Quantum Helium (QHE ) has been successful in confirming the presence of helium-bearing gas, reservoir connectivity and commercial oil production in its extending production test at the Sagebrush-1 well in Colorado.
The production test also generated significant new data to support future development and resource evaluation.
Helium concentrations of 2.5% have now been confirmed by laboratory analysis of recovered gas samples, consistent with historical testing and significantly above typical industry concentrations of approximately 0.3% to 1.0%.
The company has successfully completed an acid fracture stimulation programme. Analysis of downhole pressure and production data indicates the treatment established connectivity with the natural fracture system and confirmed strong virgin reservoir pressure characteristics, with pressure build-up reaching approximately 90% of virgin reservoir pressure within four days following stimulation, as measured by downhole pressure gauges.
Commercial oil production was also identified from the Leadville Formation, between depths of 7,250 feet and 7,360 feet, an unexpected outcome that opens a new hydrocarbon play in the Sagebrush area, with potential rates of up to 40 barrels per day gross to working interest indicated by initial testing results and reservoir analysis.
More than 80 barrels of oil have been recovered during testing operations to date.
The production, pressure and fluid data will now be provided to Sproule ERCE for a review that will include assessment of the newly identified oil potential.
Meanwhile, the next phase of work is already underway.
Quantum Helium expects to be able to release the flow rate potential from the Leadville following ongoing clean up operations to remove injected fluid.
"We are nearing completion of a complex testing programme designed to evaluate reservoir potential and identify the most effective engineering solutions for field development,” said Howard McLaughlin, chief executive of Quantum Helium.
“The preliminary results obtained to date have exceeded our expectations in several key areas and we look forward to conducting a detailed review of the data to help guide the future development strategy for both helium and oil across Sagebrush and the wider portfolio. The extended production test has confirmed helium concentrations consistent with historical testing, demonstrated reservoir connectivity, strong pressure characteristics and the effectiveness of our fracture stimulation programme. Pressure build-up following stimulation reached approximately 90% of virgin reservoir pressure, while recovered gas compositions match those recorded during the original 1993 drill stem test.”
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Sagebrush is already known to host an independently-verified 2U gross helium resource of 134 MMscf, so this work is not about confirming the presence of helium. Rather, it is all about the potential for commercial extraction, and so far the signs are good. It doesn’t hurt that a useful amount of oil has unexpectedly been added into the mix, but the key factor is the confirmation of helium at significant percentages, and the early indications that it will flow. Further confirmation of flow rates is still pending, so there’s still a certain amount that still needs to be establish. But at this stage it certainly looks like Quantum Helium is on the right track.