Royal Helium has said that its drilling, exploration and development work programme in South Saskatchewan with Climax-4 is expected to spud in mid-July.
The news follows a recently completed financing and successful initial drilling programme.
With the new drilling programme, the company will accelerate the growth of its helium resources, having currently budgeted for seven new wells in Saskatchewan.
Commenting on the programme, Andrew Davidson, President and CEO of Royal Helium, said, “With the exceptional investor interest in the oversubscribed bought deal prospectus offering, Royal is in a position to execute on a large drilling and exploration program to expand on the success of its first three helium wells.”
“Our programme is specifically planned to accelerate the growth of the company with the goal of quickly becoming a helium producer.”
“Royal is at an exciting juncture in its development - looking toward helium production from its first 3 wells, developing the new discovery of 2.5 to 6 billion cubic feet of helium in-place and accelerating growth with seven new wells including an additional well specifically targeting the Regolith discovery zone”.
At Climax, Royal will be drilling Climax-4 specifically targeting the Regolith zone discovered in the Climax-2 and Climax-3 wells. Climax-4 drill and production permitting is underway, and the well is anticipated to spud by mid-July. The well will be cored through the Regolith discovery zone to identify the optimal way to produce helium from this large reservoir.
In Southeast Saskatchewan, Royal intends to drill its first set of wells at its Bengough, Griffin and Ogema blocks. Planning is currently underway for this portion of the drill programme consisting of the acquisition/re-processing of seismic data, completion of a tri-axial magnetic survey and detailed well target definition.
Alongside drilling new wells, testing will continue at Climax-2 and Climax-3 focused on the Wymark zone that reported elevated levels of helium that have not yet been perforated or production tested. This testing program, fully planned and costed within the previous programme, is anticipated to last for approximately 10 days per well.
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.