Helium exploration and production firm Royal Helium will collaborate with Sparrow Hawk Developments (Sparrow Hawk) after earmarking $25m for the Val Marie helium project located in Saskatchewan, Canada.
Comprising a participation agreement and Letter of Intent, the agreement outlines plans for joint efforts on a drilling initiative and the establishment of a helium purification plant.
According to the LOI terms, Sparrow Hawk will have an approximate 57.5% non-operating working interest in the wells and an approximate 46% non-operating interest in the processing facility.
“This joint venture represents an exciting next step in Royal’s mission to advance the development of its extensive helium resources and bring additional facilities online each year,” said Andrew Davidson, CEO of Royal Helium.
He explained that the partnership highlights the company’s commitment toward further inclusion of First Nations groups in the resource development activities and the economic growth in the province.
“The historical partnership with Sparrow Hawk to advance the economic development in the Treaty 4 Territory is an important first step toward these objectives.”
The partnership will also see the participants working together to advance economic reconciliation in Treaty 4 territory, commit to partnering on future helium opportunities, and engage in First Nation’s training and education activities.
Commenting on the JV, Alex Fallon, CEO of Sparrow Hawk, said, “This partnership and our planned ownership in helium production plants and of the helium resource itself, is not only a form of economic reconciliation, but it also sets the path for a multimillion-dollar investment to develop Saskatchewan’s helium sector and export helium to customers around the globe.”
The Val Marie helium project covers 32,000 acres, representing around 3% of Royal’s helium permits in Saskatchewan and Alberta. Situated north of the Saskatchewan-Montana border on the Bowdoin Dome, an active gas production zone, recent successful helium wells have been drilled on the Montana side.
Royal’s first well at Val Marie in August 2022 yielded promising helium readings from multiple formations, including Duperow, Souris River, and Deadwood.
