Always good to get some media exposure.Blue Star’s State 16...

Always good to get some media exposure.

Blue Star’s State 16 helium well to perform as modelled - *

Blue Star’s State 16 helium well to perform asmodelled

• BNL’s State 16 well found capable of stabilised production of 250-350Mscf/d
• Rate calculated to maximise initial production rate plateau whilst providing constant feed to plant
• Well being completed for tie-in to production facilities

Special Report: Independentengineering consultants have advised Blue Star Helium that its State 16 SWSE3054 development well will be capable of stabilised production flow rates of250,000 to 350,000 cubic feet of gas.

The wellin the Galactica project within Colorado’s Las Animas County successfullyflowed gas at a stabilised rate of 285,000 standard cubic feet per day (285Mscf/d) with up to 1.9% helium content.

Thisincludes CO2 concentrations of up to 70%, which could add further to revenuesas clean CO2 can be used in food and beverages, as well as chemical sectors.

Blue StarHelium’s (ASX:BNL) Galactica/Pegasus is a large-scale project that has already been proved by four explorationwells that returned strong helium concentrations of 2-6.1% and flowed gas at rates of between 125-412 Mscf/d during testing.

Helium is a rare gas that goes for US$450-$3000 per Mcf on the spot market and between US$400 and US$500/Mcf for longer-term contracts.

This isdue to its often irreplaceable use in semiconductor manufacturing, nuclearenergy production, solar panels, optic fibre and the cooling of superconductingmagnets in MRI scanning machines.

Stabilised helium output

Resultsfrom State 16 SWSE 3054 and the earlier discovery wells have been integratedand compared to public information available from the adjacent Red Rocksdevelopment by the independent consultants.

This workfound that the permeability of the Lyons formation is 405 mD and at a producingwellhead pressure of 6 psia will allow the well to flow up to 441 Mscf/d.

Stabilisedproduction rates will range from 250-350 Mscf/d, representing constrained ratesto maximise the initial production rate plateau which is standard practice ingas developments to maximise recovery and reservoir pressure maintenance whileproviding a more constant feed rate to be achieved through the plant.

BNL addsthat its application for five additional wells at Galactica has passed thecompleteness and technical review of the Colorado Energy and Carbon ManagementCommission with a hearing expected later this year.

Thesewells are located to the south and southwest of the State 16 well toward theproposed Galactica plant site and are expected to form part of the initial gasgathering into the Galactica helium production facility.

“We arevery pleased with the results of the State 16 well, drilled on schedule, and ata significantly lower cost than previous wells,” managing director Trent Sprysaid.

“Thisdirectly benefits our economics as we continue to refine our drilling andcommercialisation models.

“The State16 well analysis returned results inline with our modelling. The impressiveflow rates support production optimisation as we drill additional developmentwells and maximize helium gas output at our processing facility.

“Ouroperations team and engineers are advancing all aspects of the development,which excitingly, now includes the purification and sale of CO2 into anothermarket which has suffered critical supply chain issues.”

Current activities

State 16SWSE 3054 is currently being completed for tie-in to production facilities.

BNL isalso continuing commercial discussions with interested buyers for purifiedhelium product.