star said completion costs have been estimated at $100,000, which is additional to the dry hole cost.

Blue Star Managing Director Joanne Kendrick said, “This is an outstanding result at our first two prospects in our portfolio. It gives us great confidence as we prepare for our initial drilling campaign later this year.”

Proven vs Prospective reserves

There are many different terms and phrases to get accustomed to in the helium business, but few as significant as ‘proven’ and ‘prospective’ reserves when it comes to the future potential and validity of a helium project.

Statements often abound about the prospective reserves of a new helium discovery, while others will cite the proven reserves. So, what do they mean and what’s the difference?

Prospective Resource estimates are developed based on a set of assumptions provided to a geological consultant, assumptions which can be highly optimistic.

These figures can generate great scope for future capacities, but such estimates of prospective resources can and often are obtained before any drilling activity has even occurred at the site in question.

Proved Reserves, however, are considered almost definite. These are, as the name implies, proven and more precise than estimates alone. In fact, most investment decisions are based on something called ‘2P Reserves’ – which means Proved + Probable.

It is these proven reserves that are, therefore, often considered to be the realistic hallmark of a successful helium exploration project.