Grand Gulf Energy Secures Permit for Jesse-3 Well Drilling in Red Helium Project
GRAND GULF ENERGY LIMITED (GGE) Share Update August 2024 Monday 5th
Grand Gulf Energy Secures Drill Permit for Red Helium Project
Grand Gulf Energy Ltd (ASX:GGE) has announced that it has received all necessary governmental approvals to proceed with the drilling of the Jesse-3 well in its Red Helium project located in Utah.
Instant Summary:
- Approval received from Utah Division of Oil, Gas and Mining (UDOGM) for Jesse-3 well.
- Jesse-3 will test deeper pay zones below the Leadville primary target.
- The well targets a structural high and reservoir with proven gas and reservoir quality.
- The project aims to unlock significant helium potential.
Permit Approval and Project Details
Grand Gulf Energy Ltd (ASX:GGE) has secured the Application for Permit to Drill (APD) for the Jesse-3 well from the Utah Division of Oil, Gas and Mining (UDOGM). This approval marks a significant milestone for the Red Helium project, allowing the company to proceed with drilling operations.
The Jesse-3 well is designed to test deeper pay zones below the primary Leadville target. The well will be cased and perforated across the entire basinal stratigraphic section, which could add substantial helium upside to the already identified targets in the Mississippian Leadville dolomite and Devonian McCracken sandstone.
Technical and Geological Insights
The Jesse-3 well is strategically positioned near the historic Redd-1 well, which has proven gas in the Leadville formation. The geological prognosis indicates that the top of the Leadville formation at Jesse-3 will be 40 feet higher than at the Redd-1 well and 70 feet higher than the Jesse-1A discovery well. This positioning is expected to enhance the potential for gas discovery.
In addition to the Jesse-3 well, Grand Gulf Energy is also updating the well design for the Earp-1 location. This update includes plans to deepen the well to test deeper pay zones below the Leadville primary target, further increasing the project's potential.
Historical Context and Future Plans
The selected location for Jesse-3 is a twin of the historical Redd-1 well, targeting a structural high with proven gas presence. The well is expected to intersect a gross gas column of up to 1,100 feet, extending to the granitic basement, which could significantly enhance the project's helium resources.
The Earp-1 well, another key component of the project, is positioned 4,800 feet from the Gulf Unit-2 well and structurally 100 feet higher. Earp-1 targets a closure in the horstal region of the Red Helium project, with proven gas in the Leadville and McCracken formations.
Grand Gulf Energy is also in discussions regarding a potential farm-out of the Red Helium Project. This could secure funding for further drilling in exchange for an interest in the project. However, these discussions are ongoing, and there is no guarantee of a finalized agreement.
The approval of the Jesse-3 well drilling permit is a positive development for Grand Gulf Energy. It allows the company to advance its Red Helium project, potentially unlocking significant helium resources. This could positively impact the company's stock as investors anticipate successful drilling outcomes and increased helium production.
Investor Reaction:
Analysts are likely to view this development favorably, as it demonstrates regulatory progress and the potential for increased helium resources. However, the actual impact on investor sentiment will depend on the success of the drilling operations and subsequent resource estimates.
Conclusion:
Investors should closely monitor the progress of the Jesse-3 well drilling and any updates on the potential farm-out discussions. Successful drilling outcomes could significantly enhance the value of the Red Helium project and positively impact Grand Gulf Energy's stock performance.