HyTerra Gears Up for Fully Funded Nemaha Drilling Campaign Post-Fortescue Boost

Strategic Investment Fuels Exploration Momentum

HyTerra Limited (ASX: HYT) is advancing its Nemaha Project in Kansas, USA, moving into a fully funded exploration phase following a strategic investment from Fortescue Future Industries Technologies Pty Ltd. This endorsement, secured with shareholder approval in December 2024, marks a pivotal step for HyTerra as it prepares to unlock the potential of natural hydrogen and helium resources in the emerging Nemaha Ridge play fairway.

The investment not only provides capital but also signals confidence in HyTerra’s approach to tapping into white hydrogen, a naturally occurring form of hydrogen with promising low-carbon credentials. As the first ASX-listed company focused on white hydrogen, HyTerra is positioning itself at the forefront of this nascent sector.

Exploration Campaign Details and Timing

The upcoming exploration campaign will encompass continued leasing activities, geophysical surveys, and a multi-well drilling program targeting key prospects identified across several geological play areas within the Nemaha Project. HyTerra’s wholly owned subsidiary, HYT Operating LLC, will oversee these operations, ensuring full control over the project’s development trajectory.

However, the timing of drilling is subject to seasonal weather constraints. Kansas is currently experiencing harsh winter conditions, with cold temperatures and storms impacting operational feasibility. Murfin Drilling Company, a well-established Midwest drilling firm with a track record of over 20,000 wells since 1926, has advised that the safest and most cost-effective window to commence drilling is after the winter months, typically from December through February. HyTerra will announce the drilling start date once conditions improve, underscoring a prudent approach to operational risk management.

Strategic Location and Market Connectivity

The Nemaha Project’s location near major industrial hubs offers strategic advantages. The project’s natural hydrogen and helium resources could be connected via existing transport infrastructure to multiple potential off-takers, including ammonia manufacturers and petrochemical plants. This proximity enhances the commercial viability of HyTerra’s resources, potentially facilitating early market entry and integration into low-carbon industrial supply chains.

In addition to Nemaha, HyTerra holds a 16% earn-in interest in the Geneva Project in Nebraska, a joint development targeting similar resources. Together, these projects represent a growing portfolio aimed at capitalizing on the expanding demand for clean hydrogen and helium.

Outlook and Industry Context

White hydrogen’s appeal lies in its potential for lower production costs and reduced carbon emissions compared to conventional, man-made hydrogen. As global energy markets increasingly pivot towards decarbonization, HyTerra’s exploration efforts could position the company as a first mover in a sector ripe with opportunity but still in early stages of development.

While the forward-looking statements in the announcement caution about uncertainties, including exploration risks, market conditions, and operational timing, the strategic backing from Fortescue and the methodical approach to exploration suggest HyTerra is navigating these challenges with a clear-eyed focus on long-term value creation.