Quantum Helium (QHE) has received approval from the U.S. Bureau of Indian Affairs (BIA) for the assignment of the Sagebrush lease, where the company holds a 90% working interest.
The approval represents a key regulatory milestone and clears the way for Quantum to be formally appointed operator before commencing an extended production test at the Sagebrush-1 well in Colorado. The company said testing is expected to begin as soon as operatorship is confirmed.
All long-lead equipment required for the production test has already been secured, allowing the company to move rapidly into operations once the final administrative steps are completed. The approval follows the recent BIA approval of the Coyote Wash Indian Mineral Development Agreement, strengthening Quantum’s regulatory position across its Colorado helium portfolio.
The extended production test will initially target the Leadville Formation, a carbonate reservoir recognised as a significant helium target across the Four Corners region. Historic drill stem testing of the Leadville interval at Sagebrush-1 recorded non-combustible gas containing 2.76% helium alongside methane and heavier hydrocarbons.
Wireline logs identified about 94 feet of net gas pay, and the well continued to build pressure at the conclusion of testing. The well was subsequently cased and remains available for re-entry, providing Quantum with a time and cost advantage as it advances the project.
The planned programme will include acid stimulation and sustained flow testing to evaluate productivity, reservoir characteristics and gas composition. Data generated from the programme is expected to support reservoir modelling and help advance resources toward potential reserves and commercial development.
An independent evaluation by Sproule ERCE confirmed 2U gross helium prospective resources of 134 MMscf at Sagebrush, with an upside case of 269 MMscf. Combined with the Coyote Wash project, Quantum’s Colorado portfolio now hosts more than 1 BCF of independently verified gross helium resources.
Quantum Helium’s Chief Executive Officer Howard McLaughlin said: "Receiving BIA approval for the assignment of the lease we bought from Seeley Oil Company is a major milestone for the Company and allows us to move immediately following operatorship into the next operational phase.
"Sagebrush-1 has already demonstrated the presence of helium in the Leadville Formation, with historic testing confirming a concentration of 2.76%. The well encountered approximately 94 feet of gas pay and concluded testing while still building pressure, which is highly encouraging from a reservoir perspective.
"The upcoming extended production test will allow us to apply modern completion techniques, including acid stimulation, to properly evaluate the productivity of the Leadville reservoir. The data generated will be critical in confirming flow rates, reservoir performance and the broader commercial potential of the Sagebrush helium accumulation.
"With 3D seismic confirming the size and geometry of the Leadville structure, we believe the project is now well positioned to demonstrate its value through this production test."
View from Vox
Quantum Helium moves closer to testing its Sagebrush discovery after securing the final regulatory approval needed to progress operations. With a drilled and cased well already in place, alongside independently verified resources and newly acquired 3D seismic, the extended production test could provide a key catalyst as the company works to demonstrate commercial helium flow from the Leadville reservoir.