Blue Star drilling fourth ‘JXSN’ well after successful helium exploration run

Fri 23 Sep 22, 12:58pm (AEST)
An array of differently coloured helium balloons are let loose into the sky
Source: iStock

Key Points

  • Blue Star Helium has spud its fourth JSXN helium well, JSXN#4, after wells 1-3 hit helium up to 3.14%
  • A global helium shortage is disrupting world markets and upsetting weather balloon services
  • Move comes after company recently won approval to proceed; this is the sixth helium well spud this year

Shortly after winning approval for a separate four-wel development l campaign, Blue Star Helium (ASX:BNL) has begun spudding its fourth well in the existing ‘JXSN’ exploration campaign. 

So far, JXSN wells 1-3 have hit helium concentrations up to 3.14%. While helium can be synthesised in a lab, it’s cheaper to tap naturally occurring reserves where helium gas is trapped in rock in a similar fashion to natural gas. 

JXSN-4 is the sixth well Blue Star has spud onsite its acreage in Colorado, USA, this year. 

How is JXSN-4 coming along, according to Blue Star? 

At this time, the well is currently at 582ft depth and the company is hoping it can replicate its success in former JXSN wells, which saw a helium bearing gas column of up to 230ft logged. 

The fourth well is located some 2.5km to the northwest of JXSN#1 and is technically a step out well attempting to determine how far helium gas deposits extend away from the maiden asset. 

JXSN-4 will foreshadow another four wells on the company’s radar, part of the ‘State’ exploration series. 

Called State 09, 16, 35 and 36, the company last week won approval from the Colorado mining regulator to progress with all four wells. 

JSXN-4 is the sixth well the company has spud this year, after spudding its fifth back in early August

Shortage gives context to ASX helium players

Much of the world’s helium supply comes from mines in the US; large concentrations are also kept in Russia, but access to that supply has reduced due to sanctions following Russia’s invasion of Ukraine. 

Even before the invasion, a large plant in Russia that was set to supply world markets went under for maintenance.

Then the war began. In short: helium is in short supply right now, and that is part of the reason why a few pure play helium explorers have popped up on the ASX in recent history.

Blue Star competitors Grand Gulf Energy (ASX:GGE), located in Utah, are also seeking to produce helium for sale into the US markets as companies scramble to extract more of the gas from the ground. 

 Blue Star and Grand Gulf are joined on the bourse by Noble Helium (ASX:NHE) in Tanzania. 

What is the helium shortage impacting?

Helium is a crucial and often overlooked material in the manufacturing of many high-impact products—fibre optics cables and microchips among them.

As the microchip (semiconductor) sector continues to recover, it is likely helium demand will only increase. 

Then there's kids balloons. US company Dollar Tree, which sells helium balloons for parties among other products, earlier this year published a statement on its website apologising for the shortage of helium balloons to American consumers. 

And if that wasn't bad enough, there are more concerning implications for a global helium shortage: in April, the US National Weather Service noted it wasn't able to release as many weather balloons.

That situation has only deteriorated since early 2022: last week, the US state of Denver stopped launching weather balloons altogether

Blue Star Helium's three month charts
Blue Star Helium's three month charts


Written By

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication.

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