Blue Star Helium Drills Six Wells, Secures $4.54M to Launch Production in H2 2025
Blue Star Helium has successfully completed its 2025 Galactica drilling program, securing a major permit for CO2 processing and preparing to start commercial helium production in the second half of 2025. The company also raised $4.54 million to fund ongoing development.
- Completion of six development wells with positive helium flow results
- Major Facilities Permit granted for Pinon Canyon CO2 processing plant
- Transition to initial commercial helium production planned for H2 2025
- Strong sustained flow rates and helium content confirmed at Great Plains Field
- Raised $4.54 million through a two-tranche equity placement
Galactica/Pegasus Drilling Success
Blue Star Helium Limited (ASX – BNL) has marked a significant milestone with the successful completion of its 2025 drilling program at the Galactica/Pegasus Helium Project in Colorado. The company drilled six development wells, all delivering consistent positive results that underscore the project's substantial helium production potential. These wells, funded by joint venture partner Helium One Global Ltd, have satisfied the farm-in obligations, securing Blue Star a 50% stake in the project.
Flow testing across these wells revealed stabilised helium flow rates ranging from 250 to 600 thousand cubic feet per day (Mcfd), with helium concentrations generally exceeding 1%, and in some wells reaching above 3%. This performance supports Blue Star's strategy to rapidly progress towards near-term monetisation of helium resources.
Regulatory Approval and Commercial Production Plans
In April 2025, Blue Star's wholly owned subsidiary received a Major Facilities Permit from the Las Animas County Board of Commissioners, authorising construction of the Pinon Canyon CO2 processing plant. This facility is critical for processing the CO2-rich gas streams associated with helium production, enabling the production of beverage-grade CO2 alongside helium.
With permitting in place, Blue Star is transitioning the Galactica project into initial commercial production, targeted for the second half of 2025. The company is advancing engineering design, site civil works, and equipment mobilisation to support commissioning and tie-in of production wells to the Pinon Canyon plant.
Great Plains Field Testing and Strategic Expansion
Beyond Galactica, Blue Star is exploring strategic expansion opportunities in Colorado's Great Plains Field. Recent testing at the Bubba 3 well demonstrated a strong sustained flow rate of 740 Mcfd with helium content around 2%, confirming the area's potential. The company is conducting further analysis to assess commercial viability and guide development decisions.
This aligns with Blue Star's broader strategy to expand its helium resource base in North America, leveraging technical expertise and infrastructure to become a significant helium producer.
Financial Position and Capital Raising
At the end of the June quarter, Blue Star reported a cash balance of A$865,000 with zero debt. To support the completion of Phase 1 development at Galactica and ongoing operations, the company successfully raised A$4.54 million through a two-tranche equity placement. The proceeds will be applied to working capital, plant construction, site installation, and acquisition of additional facilities.
This capital injection strengthens Blue Star's financial position as it moves towards commercial production and scales up its helium and CO2 processing capabilities.
Bottom Line?
Blue Star Helium’s strong drilling results and fresh capital position it well for commercial production, but execution risks and market dynamics will shape the next phase.
Questions in the middle?
- How will helium and CO2 market prices impact Blue Star’s commercial production economics?
- What is the timeline and scale for Phase 2 expansion beyond initial production at Pinon Canyon?
- How will Blue Star manage operational risks during the transition from development to commercial production?
