Grand Gulf Energy Ltd (ASX:GGE, OTCQB:GRGUF) is making noteworthy progress in its Red Helium Project, highlighted by its majority-owned subsidiary Valence Resources LLC’s successful acquisition of a Surface Land Use Agreement (SLUA) for the Jesse-3 surface location.
The Company also received a non-binding indicative proposal from a US-based independent oil and gas company for potential farm-in participation in the Project.
Jesse-3 Surface Land Use Agreement
The recently executed SLUA marks a pivotal achievement for Grand Gulf’s Red Helium Project, with this agreement allowing for the easement and construction of the Jesse-3 well-pad and minimal well-head facilities necessary to connect to the adjacent pipeline linked to the Lisbon Valley helium processing plant. The inclusion of the Lisbon Valley pipeline connection offers a strategic advantage, facilitating the transportation of produced helium to processing facilities efficiently.
Figure 1: Red Helium Project
Grand Gulf’s evaluation of pre-used production equipment demonstrates a commitment to cost efficiency, with the utilisation of such equipment having the potential to notably reduce the initial capital expenditure required for production, expediting the Project’s timeline to within six months.
Furthermore, advanced negotiations with multiple drilling rig contractors and long lead equipment suppliers signify the Company’s proactive approach in ensuring the availability of necessary resources to support the planned Q4 2023 Jesse-3 well-spud.
Figure 2: Grand Gulf Energy is a US-Focused Pure-play He Explorer
The Red Helium Project, based in the Paradox Basin, Utah, within the Four Corners region known for its helium abundance, aims to tap into a sizeable 12.7 billion cubic feet of gross unrisked potential helium resource. Notably, the Project is home to the Jesse helium discovery, showcasing a noteworthy helium content of 1%.
It’s for these reasons that the Company has attracted the attention of an independent US-based oil and gas company, which has presented a non-binding indicative proposal for a potential farm-in arrangement with Grand Gulf Energy. This proposal underscores the attractiveness and viability of the Red Helium Project, as well as the potential for collaborative growth within the industry.
It’s important to note that while this non-binding nature proposal is a positive step forward, it remains subject to several crucial factors, including further negotiations, technical assessments, legal considerations, and regulatory approvals.
GGE’s Australian Stock Exchange-listed share price is currently trading at 1 cent (2.01pm UTC+ 8 hours).