Quantum Helium (AIM:QHE) said engineering work is nearing completion on the next phase of testing and development at its Sagebrush Project in Colorado, where it holds a 90% working interest.
The AIM-listed helium and hydrocarbon explorer's Extended Production Test at Sagebrush-1, completed earlier this year, confirmed helium-bearing gas at approximately 2.5%, strong reservoir connectivity and rapid pressure recovery, alongside commercial oil in the Leadville Formation.
Reservoir pressure recovered to more than 70% of estimated virgin pressure within four days of the initial acid stimulation, with analysis suggesting recovery could exceed 90% given more time.
The next programme is expected to apply a larger stimulation treatment to increase contact with the natural fracture network and improve sustained flow rates, with final recommendations due shortly and funding to come from existing cash resources.
Quantum is also preparing permit applications for two near-term oil targets, Little Ute and Yellow Jacket, both interpreted extensions of productive Ismay trends within existing Sagebrush acreage.
Three larger prospects have been identified alongside these: Mariano Wash and Sagebrush East within the company's existing project areas, and Lula on adjacent acreage, for which an application is being prepared for submission to the Tribe.
Quantum holds independently assessed gross 2U helium resources of 1.104 billion cubic feet (Bcf) across Sagebrush and Coyote Wash.
"We are not only progressing Sagebrush towards its next phase, but also building a broader Colorado drilling pipeline with the potential to support a multi-field helium and oil business," said chief executive Howard McLaughlin.
The company separately said its application for an OTC Markets listing in the United States is in good standing, with confirmation of a listing date expected shortly.
SP Angel analyst David Mirzai, in a note, highlighted that the engineering assessment will define a more extensive stimulation and testing programme to boost reservoir contact at Sagebrush. The next programme is designed to increase contact with the natural fracture network and improve sustained flow performance to underpin development planning.
Permitting and drill planning are advancing across five additional opportunities, and the note expects a steady stream of news flow over the next 12 months to validate resources and de-risk the portfolio.
News Intelligence what this means for the company
Quantum Helium's Extended Production Test at Sagebrush-1 confirmed 2.5% helium-bearing gas alongside commercial oil, with reservoir pressure recovering to over 70% of virgin pressure in four days—suggesting the well can sustain production. The company is now engineering a larger stimulation programme to improve flow rates and has moved five new Colorado drilling targets into permitting, broadening its pipeline beyond the initial Sagebrush discovery. This advances the transition from exploration to development: the test proved the resource exists and flows; the next phase aims to optimise it.
The 2.5% helium concentration aligns with a 1994 sample from the same well (2.76%), validating the resource quality. Funding the larger stimulation from existing cash removes near-term dilution risk, though the company's ability to sustain production and move to commercial scale depends on whether the next phase delivers the flow-rate improvements engineering is targeting.
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