Desert Mountain Energy (DME) yesterday commenced drilling of its first helium well in Arizona’s Holbrook Basin.

DME’s said its first well was spudded in Navajo County in the central portion of the Basin, and it is anticipated to be drilled to a total depth of approximately 2790ft.

The company’s technical team has identified five potential target zones for helium bearing gas at varying depths.

According to Irwin Olian, CEO of DME, “We are very excited to be moving forward at this time with our helium drill program in Arizona and are looking forward to success.”

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.