Quantum Helium (LSE:QHE) (AIM: QHE) said an extended production test at the Sagebrush-1 well in Colorado has commenced, a practical step from discovery toward potential production that will inform development plans and reserve conversion.
Historic testing at Sagebrush-1 recorded helium concentrations of approximately 2.76% from the Leadville Formation. The current programme is designed to establish flow characteristics and confirm the commercial potential of the reservoir, the company said.
The well benefits from existing infrastructure and does not require new drilling, allowing for a lower-cost, more efficient test campaign. Testing is expected to run over the coming weeks, with results to be announced once analysis has been completed, the company added.
Quantum holds more than 1.1 Bcf of independently verified prospective helium resources across its Sagebrush and Coyote Wash projects, making it one of the larger verified helium resource holders among London-listed peers, according to the announcement. The firm said the timing is favourable given tightening global helium markets and rising spot prices.
Chief Executive Officer Howard McLaughlin is on site to oversee operations as the company moves through this critical phase.
"Commencing the extended production test at Sagebrush-1 is a major milestone for Quantum and an important step forward for the company. This well has already demonstrated the presence of helium, and this programme is focused on confirming flow rates and commercial potential. The results will be critical in moving our prospective resources towards reserves and defining the pathway to development," he said.
McLaughlin added: "With strong momentum across our Colorado portfolio and increasing global demand for helium, we believe this is a highly significant phase for the Company."
