CALGARY – Global Helium Corp. (CSE: HECO) (OTC: HECOF), one of North America’s largest helium exploration and development companies, announced that on January 6, 2023 the Company entered into an agreement with one of Canada’s largest mineral landowners to establish a significant land position in a proven helium producing region of Southeast Alberta along the Manyberries Helium trend.
The Agreement provides the Company with an option to lease up to 32 sections (20,480 acres) of contiguous land on a known helium trend, immediately offsetting – and surrounding – a proven helium well. Public data shows the offsetting well was tested for helium in 2018 and showed a concentration of 1.2% (a helium content of 0.3% or more is considered necessary for commercial helium extraction).
The Company has already identified a drilling location and the permitting process for Global’s initial test well is under way. The Company expects to commence drilling sometime in late Q2 or early Q3, 2023, due to the high activity level and rig availability in the area.
Jesse Griffith, President of Global Helium stated, “We are very excited to expand our land base into this well-known helium producing region of Southeastern Alberta. Technically, we are in an excellent, proven helium trend and our team has identified this very specific area of that trend as being clearly high potential. The team is very eager to expand our position in this area and, importantly, to executing on our corporate objective of drilling and testing helium prospects in early 2023.”
Analysis of public data (AER Public Data) shows the Manyberries helium trend is one of North America’s most prolific helium producing regions, with multiple high-rate producing wells containing helium concentrations over 1.5%. Thor Resources Inc., a private helium exploration and production company, has produced 52,890 mcf of helium from two wells brought on production in late 2020 and has recently drilled, cased, and begun testing an additional helium well in the region. Avanti Helium Inc. also licensed a new well in the area in October 2022.
A recent BNN Bloomberg article notes that current spot prices for helium are greater than US$1,000 per mcf and the growing helium market is expected to remain undersupplied for the foreseeable future.
The Manyberries helium trend is a mature natural gas field, which allows Global Helium to leverage existing wellbores and infrastructure, which management further expects to reduce risk, capital costs, field wait times and ultimately increase returns.
According to the Agreement, the Company will have the option to drill one helium test well in 2023 to earn a lease on the spacing unit of the test well and will have the option to enter new helium leases on 20,480 acres of land offsetting the test, subject to a 7% lessor royalty and $50/acre bonus consideration. There are no royalties payable to the Crown.