Quantum Helium (QHE ) has received notification that operatorship of the Sagebrush project in Colorado has been approved by the Bureau of Indian Affairs.
This is the final regulatory step that now allows Quantum to take operational control of Sagebrush.
The news follows an extensive and proactive engagement process undertaken by the company and its advisors with regulatory authorities and stakeholders.
A recent visit to Colorado undertaken by senior figures at Quantum Helium, included meetings with the Ute Mountain Ute Tribe and regulatory bodies, and contributed positively to the progression and successful conclusion of the approvals process.
With notification of operatorship approval now received, Quantum is moving into the next operational phase at Sagebrush, with mobilisation for the extended production test at the Sagebrush-1 well expected to commence shortly after Easter.
The extended production test is expected to run over a number of weeks.
The well historically encountered non-combustible gas with measured helium concentrations of approximately 2.76%, providing strong technical validation of the helium potential within the Leadville Formation. The upcoming test is designed to assess flow rates and confirm commercial deliverability.
he extended production test is also expected to support the progression of the company's existing helium resources into reserves, representing a significant step forward in the commercial development of the project.
Extensive planning and procurement of long-lead items have already been completed, allowing Quantum to move efficiently into this testing phase.
The advancement to testing at Sagebrush comes at a time of increasing global focus on helium supply security, with recent geopolitical developments in the Middle East disrupting a significant portion of global production.
It’s reckoned that up to one-third of supply has been impacted, with suppliers already implementing allocation measures and prioritising critical sectors such as medical imaging, semiconductor manufacturing and aerospace.
"This is a major milestone for Quantum and reflects a significant amount of work by the team to advance Sagebrush through the regulatory framework,” said Howard McLaughlin, chief executive of Quantum Helium.
“We would also like to thank the Ute Mountain Ute Tribe for their continued support and engagement throughout, which has been invaluable in reaching this point, and we are grateful to our shareholders for their patience throughout what has been a detailed approval phase. Receiving notification of operatorship approval marks a key step forward for the company, allowing us to move into the next phase of activity, with mobilisation for the extended production test scheduled to commence shortly after the Easter break. Sagebrush-1 has already demonstrated the presence of helium, and this next stage is focused on confirming its commercial potential and advancing our resources towards reserves.
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Quantum Helium has already demonstrated the existence of over a billion cubic feet of independently assessed prospective helium resources across Sagebrush and Coyote Wash, so these tests aren’t merely exploratory. We are much further along the road to production than that. What’s more, the work is taking place against the backdrop of a strong helium market, supported by cashflow from Quantum’s oil production. This is a strong position to be in, and sets Quantum Helium up nicely for a major step up in the world.