Brian Zinchuk is editor and owner of Pipeline Online
Steve Halabura. Photo by Brian Zinchuk
Sometimes, you can only ride one horse at a time. And for Royal Helium’s vice president of exploration as well as CEO of Buffalo Potash, Steve Halabura, the time is to choose that one horse.
On Aug. 17, Royal Helium announced that Halabura was departing, and would be replaced by Shayne Neigum. Neigum is the new chief operating officer and head of exploration for Royal, the second-most active helium explorer in Saskatchewan. On Aug. 16, the company announced it had reached total depth for its first well in the Val Marie area, after having drilled four near Climax and two near Ogema.
In a press release, Royal said, “Shayne has worked closely with Stephen Halabura in identifying and acquiring Royal’s key helium land positions and prospects since 2017 and has executed the drilling and completion operations on all of Royal’s wells to date. Stephen Halabura will be stepping down from his position as the company’s VP exploration, handing the reins to Shayne.”
Royal said, “Shayne Neigum holds a B.Sc. Honours in geology from the University of Saskatchewan. Having spent his entire career in the Saskatchewan oil and gas industry, Neigum has extensive experience in deep-hole drilling, land evaluation, geological mapping, formation modelling and reserves analysis. He also has a well-developed understanding of all operations management on a drill site and a strong technical background of upstream, midstream, and downstream aspects of the industry.”
Neigum told Pipeline Online he would be continuing on with the day-to-day and oversight. “We need to keep drilling, and we’ve got big plans to keep drilling We’ve got a lot of really good land across the province of Saskatchewan now. We’ve expanded into Alberta, which is very exciting.
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“I’m just honoured to be able to take the reins from Steve and continue developing all the groundwork Steve started with. I was able to work beside him for a couple of years now.”
A key thing will be going from the exploration phase to production. To that end, Neigum said they have requests for quotes out and tenders on equipment.
Andrew Davidson, President and Chief Executive Officer said, “We are pleased to have Shayne leading the charge as we move from pure exploration to continued exploration, development, and production within our vast helium land packages that he helped secure. Beyond his management skills in bringing our drilling in on budget, his geological expertise, foresight, and tenacity at the drill bit was instrumental in making the Nazare discovery at Climax.”
Davidson added, “We all would like to extend our tremendous gratitude to Steve for the extensive study and work he has provided Royal since its inception. Without Steve, Royal would not have achieved what it has to date. Royal wishes Steve all the best in his next venture and are very pleased that Steve will remain available as a technical consultant going forward.”
Steve Halabura, right, during an investor showcase at Royal Helium’s Climax-4 well in the summer of 2021. Photo by Brian Zinchuk
Halabura focusing on Buffalo
Pipeline Online spoke to Halabura by phone on Aug. 17. He said, “I’ve been busy on a number of projects, and it was tough decision to leave Royal. You know, the Royal team is the best in the business, all great guys, but I really need to focus on Buffalo. Potash is something I’ve been I’ve been involved in a long time, and I want to focus 100 per cent of my time on getting Buffalo in the ground, drilling and making potash.”
With the war in Ukraine affecting global potash supply, potash companies in Saskatchewan are ramping up.
To that end he said, “I don’t see what’s happening in the potash world as a blip. This is something that’s going to be long term. And the stakes will go up, when you see what’s happening with respect to other fertilizers. Look at urea and other nitrogen-based fertilizers, or phosphate – China’s the number one supplier of it. I think fertilizers are going to become as hot a button as energy, given these major structural changes.
“Buffalo must move from a work in progress to becoming a producer. It’s taken a long time for us to really hone the not only our unique technology, but also a new business model. And I really believe, when you look at increasing Saskatchewan and its ability to make potash, there is a third way. The first way, “Big”, is BHP Billiton’s strategy of building a big mine. The second way, followed by established producers like Nutrien, is expand existing mines.
“But there is a third way. I don’t know what you call it, but look at what Western, Gensource, and Buffalo are doing: build smaller scale, modular mines using innovative solution mining technology, and selling direct to purchaser. That’s a third way of doing it.”
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“The third way pivots the oil and gas expertise and technology we have in Saskatchewan from oil to potash. Our patents allow us to do potash solution mining in a manner similar to steam-assisted gravity drainage (SAGD) which is used in heavy oil and oil sands”.
On July 18, Buffalo announced its “first spoke” in its hub and spoke model by means of an option agreement with Continental Potash Corp, a new company.
Their release at the time said, “The option agreement contemplates Continental Potash earning 100% of the rights to the Disley Project, subject to a 3% gross over-riding royalty payable to Buffalo as set forth in a separate technology license agreement, by undertaking the work required to advance the project to the downhole test phase. Continental Potash is a recently formed company specifically organized to advance Disley.
“The agreement contemplates investment by Continental as per two phases, the “first” and “second” option elections. At the exercise of each option, Buffalo will receive common shares of Continental. Members of Buffalo’s management team will serve as officers and directors of Continental, thereby ensuring Buffalo retains control over the deployment of its patented HLD mining technology.
“Buffalo also closed a private placement of a total of 4,592,013 Class A Common and Class A flow-through shares for total proceeds of $1,170,420. Immediately upon closing PP3A the company will commence PP3B, also consisting of Class A common and flow-through shares.”
Halabura explained on July 27, “What we’ve done is we’ve got a hub and poke model where the mines, or “spokes”, are standalone developments. The first Spoke is Disley. The opportunity came up to participate in forming a public company around that asset, and we accepted that that opportunity. Buffalo will be a significant shareholder of Continental, which will be good for Buffalo shareholders. The Buffalo team will also provide operational management to Continental.”
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“Disley is a particularly attractive property, as it offsets a 60s vintage potash solution mining pilot. Let’s get that built and see how that goes,” Halabura said. “Our whole point is to speed up and ramp up the deployment of small standalone mines that can lead to a central fertilizer facility.”
On the left is the Disley Block secured by Buffalo Potash. Map courtesy Ministry of Energy and Resources
Buffalo has said that facility would be located at Estevan.
Asked about drilling plans, he responded, “We’re hoping in the fall. We finished our 3D seismic at Disley. That was completed in June. We’re just waiting to get our interpretation from our seismic consultant. That should be in the next week or so. That will tell us where we want to be putting our first drill holes.”
“I’m thinking October or November. That’s the plan, and we are pushing as hard as we can.”
As for the company’s plans in Estevan, he said they’ve identified suitable lands for Buffalo’s planned processing facility. “We’ve shortlisted some lands now. We focused a lot on the mines so we can go out and start making some product.
“You need product first. Since the facility is going to be pretty much off the shelf, it’s more of an engineering task. The sooner we can make a product, the sooner we get cash flow, even making a raw KCL product for oilfield use. Nowadays go out there and try to get KCL or KCL brines for kill fluid or frack fluid. It’s a hot commodity,” he said. “These are opportunities for shorter term cash flow”.
Halabura remains busy in other ways. Halabura has been a columnist with Pipeline Online since its launch and has been the founder of the Sunflower Network. That’s a group of Saskatchewan people, mostly business people, who have been working to assist Ukrainian refugees coming to Canada and settle here in Saskatchewan. In the last week, one family arrived destined for Weyburn, and another family arrived, heading for Estevan. The number of refugees now the group has helped numbers over 30.
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