Blue Star Helium gets green light for four development wells

Within a hearing overnight in Denver, Colorado, helium pure play, Blue Star Helium (ASX:BNL) finally received long-awaited approval from the Colorado Oil and Gas Conservation Commission (COGCC) for two Oil and Gas Development Plans (OGDP) relating to four Galactica/Pegasus helium development well locations.

Following approvals for “State 9 & 16 3054” relating to two well locations and “State 35 & 36 OGDP” also in respect of two well locations, Blue Star will submit final permits to drill (Form 2) for the four development wells after receipt of the COGCC’s written orders, which are expected shortly.

Drilling pending

Approval for the final permit to drill is expected 30 to 40 days after Form 2 submission.

Drilling of these wells will be scheduled as part of the plan of development for the Galactica/Pegasus area, and management notes drilling of an early development well for additional pressure and flow analysis is also likely.

A further three wells are being targeted for completion closer to the commissioning of the planned processing facility.

These four wells (State 09, 16, 35 and 36), plus the additional seven development wells at Galactica/Pegasus currently under COGCC review - all of which offset the JXSN#1 and JXSN#2 discovery exploration wells - are shown on the map below.

Source: Blue Star Helium

Development status

The table below outlines the current status of Blue Star’s helium development well permitting activities in Las Animas County, inclusive of the approvals granted overnight at Galactica/Pegasus.

Source: Blue Star Helium

What is Blue Star Helium?

To the uninitiated Bluestar Helium is an independent helium exploration and production company, headquartered in Australia, with operations and exploration in North America.

It’s understood the Galactica/Pegasus development wells are located to offset the helium discoveries at JXSN#1 and JXSN#2, which returned concentrations of up to 3.14% helium.

The JXSN have also confirmed the company’s gas on log interpretations at the historical Denton B #1 and Colorado #B-1 wells, extending and proving gas over a large structural area predominantly leased by the company.

As at 31 August 2022, Blue Star has an interest in 18 helium wells that are permitted or under permitting.

Preliminary work and permit preparation was underway for an additional 38 potential drill locations across the portfolio as part of the company’s rolling permitting strategy.

Consensus does not cover Blue Star Helium.

Based on Morningstar’s fair value of $0.06 the stock appears to be undervalued.

Blue Star Helium's share price was up 3.45% heading into lunch today.