North American Helium’s Chairman and CEO, Nicholas Snyder, re-congratulated the team on the completion and successful start-up of the company’s Battle Creek helium plant, but said more discoveries are needed and “this is just the beginning,” in a recent company update.
The Calgary, Alberta-based company this week (7th June) provided a corporate and operational update on recent substantial achievements by the company, in which Snyder reaffirmed the company’s commitment for helium exploration and discovery.
“I’d like to congratulate our team on the completion and successful start-up of the Battle Creek helium plant. Bringing a facility like this online ahead of schedule and under budget despite numerous challenges from the global pandemic is a significant achievement. Like our first plant at Cypress, the offtake from the Battle Creek facility has been pre-sold on long-term contracts, with a Tier 1 global industrial gas company as the anchor customer,” Snyder said.
Read more: North American Helium starts-up second plant
The comapny’s Battle Creek helium purification facility, belived to bethe largest of its kind in Canada, is located near Consul, Saskatchewan and is is the company’s second purification facility. The plant was completed three months ahead of schedule and under budget despite an ongoing global pandemic. Combined with the company’s first facility, total helium productive capacity is now approximately 60 million cubic feet per year (MMcf/y).
A “critical” company milestone has been achieved with the commencement of helium sales from Battle Creek. Sustainable cash flow from operations is now at a level that is anticipated to allow North American Helium to self-fund exploration and development drilling programs going forward.
Engineering and design for the next plant at Cypress West is well under way and we expect production from this discovery to come online in 2022.
“The security and sustainability of supply chains for critical inputs like helium are now in the forefront for many stakeholders, especially semiconductor manufacturers who represent the fastest growing segment of global helium demand. With production of helium from legacy hydrocarbon projects in decline and major initiatives underway to grow domestic semiconductor manufacturing, North America is unfortunately now on a path to become a net importer of helium in the coming years,” Snyder continued.
“With global helium supply shifting to less geopolitically secure regions, it has never been more important to responsibly develop new sustainable sources of helium supply in the US and Canada that are capable of reliable long-term production like our Battle Creek facility.”
“New sources of helium production must start with a discovery. As a result of three major global helium shortages over the past 15 years, a number of smaller helium fields discovered by oil and gas explorers in the 1950s and 1960s have been produced, but these fields are now depleted.”
”New discoveries are needed, and our company is proud to be the leading explorer, leveraging seismic data from past oil and gas exploration efforts to economically explore for, discover, and develop new helium sources from deep fields of nitrogen gas, which have a much smaller emissions footprint than previous helium production as a hydrocarbon byproduct. We’ve come a long way in a short period of time, but I’m excited to say this is only just the beginning.”
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.