Sep 13, 20212 min
Desert Mountain Energy Corp announced that it had finished testing of well #4 with positive results in discovering another new helium field in Arizona. Results after gas chromograph analysis confirmed the presence of commercial quantities of helium. The Company's geologic team has gained insight into water free production from naturally fractured formations which may result in lowering the long-term production costs in excess of 43%.
The "expected” case reserve estimate suggests 1.9 BCF of gross recoverable gas in place from the two of the tested zones in well #4. Helium is estimated to be about 1.137% of the gross recoverable gas in place. The Company's geologic team has identified 5 to 6 developmental wells at this location and anticipate drilling three more wells between now and the time the processing facility will be brought on-line in 2022.
Pricing on both crude and processed grades of helium vary with market conditions. At this time, crude helium is $269/mcf and processed helium ranges from $580 to $2,350/mcf dependent upon grade and delivery. "While the percentage of helium at 1.137% in the deepest zone was not as great as we had previously discovered, the makeup of the gas containing over 94% nitrogen, combined with a lack of other gases significantly reduces the size and complexity of the processing plant. With regards to final engineering and procurement of the processing plant, this will help to regain some of the time lost with the issues encountered during drilling operations of this well. Additionally, the reduction in procurement of additional processing equipment will reduce the cost of the first plant," said Desert Mountain Energy Corp. CEO, Robert Rohlfing. The Company's relatively clean helium will be more cost effective to deliver to end user's.