Initial results encouraging with significant helium shows from multiple zones

This was Royal Helium drilling its Climax-4 well around this time last summer. It has just TD’d its Val Marie-1 well in the same region on Aug. 16 of this year. Photo by Brian Zinchuk

 

SASKATOON — On Aug, 16 Royal Helium Ltd. reported that its Val Marie-1 helium exploration well has reached its total depth of 2,596 metres.

“Mass spectrometer and gas chromatography readings encountered significant helium shows with multiple intervals ranging from 5 to 10 meters,” the company said in a press release. “Numerous zones will be completed and tested within the Devonian and the upper, middle and lower Cambrian Deadwood formations. The prospective intervals will be completed and tested along with the Ogema testing this fall. Royal looks forward to providing further updates and results as completions and testing are concluded.”

Andrew Davidson, president and CEO of Royal, said in a release, “Val Marie-1 was drilled into the northern extension of the Bowdoin Dome, a large structural feature straddling Saskatchewan and Montana. The Bowdoin Dome has been successfully drilled for helium in Montana, so we are pleased to find multiple intervals of elevated helium readings aligned with the three main formations where we have helium bearing rocks at Climax and Ogema. While we work on putting the Climax and Steveville wells on production, we look forward to testing and advancing Val Marie and Ogema.”

Shayne Neigum, manager of well operations, added, “We are pleased to find that the Devonian horizons showed significant increases from background levels with the mass spectrometer, as well as our well logs, indicating analogous gas bearing strata with very similar petrophysics to North American Helium’s producing wells. This is in line with our expectations that the Bowdoin Dome is a major source and gas migration driver for the helium produced in Saskatchewan. We look forward to completing and flow testing these stacked shows within the Devonian and Cambrian horizons.”

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“Drilling this helium exploration well has qualified two helium permits at Val Marie to now be converted to 21-year leases for Royal. Whilst the objectives of this drilling program were aligned with the goals of the previous programs at Climax and Ogema, the use of directional drilling to explore both permits with one wellbore was unprecedented and a first within the industry.”

Qualified for incentive

On July 26, Royal announced that the Climax/Nazare project has received approval from the Minister of Energy and Resources of the Government of Saskatchewan and the Saskatchewan Petroleum Innovation Incentive (“SPII”) program. Under the terms of the approval, Royal can receive up to $4,227,185 in Royalty Tax Credits based on eligible project costs incurred to date at Nazare.

Additional royalty tax credits will be applied for on an ongoing basis for eligible costs associated with expenditures such as the upcoming horizontal wells drilled into Nazare, construction of processing facilities, and all other applicable programs into the future.

Royal anticipates receiving the first credits during the current quarter, with the remainder to come as the project continues to advance. The royalty tax credits are readily transferable and salable within the province. Any transfers and/or sales will be reported in Royal’s quarterly financial statements.

Davidson said in a release, “We are extremely pleased with the agility the Saskatchewan government has shown in quickly implementing their new Helium Action Plan and how quickly they have been able to process and approve our first submission. An obvious benefit to Royal now and going forward, this program provides Saskatchewan operators with a significant cost advantage over most jurisdictions in North America. All proceeds received or royalties saved by Royal as a result of this program will be re-invested into the continued expansion of our helium production plans in Saskatchewan”.

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Listing on London exchange

And on Aug. 17 Royal Helium Ltd. announced its intention to seek a secondary listing of its common shares on the London Stock Exchange’s AIM market (AIM) alongside its current listing on the TSX Venture Exchange, subject to the preparation and acceptance of all the requisite documentation. The company has engaged Strand Hanson Limited of London, UK to act as the company’s nominated advisor (NOMAD) on the proposed listing.

On this, Davidson said, “Helium usage and its supply constraints are global in nature, and we believe that expanding our shareholder base to Europe will be beneficial to unlocking the value of Royal’s assets at this pivotal juncture as we move toward production and sales alongside our exploration activities. We are looking forward to the increased liquidity, market size and investor exposure potential of an added international listing.”

Royal will hold its annual general and special meeting of shareholders on Sept. 14, 2022, which will include matters amending the articles of the company in preparation for the secondary listing. A management information circular and related meeting materials will be shortly sent to shareholders and filed on SEDAR at www.sedar.com

 

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