The upcoming flow tests will of course dictate the early commercial economics of this venture, so in that respect they are critical. Unfortunately, Geologic Hydrogen exploration is still a very recent development and we don’t have much data to go on, for comparison.
Mali Bougou1 is the only valid test result I can find so far. Brazil has put out a broad range assessment of anticipated flow that is ridiculous imo and Albania is claiming ‘the world’s highest H2 flow rate’ but they haven’t tested properly yet. I don’t doubt that both of those finds will be commercial but they need to prove it, as do GHY.
So Mali has sunk 28 wells I believe at last count and you don’t sink 28 wells unless it’s commercial. Yet, if we look at the only public data on flow testing to come out of Mali for Bougou1, I would have said it was ‘not’ commercial. Clearly they found ways to improve on their first attempt.
This is what has been published:
"Production test
The first H2 reservoir discovered when drilling for water has shown an approximate flow rate of 1500 m3 H2/day. It achieved this flow rate even though it was not a well that had been initially designed for a gas production and even though it had previously been cemented up before the test. By analysing the production data collected since the discovery of this historic well in 1987 up to the present, it was observed that after 11 years of operation to generate electricity, no pressure decline has been recorded as would be expected with a conventional oil and gas reservoir. To date, a pressure increase (from 4.5 to 5 bars) has been observed. This shows that the H2 accumulation is progressively recharged by a dynamic system."
Now, 1500m3 is nothing to write home about even if you are only drilling shallow wells. Clearly their other wells must have shown better results. Here’s my point though: Note the mention of 4.5 to 5 bars of pressure, which converts to just 74 psia at 5 bar.
11.126 cubic metres of Hydrogen = 1kg so 1500 = 134.8 kg per day x 365 = 49,209 kg pa. At $8 per kg this equates to $393,670 pa. That is not very impressive, and yet they still proceeded to drill more than 20 wells.
https://www.nature.com/articles/s41598-023-38977-y
Now, look at GHY prospectus document page 184 (which is page 20 of the Teof Rodrigues Resource Report of September 2021:
https://www.goldhydrogen.com.au/docs/Final-GH-Replacement-Prospectus_No_Application_Form_41065594-1.pdf
Note the Ramsay resource assessment shows 1122 psia at 750mtrs.
A crude comparison would imply 15x the Mali flow rate at 22,500 cmg/d. That’s 8.2m cmg pa converting to 738,135 kg at 11.126 metres conversion x $8 assumed sale price = $5.9m pa
Even if, for caution, I halved that number, $2.95m pa hydrogen flow would be very commercial indeed.
Helium Flow on top?
Look, I don’t want to get carried away here because sometimes things just don’t go to plan, but for an early exploration project, from what we already know, the probabilities here look pretty good to me.
(20min delay)