One of the largest helium leaseholders in Canada has identified seven drill targets for primary helium production at its Climax property in southwest Saskatchewan.
Royal Helium Ltd. has over 300,000 acres of prospective helium land in southwest and south-central Saskatchewan.
The company’s leaseholds in the Climax area represent about a quarter of its total land holdings and it has been the initial focus of exploration.
“We're very excited about what we saw,” Royal Helium President and CEO Andrew Davidson said. “We found there was a pretty strong correlation between what we expected to see and what we actually saw, which in the exploration phase is all you can hope for. … So we're very pleased and pretty excited to move forward down there.”
The company completed geotechnical studies in early 2019 that focused on known fields and formations in Saskatchewan where primary helium is currently produced or was previously produced. This assessment used existing helium well data along with seismic information, government and geological data.
In June the company purchased 77.6 line-kilometres of 2D seismic data from the Climax land holdings and then contracted the RPS Group in Calgary to reprocess and evaluate this data.
The assessment identified deeper basement structures underneath the Climax land with approximately 3,094 hectares of four-way structural closure, which is the ideal structural formations to trap helium formed in the Precambrian basement.
“The approach we've been using is essentially reprocessing existing 2D seismic lines,” he explained. “So this is trade data that we have to acquire from the person who actually shot the data and owned it, and then we reprocessed it, looking generally deeper than they looked before, because the helium information is down near the basement.”
These findings are promising, but he emphasized that Royal Helium will only have a clear idea of the volume of helium in this large four-way structural closure after wells have been drilled.
“There's no straight line between the area of the closure and the amount of gas we would expect to extract, and we won't be able to provide any commentary on that until we actually drill a well and do gas analysis on what's down there,” he said. “What it implies is that helium is present down there.”
The company has no firm timeline for starting a drilling program, because it wants to continue with the same exploration program at its other land holdings in southwest Saskatchewan. It is also considering doing another type of exploration at the Climax leaseholds to determine the full extent of the four-way structural closure.
“There is a lot of risk in drilling,” he noted. “It's a costly venture and to the extent that you can de-risk it to the maximum extent possible, that's what we're in the business of doing. And with any drill program we would want to drill multiple wells, not a single well program. That's why we want to continue with this exploration approach in the Swift Current region and Cadillac and Shaunavon and Val Marie, so that we can approach these with as many drill targets as possible and drill as many wells as possible in multiple regions at the same time.”
They are hoping to have a roll-out date for drilling in all these project areas in 2020. The use of 2D seismic data to get a better understanding of the subsurface geology and the formations where helium might be trapped worked very well for their land holdings in the Climax area.
“It's all repeatable, and our plan, is to take the same approach and essentially carbon copy it over the other project areas,” he said.
The company’s initial geological and seismic data review of its land holdings in the Swift Current, Cadillac, Val Marie and Shaunavon areas and other land around Climax already indicated similar basement formations and structural traps for helium.
“If the resource is there in scale, like we think it is, it becomes a matter of doing a processing plant down in that region, and that's a whole other level of capital investment and employment opportunity,” he said. “So it could be quite large for the area, but we have to go through a number of steps before we can speak to that with any level of confidence.”
Royal Helium’s goal is to become a leading North American helium producer and it wants to focus on primary helium found in Saskatchewan.
“Most helium now is extracted as a by-product of natural gas,” Davidson said. “We're targeting helium as a standalone product, which is somewhat unique in North America. What it means is it's a bit of a cost advantage to us, in that when there's methane associated with it, there's additional processing cost in separating that methane out. With ours there should be no methane in our production. So it just makes it cheaper to process.”
The company decided to focus its exploration activities on Saskatchewan for several reasons. There has been small-scale helium production in the province since the 1960s, although larger scale exploration efforts have only started in recent years.
There are favourable conditions for finding primary helium in the province, because Saskatchewan has some of the world’s largest concentrations of uranium, and helium is created through the natural decay of radioactive elements such as uranium and thorium. In southern Saskatchewan the geological conditions created four-way structural closures that might trap helium.
“So I think Saskatchewan is poised to be a world leader in terms of helium production, which is one of the principal reasons we're focused here,” he said. “There are other areas in North America as well, but we are here and we're focused here and we think that makes a lot of sense for our company.”