Helium Supply Hinge: Blue Star’s Jackson 2 Drilling Progress Raises Stakes
Blue Star Helium has commenced drilling the Jackson 2 well at its Galactica helium project in Colorado, marking a key step in its ongoing development program. The well is progressing towards the Lyons Formation target with plans for flow testing and production tie-in.
- Jackson 2 well spudded at Galactica helium project in Colorado
- Intermediate conductor hole section cased and tested
- Drilling targeting Lyons Formation with wireline logging and flow testing planned
- Well expected to be completed and tied into production facilities
- Helium One Ltd funding first US$450,000 under farm-in agreement
Drilling Progress at Galactica
Blue Star Helium Limited (ASX:BNL) has officially spudded the Jackson 2 well, the fifth well in its current drilling campaign at the Galactica helium project located in Las Animas County, Colorado. This milestone marks a continuation of the company’s strategic push to develop its helium resources in a region gaining increasing attention for its helium potential.
The drilling operations have advanced through the intermediate shallow conductor hole section, which has now been cased and pressure tested. With blowout preventers installed and tested at the base of this section, the rig is preparing to drill deeper into the Lyons Formation, the primary target zone known for its helium-bearing gas reservoirs.
Technical Steps and Production Potential
Once the target depth is reached, Blue Star plans to conduct wireline logging to gather detailed geological and petrophysical data. This will be followed by flow and pressure testing designed to estimate the well’s production capacity. These tests are critical to validating the helium resource and will be benchmarked against existing data from nearby wells, including those in the adjacent Red Rocks development.
The company anticipates that Jackson 2 will be completed and connected to existing production infrastructure, advancing the commercialisation of the Galactica project. This well’s successful tie-in would represent a tangible step towards generating helium supply from this emerging play.
Strategic Partnerships and Broader Development
The Galactica project is part of a larger Galactica/Pegasus development initiative, which Blue Star is advancing in partnership with Helium One Ltd. Under a farm-in agreement, Helium One is funding the initial US$450,000 of the Jackson 2 well costs, reflecting shared confidence in the project’s potential. This collaboration helps mitigate financial risk while accelerating exploration and development activities.
Additionally, the nearby Red Rocks helium project, owned by a third party, complements Blue Star’s efforts by supporting the broader helium commercialisation landscape in the region. Together, these projects contribute to positioning Colorado as a significant helium production hub.
Outlook and Market Context
Helium remains a critical industrial gas with growing demand driven by applications in technology, healthcare, and scientific research. Blue Star’s progress at Galactica aligns with a broader industry trend of exploring new helium sources amid tightening global supply. The company’s methodical approach to drilling, testing, and infrastructure tie-in will be closely watched by investors seeking clarity on production timelines and volumes.
While the announcement does not provide detailed production forecasts or definitive timelines for completion, it signals steady advancement in Blue Star’s development pipeline. The next phases of flow testing and production data analysis will be pivotal in shaping market expectations and the company’s valuation trajectory.
Bottom Line?
Jackson 2’s drilling progress underscores Blue Star’s steady march toward helium production, with upcoming flow tests set to reveal the well’s true potential.
Questions in the middle?
- What initial flow rates and pressure data will the Jackson 2 well deliver?
- How soon can Blue Star integrate Jackson 2 into commercial production?
- What impact will Helium One’s farm-in funding have on Blue Star’s capital strategy?
