First Helium Inc. (“First Helium” or the “Company”) announced plans to drill two complementary vertical Leduc oil targets at its Worsley property. The program will include drilling two strategic targets: the Company's proven undeveloped ("PUD") location at 7-30, which has been assigned proved plus probable undeveloped reserves of 196,700 barrels2 by Sproule Associates Limited ("Sproule")1, the Company's independent evaluator, and the recently identified 7-15 Leduc anomaly. The Company has initiated licensing for both locations and intends to optimize drilling costs by executing a two-well drilling program in succession.
"Given our focus on near-term cash flow opportunities, we are excited to be proceeding with a two-well program targeting proven undeveloped oil reserves at our 7-30 location and exploring the large Leduc anomaly, 7-15, which is approximately five times the areal extent of our successful 1-30 light oil pool discovery," said Ed Bereznicki, President & CEO of First Helium. "This strategic approach allows us to efficiently develop both a proven undeveloped oil opportunity and potentially make a significant discovery at a high-impact exploration oil target while maintaining operational efficiency," added Mr. Bereznicki.
7-15 Leduc Anomaly
The 7-15 well will target a large structure in the Leduc Formation that is on trend with and approximately 5X greater in areal extent than the Company’s initial 1-30 Leduc oil pool discovery. Upon completion, the 1-30 well flowed 419 barrels per day (“bbl/d”) of 35-degree API light oil from the Leduc Formation over a test period of 72 hours on a minimal drawdown. Given its premium light oil pricing, attractive vertical well drill costs and lower initial royalty rates, the 1-30 well paid out in less than 4 months.
7-30 PUD Location
The PUD 7-30 well directly offsets the previously discussed 1-30 well. The 7-30 location was identified using the same Seismic interpretation technique as used for the previously successfully drilled offset wells 1-30, and 4-29. Together, the successful 1-30 and 4-29 Leduc oil wells have produced 113,000 barrels of light oil and generated in excess of $13 million in revenue and $8 million in cash flow to date.
Worsley Leduc Formation – 12 Primary Targets
In addition to the 7-30 and the 7-15 location on the Leduc Anomaly, the Company has identified 10 further Leduc locations based on the same interpretation over existing proprietary 3D seismic (See Figure 1). Through the 1-30 and 4-29 drilling success, the company has achieved a direct correlation of its Leduc seismic interpretation. Continued success through drilling the 7-30 PUD well, and 7-15 will result in an immediate low risk 10 well scalable project.
The vertical Leduc play provides a tremendous opportunity for potential growth of the Company’s oil production, all located on existing (100 per cent) Company held lands. Given the large potential opportunity of the Worsley project, the Company will continue to explore potential partnerships to accelerate the development of its rich asset base.
Notes:
(1) Prepared by Sproule Associates Limited (“Sproule”), independent qualified reserves evaluator, in accordance with COGE Handbook.
(2) Gross Proved plus Probable Undeveloped reserves, per Sproule, Evaluation of the P&NG Reserves of First Helium Inc. in the Beaton Area of Alberta (as of March 31, 2023). See First Helium’s SEDAR+ profile at www.sedarplus.ca.
