HyTerra has kicked off production testing at its McCoy-1 well in Kansas, marking a pivotal shift from exploration to appraisal. The company also raised over A$6 million to fund drilling and growth, while expanding its drilling plans with a renewed permit for Larson 1-14.
- McCoy-1 production testing commenced in July
- Larson 1-14 drilling permit renewed in Rift Play
- University of Colorado confirms hydrogen generation in rock samples
- Raised approximately A$6.02 million via entitlement and shortfall offers
- Selected for US Air Force Chimaera Fund hydrogen initiative
McCoy-1 Production Testing Marks Operational Milestone
HyTerra (ASX:HYT) has transitioned from exploration to appraisal with the commencement of production testing at its McCoy-1 well, located in the Nemaha Project, Kansas. Testing began in mid-July following extensive preparations throughout the June quarter. This marks the deepest well drilled by the company to date and a critical step in assessing sustained hydrogen and helium flow rates.
The McCoy-1 well, drilled to 1,695 metres, penetrated both sedimentary and Precambrian basement rocks. Early swabbing during the 2025 clean-up phase revealed hydrogen concentrations up to 96% and helium up to 5%, underscoring the potential for dual gas commercialisation. The current testing program aims to independently evaluate two target zones for steady-state flow, gas composition, reservoir pressure, and formation fluids, which will inform future drilling and completion strategies.
Larson 1-14 Drilling Candidate Secures Permit Renewal
Alongside McCoy-1, HyTerra has advanced its Rift Play portfolio by selecting Larson 1-14 as the highest-ranked drilling candidate. Situated approximately 75 kilometres northwest of McCoy-1, the well targets both sedimentary and basement sections above the Midcontinent Rift, a geological feature known for iron-rich rocks conducive to hydrogen generation through serpentinisation.
The Kansas Corporation Commission has renewed the permit to drill Larson 1-14, with HyTerra progressing regulatory and operational preparations. Timing for drilling remains contingent on securing sufficient funding and operational readiness, suggesting this well could become a key focus in upcoming quarters.
University of Colorado Collaboration Validates Hydrogen Generation
HyTerra’s partnership with the University of Colorado Boulder continues to yield promising scientific insights. Preliminary laboratory analyses demonstrated hydrogen generation from rock samples taken from the Midcontinent Rift. These findings bolster HyTerra’s proprietary "Hydrogen Must Haves" exploration framework, refining target selection and leasing strategies. The research program is ongoing, potentially enhancing the company’s geological models and drilling designs.
Capital Raising Strengthens Financial Position
To finance its expanding operations, HyTerra raised approximately A$4.07 million through a non-renounceable entitlement offer during the quarter, issuing nearly 290 million new shares at 1.4 cents each. This was supplemented by a further A$1.95 million secured under a shortfall offer before quarter-end, bringing total funds raised and committed to about A$6.02 million. These proceeds are earmarked for McCoy-1 testing, drilling preparations, growth initiatives, and working capital.
At quarter-end, HyTerra held A$4.16 million in cash and maintained nearly 2 billion shares on issue, alongside significant unlisted options and performance rights. The company’s cash runway is estimated at around 3.65 quarters based on current expenditure rates.
Global Recognition and Strategic Engagements
HyTerra’s profile gained a boost through selection as a primary participant in the Chimaera Fund’s US Air Force initiative, which explores geologic hydrogen’s role in enhancing energy resilience at critical military installations. This endorsement aligns with a Congressional mandate for near-continuous energy availability at US bases by 2030.
Further afield, HyTerra presented at a Korean government-supported hydrogen innovation conference, strengthening ties within one of Asia’s most advanced hydrogen markets. These engagements complement the company’s strategic plan to build a diversified portfolio of geologic hydrogen projects across multiple jurisdictions.
Bottom Line?
HyTerra’s move from exploration to testing at McCoy-1, backed by fresh capital and global partnerships, sets the stage for critical appraisal results that will shape its commercial hydrogen ambitions.
Questions in the middle?
- Will McCoy-1 sustain commercial hydrogen and helium flow rates during testing?
- How soon can HyTerra advance drilling at Larson 1-14 given funding and operational hurdles?
- What impact will ongoing University of Colorado research have on future project targeting and success?