### Latest Release (1 July 2024) vs. Previous Release (4 June 2024)
#### Key Highlights from the Latest Release (1 July 2024):
- **Flow Rates**: Independent engineering consultants have advised that the State 16 well is capable of a maximum rate of 441 Mscfd, with more stabilized rates for production optimization projected to be between 250 Mscfd and 350 Mscfd.
- **Development Wells**: A new Galactica Pegasus OGDP (Oil and Gas Development Plan) containing 5 additional development wells has passed the ECMC’s completeness and technical review, aiming to deliver into the initial helium gas processing facility at Galactica.
- **Economic and Technical Review**: The State 16 well results have been integrated with data from the JXSN#1 to JXSN#4 discovery wells and public information from the adjacent Red Rocks development. The calculated permeability for the Lyons formation at the State 16 well is 405 mD, with potential stabilised flow rates ranging from 250 Mscfd to 350 Mscfd.
- **Operational Efficiency**: The latest well was drilled on schedule and at a significantly lower cost than previous wells, benefiting the project’s economics.
- **CO2 Purification and Sale**: The operations now include plans for the purification and sale of CO2, addressing supply chain issues in this market.#### Comparison with Previous Release (4 June 2024):
- **Significant Helium Discovery**: Confirmed at the State 16 SWSE 3054 development well, with helium concentrations up to 1.90% and peak flow rates reaching 313 Mcfd, stabilizing at 285 Mcfd.
- **Flow Testing and Analysis**: Included a 12-hour natural flow period followed by a 12-hour flow period under vacuum compression, and a 48-hour pressure build-up test. The results indicated strong pressure and reservoir communication.
- **Economic Modelling**: Initial type curves and economic analyses were in progress to refine development plans and optimize production.
- **Commercial Discussions**: Ongoing with potential buyers for the purified helium product.### Analysis and Prospects Moving Forward:
1. **Flow Rate Optimization**: - The latest results show improved and stabilized flow rates for the State 16 well, providing a clearer picture of the well’s production capabilities. This enhances the overall project feasibility and supports the economic models being developed.
2. **Additional Development Wells**: - The approval of the new OGDP for 5 additional wells strengthens the development plan for the Galactica project. These wells, strategically located, will contribute to the initial gas gathering into the helium production facility, further increasing output and revenue potential.
3. **Cost Efficiency**: - The reduction in drilling costs for the latest well positively impacts the project’s financials. As more wells are drilled efficiently, the overall cost per unit of helium extracted is likely to decrease, improving profit margins.
4. **CO2 Revenue Stream**: - The integration of CO2 purification and sale into the project adds a valuable revenue stream. Given the current supply chain issues for CO2, this could become a significant contributor to the project’s financial success.
5. **Commercial Viability**: - Ongoing discussions with buyers for purified helium and CO2 indicate strong market interest, which is crucial for securing long-term contracts and stabilizing income.
In summary, the latest update shows significant progress in both technical and operational aspects of the State 16 well and the broader Galactica project. The improved flow rates, additional development wells, and enhanced cost efficiency collectively bolster the project's prospects and economic viability. The inclusion of CO2 sales adds further revenue potential, making the project more attractive to investors and stakeholders.
BNL Price at posting:
0.8¢ Sentiment: None Disclosure: Held
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