Imperial Helium Corp. Announces Positive Independent Production Test Analysis of New Sub-Salt Zone and Change of Auditor
CALGARY, Alberta, March 09, 2022 (GLOBE NEWSWIRE) -- Imperial Helium Corp. (TSXV: IHC; OTCQB: IMPHF) (“IHC” or the “Company”), a growth-oriented company focused on commercializing our helium discovery in Alberta (the “Steveville Asset”), is pleased to announce positive results from an independent production test analysis by IHS Markit, of the newly identified Sub-Salt Zone (“SSZ”) in the Company’s IHC-Steveville-3 well (102/12-12-020-12W4).
The SSZ has a calculated absolute open flow (“AOF”) rate of 13.3 mmcf/d, and capability of sustaining production rates of 2.5 mmcf/d for three years before decline. The SSZ is below the Blow-Out Zone (“BOZ”) and each are found in both the IHC-Steveville-2 and IHC-Steveville-3 wells. The SSZ and BOZ are two distinct stacked reservoirs with different gas compositions (see table to left). The SSZ gas is significantly more valuable because it has 18.6% more Helium and because there is essentially no CO2; which means there are no expenses associated with removing the CO2 and putting the acid gas back into the ground (sequestration).
| Gas Composition of BOZ vs SSZ |
| | Blow-Out Zone |
| Hydrogen H2 | 0.02 % |
| Helium He | 0.43 % |
| Nitrogen N2 | 84.87 % |
| Carbon Dioxide CO2 | 9.84 % |
| Hydrogen Sulfide H2S | 0.00 % |
| Methane C1 | 4.84 % |
| | Sub-Salt Zone |
| Hydrogen H2 | 0.02 % |
| Helium He | 0.51 % |
| Nitrogen N2 | 93.20 % |
| Carbon Dioxide CO2 | 0.01% |
| Hydrogen Sulfide H2S | 0.00 % |
| Methane C1 | 6.27 % |
| | |
With production testing of the SSZ complete in IHC-Steveville-3, IHC will move up hole and commence a production test on the BOZ in IHC-Steveville-3, as soon as a service rig is available. The BOZ in IHC-Steveville-3 will undergo a planned 30-day production test consistent with the testing done on the SSZ and the BOZ in IHC-Steveville-2. In addition, we will conduct a high-flow rate test to confirm the capacity of the BOZ to produce at rates of 5-8mmcf/d as previously demonstrated by the pressure-transient production test of the BOZ in IHC-Steveville-2 last summer.
Independent Production Test Analysis of the Sub-Salt Zone
Fixed flow-rate production tests were designed in collaboration with IHS-Markit. For the SSZ, a low constant production rate of 2.35 mmcf/d using a 18/64 inch (7.14mm) choke for period of ten days was chosen to optimize data collection and our ability to observe changes in reservoir pressure. The subtle changes in reservoir pressure provide critical information on reservoir size, quality, and how a reservoir will perform when placed on production. After the flow-period, the reservoir was left undisturbed for 18 days (430 hours) to record the pressure build-up after the well had been shut-in. The results of IHS Markit’s pressure transient analysis from the SSZ in IHC-Steveville-3 are in-line with the Company’s expectations and demonstrated excellent characteristics that support future commercial development of that zone in IHC-Steveville-3. The SSZ has very good porosity (13.7%), good permeability (10.5mD), and the capability to drain over five square kilometres (two square miles) from the SSZ in this well alone. Given these results, the Company intends to production test the SSZ within IHC-Steveville-2.
The tables below provide a summary of IHS Markit’s independent characterization of the two reservoirs. IHC anticipates bringing both the BOZ and SSZ onto production from both the IHC-Steveville-2 and IHC-Steveville-3 wells. While completing the SSZ in IHC-Steveville-3, we were able to reduce the well-bore damage associated with the drilling process (also known as ‘skin’) to -2.7 (optimal is -4.0) using an acid stimulation technique. Given our success in IHC-Steveville-3, we will use the same approach on both the SSZ and BOZ when we re-enter IHC-Steveville-2, and hope to significantly improve the skin of +21 currently over the BOZ.
| Blow-Out Zone (IHC-Steveville-2) | |
| Helium concentration | 0.43% |
| AOF (Absolute Open Flow rate) (Skin is +21) | 22.6 mmcf/d |
| Sustain production rate at 15% draw down | 5-8 mmcf/d |
| Period of sustained production before decline | 4 years |
| Anticipated well life | 15-20 years |
| Porosity | 15% |
| Permeability | 60-80 mD |
| Reservoir Pressure (psia – pressure per square inch absolute) | 2433 |
| | |
| Sub-Salt Zone (IHC-Steveville-3) | |
| Helium concentration | 0.51% |
| AOF (Absolute Open Flow rate) (Skin is -2.7) | 13.3 mmcf/d |
| Sustain production rate at 15% draw down | 2.5 mmcf/d |
| Period of sustained production before decline | 3 years |
| Anticipated well life | 15 years |
| Porosity | 13.7 % |
| Permeability | 10.5 mD |
| Reservoir Pressure (psia) | 2424 |
| | |
David Johnson, President & CEO of IHC commented, “In combination, the BOZ and SSZ in IHC-Steveville-2 and IHC-Steveville-3 have demonstrated sufficient productive capacity to support our planned 10mmcf/d facility. Pending completion of production testing of the BOZ in IHC-Steveville-3, we anticipate the production potential from these two wells may warrant an increase to our planned facility size. The exact size of that facility will depend on any additional productive capacity that may arise from further stimulation and production testing of the BOZ and SSZ in IHC-Steveville-2.”
Change of Auditor
The Company also announced today that it has appointed KPMG LLP (“Successor Auditor”) as its auditor. At the request of the Company, DeVisserGray LLP resigned as the auditor of the Company, effective January 17, 2022, and the Board of Directors of the Company appointed the Successor Auditor as the Company's auditor, effective January 17, 2022, until the next Annual General Meeting of the Company.
About Imperial Helium Corp.
Imperial Helium Corp. is focused on the exploration and development of helium assets in North America, initially through the anticipated commercialization of its Steveville, Alberta helium discovery. With increasing helium supply shortfalls around the world, the Company is committed to becoming a supplier of helium to help meet the needs of the many critical industries which rely on this irreplaceable resource, including healthcare, electronics and semiconductors as well as aerospace and leak detection. Driven by Canadian geoscience and engineering expertise and supported by strategic alliances with key players in the helium and capital markets ecosystem, IHC intends to leverage its proprietary well database to support longer-term growth. IHC is based in Calgary, Alberta, and listed on the TSX Venture Exchange under the symbol “IHC”. To learn more about the Company and expand on the subject of helium, please visit www.imperialhelium.ca.
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Forward-Looking and Cautionary Statements
Certain information included in this press release constitutes forward-looking information under applicable securities legislation. Forward-looking information typically contains statements with words such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “estimate”, “propose”, “project”, “will” or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information in this press release may include, but is not limited to, statements concerning: drilling activities; discovery activities including re-discovering and capturing the Steveville blow-out; and the business plan of the Company, generally, including helium development and extraction. The forward-looking statements contained in this press release are based on certain key expectations and assumptions made by Imperial Helium. Although Imperial believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Imperial can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the helium industry in general (e.g., operational risks in development, exploration and production; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), constraint in the availability of services, commodity price and exchange rate fluctuations, the current COVID-19 pandemic, changes in legislation impacting the helium industry, adverse weather or break-up conditions and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures.
The forward-looking information contained in this press release is made as of the date hereof and Imperial undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws. The forward-looking information contained in this press release is expressly qualified by this cautionary statement.
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