Avanti Energy has entered into binding agreements to acquire two additional sites, totalling 50,000 acres, in Montana for helium exploration.
Sharing the news on Monday, the Canadian company said the two sites are considered to be highly prospective for the potential discovery of helium.
It is believed that surrounding wells have helium up to 2% helium and 96% nitrogen in both the Devonian and Cambrian formations.
After a detailed evaluation process, the Avanti team moved immediately to acquire the new properties. Avanti’s geologic models suggest the properties contain several four-way closed structures with 70m to 170m of relief.
The agreements are conditional only to Avanti satisfactorily completing the due diligence on the land rights and ownership, which is already underway and targeted for completion in July 2021.
Commenting on the transaction, Chris Bakker, Avanti Energy CEO, said, “The acquisition of these properties is a tremendous advancement for Avanti and fits perfectly within our strategy of acquiring targeted land packages that are highly prospective for helium development.”
“We are expanding our helium portfolio to cover over 60,000 acres and we believe properties on both sides of the border have the potential to become company makers in the years ahead.”
“This particular land package has multiple closed structural highs and very promising local analogue well results. The detailed analysis and assessment completed by our world-class technical team indicates strong potential for economic development of helium.”
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.