Blue Star Helium confirms richest helium hit yet in JSXN-4 well; seven new wells on horizon

Wed 05 Oct 22, 12:28pm (AEST)
A photograph taken on the Vail Pass in Colorado shows a grey road extending into brown scrublike terrain with trees collecting on both sides into the distance
Source: Unsplash

Key Points

  • Applications for a further seven development wells at Blue Star’s Las Animas project are now in-situ
  • Company reiterates strength of results downhole JSXN-4
  • Maiden contingent resource can now be put together with today’s downhole logging data

After spudding the well in late September, Blue Star Helium (ASX:BNL) has received the logs for its fourth ‘JXSN’ series well, unsurprisingly called JSXN-4. 

In late September, the company revealed JSXN-4 is the best well in the series yet, reporting helium concentrations up to 6%. Previous JSXN wells had generally returned concentrations around 3%. 

Previous results run as follows:

  • JSXN-1: helium gas concentration of 1.98%

  • JSXN-2: helium gas concentration of 3.14%

  • JSXN-3: N/A

One test result from the JSXN-4 well returned a helium concentration of 4.2%.

Data allows contingent resource to be formed

The importance of the downhole logging data announced today is that it allows Blue Star to move to its planned contingent resource publication attached to the prospect where the JSXN wells are being spud. 

The prospect has a dual name, so you’d be forgiven for getting lost: called Galactica/Pegasus, the target is part of the larger project acreage in Las Animas County, Colorado. 

The company now knows JSXN-4 sits over a geological formation called Lyons which starts at 753ft depth. 

A gas-bearing column starting at 753ft to 986ft was logged; allowing the company’s geotechs to interpret a gas bearing column at 750ft depth some 233ft thick. 

Seven development wells are now being proposed to the Colorado regulators by the company. In Colorado, you can only apply for state approvals after receiving a federal one first, so shareholders may need to wait. 

It is likely that approvals will come in before helium supply chains recover from the 2022 shortage, however. 

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.

Helium is also commonly used in MRI machines in hospitals. In fact, MRI machines need the gas. 

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.

A look at Blue Star's six month charts
A look at Blue Star's six 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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