Blue Star Helium Drills High-Flow Wells, Secures Key Plant Permit for 2025 Production

Operational Progress at Galactica/Pegasus

Blue Star Helium Limited (ASX:BNL) has made significant strides in its helium exploration and development activities during the quarter ended 31 March 2025. The company drilled four development wells at its flagship Galactica/Pegasus project in Las Animas County, Colorado. These wells, Jackson 31, Jackson 4, Jackson 29, and Jackson 27, are part of a six-well development program funded in partnership with Helium One Global Ltd (AIM:HE1).

All wells flowed naturally with robust and stabilised flow rates, underscoring the quality of the reservoir. Notably, the Jackson 29 well delivered the highest stabilised helium flow rates, ranging between 350 and 450 thousand cubic feet per day (Mcfd), with a maximum potential rate reaching 550 Mcfd. These rates are well aligned with the company’s engineering models and bode well for commercial production.

Helium Concentrations and Gas Composition

Gas analysis from the wells revealed commercially attractive helium concentrations. Jackson 29 recorded helium content up to 3.3%, while Jackson 4 exhibited a high carbon dioxide concentration of 85.93%, which is important for the planned CO2 processing operations. Additionally, re-sampling of the State 16 well showed an increase in helium concentration to 2.17%, a material uplift from previous measurements.

The gas composition data is critical for optimizing processing plant design and ensuring the production of high-purity helium and beverage-grade CO2. The company’s ability to blend gases effectively will be key to maintaining optimal throughput and product quality.

Permitting Milestone and Plant Construction

Blue Star achieved a major milestone with the receipt of a “Major Permit” from the Board of County Commissioners of Las Animas County, authorizing the construction of a helium and CO2 processing plant at the Galactica/Pegasus site. This approval is a crucial step toward commercial production and reflects the company’s progress in meeting regulatory and environmental requirements.

Construction activities are underway, with site preparation and pad construction progressing. The company remains on track to commence first helium production in the first half of 2025, aligning with its strategic timeline.

Great Plains Field Testing and Strategic Acquisition

Beyond Galactica/Pegasus, Blue Star continued testing at the Great Plains Field in Lincoln County, Colorado. Testing of the State 16 well demonstrated strong reservoir performance with a constrained flow rate of 2,500 Mcfd and modelled open hole flow potential of 10,000 Mcfd, confirming the field’s commercial viability.

Helium concentrations at Great Plains were consistent with expectations, ranging between 1.32% and 1.36%. The company is advancing due diligence on a strategic acquisition option for a portfolio of helium assets in Colorado, which includes existing wells, processing infrastructure, and gathering systems. This acquisition would complement Blue Star’s existing operations and support its growth ambitions in the North American helium market.

Financial Position and Outlook

Blue Star ended the quarter with a cash balance of A$2.8 million and zero debt, providing a solid financial foundation to support ongoing development and operational activities. The company’s JV arrangement with Helium One Global Ltd reduces capital requirements for the Galactica/Pegasus project, easing near-term cash outflows.

Looking ahead, the focus will be on completing drilling of the remaining development wells, advancing plant construction, and initiating helium production. The company’s technical results and regulatory progress position it well to capitalize on growing demand for helium, a critical element in high-tech industries such as semiconductors, medical imaging, and aerospace.