Quantum Helium (QHE ) is making good progress with its’ extended production test the Sagebrush-1 well, Colorado.
The perforation of the Lower Leadville formation is scheduled for next week, targeting the primary helium-bearing interval.
In the meantime, key well preparation milestones are progressing, including cementing, casing integrity testing and drill-out operations.
The testing programme is designed to test flow rates and confirm historical helium concentrations of 2.76%.
The news follows the recent approval of key agreements with the local Ute Mountain Ute Tribe.
The current testing programme is focused on advancing Sagebrush from a resource-stage asset towards reserves, development and, ultimately, commercial production.
Further growth potential also exists across multiple drill-ready prospects at Coyote Wash.
This strategy is supported, in part, by Quantum's existing oil production at Sagebrush, which has continued to generate revenue and contribute towards funding helium-focused operations.
"We are very pleased with the progress being made at Sagebrush-1, with operations advancing smoothly through the initial phases of the extended production test program,” said Quantum’s chief executive Howard McLaughlin.
“What sets Quantum apart from many of our peers is that we are not searching for helium - we already have a significant, independently assessed helium resource base. Our focus now is on confirming the historical helium concentration of 2.76% recorded at Sagebrush-1, and moving the resource into reserves, through appraisal and ultimately commercial development. The upcoming perforation of the Lower Leadville Formation is a major milestone for the company and marks the transition into the key testing phase. This is the interval we believe holds the greatest potential, and we are excited to now be entering this stage of operations.”
View from Vox
The company holds over a billion cubic feet of 2U prospective recoverable helium resources across Sagebrush and Coyote Wash, representing one of the largest independently assessed helium portfolios among London-listed companies. At the current moment, with helium supplies out of Qatar constrained by conflict in the Middle East, that’s quite a claim to be able to make. Not surprising then that the share have been ticking up in recent weeks. If this round of testing goes well, they could go a lot higher.