May 30, 20233 min
Desert Mountain Energy (DME) currently holds ~C$19.7mm in cash, thereby remaining in a strong financial position. Recent well swabbing activities at the McCauley Helium Processing Facility indicate the absence of formation water. The company has acquired heavy trucks and trailers to transport raw crude gases from multiple wells to the processing facility. Additionally, DME plans to drill two wildcat wells targeting helium commencing around early July, as its hydrogen drilling partner experiences financing delays The Company has ordered long lead time components for two processing facilities; the next is planned to have liquefication capabilities.
Press Release:
Desert Mountain Energy Corp. wishes to apprise shareholders that it has continued to complete planned work as previously outlined, per the use of proceeds from the last financing. "The Company is in an excellent financial position," said Robert Rohlfing, CEO of DME. "There is approximately $19.7 CDN million cash on hand with significant percentages tied up in various guaranteed interest-bearing accounts."
The wells feeding the McCauley Helium Processing Facility were swabbed down with no formation water being detected. The water removed showed signs that it was from drilling and completion operations and not from the targeted formations. A full-size, helium gas tube trailer is on-site for production rather than the smaller tanks for run-up testing.
As previously outlined in the use of proceeds, the Company has acquired additional heavy trucks and additional trailers. Trailers to haul the Company's produced raw crude gases are being modified to haul crude gas from our other wells to the McCauley Helium Processing Facility. The Company expects to take delivery of a workover rig, capable of swabbing and light workover functions, by the end of June 2023. These specific vehicles were selected to help optimize and reduce the wait time to accomplish specific tasks. Our trucking company continues to improve usage performance. The signing of a long-term agreement to haul heavy gas field compression units for a major company in the four corners region and Colorado is significant.
Our hydrogen drilling partner was encountering market conditions slowing their financing down. The Company had already planned for a possible contingency and will be drilling two wildcat wells, specifically targeting helium, starting towards the end of June 2023 to the middle of July 2023. One well will be drilled on the south Winslow Prospect and the other well will be on the O'Haco leases. Both wells are located within approximately ten miles of the McCauley Helium Processing Facility. Depending on the outcome of those drilling efforts, initial production will be trucked to the McCauley Helium Processing Facility. DME anticipates drilling the shallow hydrogen/helium wells towards the end of August 2023.
The Company has continued to go forth with multiple archeological studies required for drilling and production on our state leases. This extensive work and separate permitting are required, prior to requesting actual drilling permits, from the State of Arizona Oil & Gas Conservation Commission. We are also engaged in geophysical studies across NE Arizona and other states. Those activities are in conjunction with private oil & gas companies currently drilling. The Company is not engaged or in partnership with those companies in drilling wells for hydrocarbon production. The Company expends very small monies to have independent geologists with mass spectrometers on location during drilling operations. Thus far our efforts have found the presence of helium in areas previously untested for both helium and hydrogen. Looking at the entire spectrum of elements is an established practice by the Company and provides our geological team with the maximum data by which to make decisions.
The Company has identified and ordered the longest lead time components for two processing facilities. The next processing facility is planned to have liquefication capabilities in order to process the noble gases in addition to being able to sell liquified helium to meet specific customers needs.