Voyager Helium Development Update

Blue Star Helium Limited (ASX:BNL, OTCQB:BSNLF) (Blue Star or the Company) provides an update on progress on its maiden Voyager helium development in Las Animas County, Colorado.

Highlights

• Final approval to drill the first two helium development wells (BBB 33#1 and 34#1) at the high-grade Voyager helium development expected this month.
• These two wells offset the BBB#1 helium discovery and are planned to be production wells.
• Drilling of the first well is expected to commence in late Q2 or Q3 and is set to include flow and pressure testing.
• Newly acquired strategic crestal mineral leases and surface access agreements expected to increase Voyager contingent resources and enable optimised siting of helium processing facility.
• Commercial discussions for provision of leased helium facility at Voyager highly advanced and expected to conclude in execution of a facilities agreement in coming weeks.
• Additional five-well OGDP for Voyager to be submitted to COGCC; together with the BBB 33#1 and 34#1 locations, delivers robust inventory from which the initial 3-4 production well locations at Voyager will be selected.
• Blue Star targeting first helium production and sales from Voyager during H2 CY2023.

“We are very pleased to have now secured the majority of the Voyager helium resource area with these new crestal leases. While infill leasing will continue in the background, these leases are expected to significantly add to our net contingent resource and have allowed inclusion of highly regarded well locations in the upcoming OGDP submission. It will also allow for additional crestal locations to be added to the inventory going forward. The new surface access allows for optimal placing of the helium facility and a more efficient gathering gas system.

“While in Denver recently we met with the mid-stream company that will provide and operate the initial facility at Voyager with discussions now highly advanced and final document signing expected in the coming weeks.”

Voyager helium development wells

The Colorado Oil and Gas Conservation Commission (COGCC) has advised that it expects to issue the final Form 2 approvals for the BBB 33#1 and 34#1 helium wells this month. These wells relate to the “BBB 2860” Oil and Gas Development Plan (OGDP) located within the Company’s high-grade Voyager helium development.

These two wells offset the BBB#1 helium discovery and are intended to produce into the initial Voyager facility (see BNL announcement dated 19 December 2022). Drilling of the first of these wells is expected to commence in late Q2 or Q3 and is planned to include subsequent flow and pressure testing evaluation.

Following the acquisition of strategic mineral leases and surface access agreements, the next planned OGDP submission at Voyager has been expanded to five wells and is set to be submitted within the next four weeks after expiry of mandatory pre-submission notices to the County. Coupled with BBB 33#1 and 34#1, approval of these further locations is expected to deliver a robust inventory of permitted wells from which to select the initial 3-4 production well locations at Voyager.

Previously this OGDP included the three eastern wells on the map below (on existing leases shown in blue). Submission of the OGDP was paused to add the two highly regarded well locations associated with the newly acquired strategic minerals leases (shown in yellow). This approach follows COGCC guidance.

COGCC advised at the operator meeting on 14 March 2023 that it is implementing a revised permitting process which is designed to shorten the time between submission and hearing to 4.5 months. COGCC says that the current process takes on average 7 months.

Figure 1: Voyager helium development planned well locations

Additional leases and surface access acquired

Blue Star has agreed to acquire further strategic mineral leases in the Voyager area and has agreed additional highly favourable surface access. The leases comprise a total of 2987 gross acres (1382 net acres), are located high on the Voyager structure as currently mapped and are therefore expected to increase the contingent resource base at Voyager.

The additional surface access allows optimisation of the planned siting of the helium processing facility at Voyager and a more efficient gas gathering system layout.

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