June 19th, 2024

Calgary company finds helium deposit near the Hat

By COLLIN GALLANT on June 1, 2024.

cgallant@medicinehatnews.com@CollinGallant

A helium deposit has been found on the outskirts of Medicine Hat – the city that announced six years ago it could be an epicentre of the developing niche resource sector.

Global Helium, a Calgary-based exploration and development company, announced this month it has proven amounts of the rare element in two wells drilled east of Dunmore in Cypress County.

Another well planned for later this year will give a better estimate of the pool, which will determine this size and scope of a local processing facility to exploit the field, say company officials.

“Medicine Hat is our core operating area, our focus area, our No. 1 project that we’re focused on and will be putting capital to,” Global president Jesse Griffiths told the News this week.

“We’ve had a lot of success with two great wells, and we’ll be digging into this in the near term and long term.”

Global’s portfolio also includes tracts of land in Saskatchewan, northern Alberta and Montana.

He also said his firm is not making big promises, but concentrating on delivering solid results.

Current reserves proven by the wells “justify” initial processing facilities, but larger investment and processing capacity could be required. Work this year will determine the scope of the facility.

“We’d like to continue drilling and really prove out the extent of the reservoir,” said Griffiths. “Building facilities are big projects, very capital intensive and a lot of challenges. We’d really rather not make a mistake.”

Global calls the area the “Manyberries Asset,” but it’s located about 10 kilometres near Dunmore on the same fairway of Global’s land position that extends from Manitoba, through the County of Forty Mile and into Montana.

In the vicinity, the Weil Group applied to Cypress County several years ago to develop risers and storage at a site nearby the Global finds, but the privately owned company based in the U.S. doesn’t publish financial or operating data.

Global’s releases this year mark the first publicly announced discovery of the material formed deep underground near Medicine Hat after work has focused on southwest Saskatchewan, Brooks and Montana.

This winter another firm, Royal Helium, announced production numbers from a well drilled in the County of Forty Mile, and announced a “multiple” location drill program will proceed.

In late 2023, Royal Helium commissioned a “purification plant” near Princess, in Newell County, to process helium from the “Steveville” area, near the Red Deer River.

Premier Danielle Smith took part in the ribbon cutting at the plant, estimated to cost more than $20 million.

“It’s really the start of a new era for Alberta,” Smith said.

Successive governments in Alberta have also promoted the possibility of adding the relatively small, but lucrative, sector of highly sought after element to the provincial economy. A provincial support program has been promised for several years. Saskatchewan announced it would treat the material similar to rare-earth mineral processing, like lithium extraction.

Helium, needed in super computing and chip manufacturing, currently fetches prices several hundred dollars per 1,000 cubic feet on world markets, compared to several dollars for the same amount of natural gas,

The element forms deep underground and migrates to the surface naturally due to its low atomic weight, but can become trapped in non-porous domes of rock. Targeting those domes, companies extracted the gas like they would natural gas.

Giffiths said his firm was impressed with the level of drilling talent available in the southeast, and plans to keep spending and contracting as much in the region as possible.

But, helium cannot be transported like conventional methane. Onsite purification is required before it is loaded into specialized tanker trucks for transport to larger refineries. The closest to Western Canada is in Colorado.

Spurring interest to build a Canadian liquefaction plant near the Hat was a secondary goal of a limited helium exploration program launched by the City of Medicine Hat’s energy company in 2018.

It found some quantity of helium while also searching for deep oil deposits in the greater region, and currently farms out that well to an unnamed company.

A number of junior producers and explorers targeted helium to exploit the rising world price, dwindling supply and higher demand for the inert element in high-tech applications, and the city hoped to become central “senior” presence.

Meanwhile, helium development has moved ahead in southwest Saskatchewan, when North American Helium and other firms began developing a series of sites southeast of the Cypress HIlls and as far east as Mankato.

Global recently signed a joint development agreement with North American for one well on its 1.5-million acre portfolio in that province. It would be located northeast of Swift Current.

Separately, North American announced it would create another operating area this year north of Gull Lake.

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