The following is a transcription of the above video, and The Market Online has edited it for clarity.
Our next company is Pulsar Helium Inc. (TSXV: PLSR), a company dedicated to defining and developing primary helium assets.
President and CEO Thomas Abraham-James joined us to discuss the company’s recent discovery and outlook for the remainder of the year.
TMO: Let’s start from the beginning when the historic discovery of a helium reservoir occurred in 2011, can you walk us through the background of Pulsar Helium and how you came to acquire this project and also highlights of this initial discovery?
Abraham-James: I think it’s quite a fun story. It was a discovery that was made by chance. So back then it was 2011. We were not involved at that time but, there was a mineral explorer. They’re out looking for nickel and copper. And then with one of their drill holes they got down to a certain depth, 1,800 feet and unexpectedly they hit gas.
I can only think that at that time, it must have been terrifying for them. And it was under high pressure. It was really ripping out of the ground, and they were all very concerned that it was combustible and that the drill rig was going to blow up. So, one brave soul went and got a number of different samples of the gas and sent them off to two different laboratories. They came back, thankfully, saying that it was non flammable, but buried in the analysis there was reporting both of them that there was 10.5 per cent helium. It was extremely high grade.
They then went and sealed off the hole. It had been open for four days, and so really ripping that whole time. They managed to cement it up, close it down, and then they went about their business. We were made aware of this, and it was only about that time, just after that, a global helium shortage became evident.
That was about a decade ago. So, we became aware of this and then we came in and secured the mineral rights. A bit of a lengthy process because Minnesota has no history of oil and gas, but we were successful. And that formed the backbone of what is now Pulsar Helium and for us turning that initial discovery into really trying to realize its full potential.
TMO: I remember that shortage very clearly. Now, you drilled an appraisal well in February of last year. What was the reason behind that decision and what were the results?
Abraham-James: We drilled the appraisal well, it was actually February of this year. And what we were trying to do was just replicate that original discovery, so quite a conservative approach.
Prior to that, we did a lot of the typical lead-up activities. Acquiring geophysics, it’s a bit unusual because the discovery being made, and it’s a bit like the cart is before the horse. Typically, you have all the lead-up data and then you drill it. For this one, it’d been discovered, but without anything else. So, behind the scenes, we acquired all that. We then went and replicated the drill hole. We drilled about 15 metres off laterally. And I guess you could see it as a proof of concept. The hole hit the gas and it’s flowed up to surface.
We just announced last week that we then have the sort of ancillary data, which is saying that yes, up there, the gas flowed, not associated with any water, that the helium content is between 8.7 per cent and 14.5 per cent. Confirming that high grade nature and that we’re getting a positive flow up to surface of 821,000 cubic feet per day. So really, what does all that mean?
It means that it’s very high concentration helium discovery that’s roaring to surface. And you know, from what we can see with all the other listed primary helium companies, that this is really one of the top helium holes that’s ever been drilled.
It gives us the level of comfort that we need that we’re definitely onto something. The first mover in Minnesota, and now it’s “get cracking with the work program” to further it forward. We’ve got a good sort of belief from all the data that we’ve got – just the tip of the iceberg – that the helium-bearing zone is likely to extend deeper and then also laterally. So, it’s a very exciting time.
TMO: Absolutely. It definitely does sound exciting. You touched on it a little bit, but since February, can you tell investors anything else Pulsar has been doing?
Abraham-James: So there’s been quite a lot of activity. We’ve had the State of Minnesota, perhaps most importantly, on the back of the work that we’ve been doing. They’ve put forward and have now put into law new helium legislation, which is just fantastic.
That gives us the certainty that we need to be able to move forward. With that, the legislation allows for the leasing of state leases for helium. So we’ve put in an application for all the additional areas of interest on top of what we already have.
Then with the flow testing that we just touched upon, we also did a pressure testing as well. What that really tells you is, OK, you’ve got the gas coming out the ground, great, but what is the rate of pressure?
We’re seeing pressure down at the bottom of the hole, we’re getting up to about 162 PSI. What does that mean? That means it’s sort of like four or five times the pressure of a car tire. To put it into perspective, it’s quite high. You wouldn’t want to overinflate your tire by five times. You would probably end in a bit of a mess.
And when we closed off the hole and stopped it from flowing, that pressure built up very quickly as well, up to 70 per cent return in the first hour. So, what does that mean? That means that there’s probably quite a volume of gas present in order for that pressure to build up again so quickly.
And then multiple other down-hole tests that we do, vertical seismic profile, optical televiewer. I won’t bore you stiff with all that, but really it just gives us all that real critical sort of minutia of detail, which is now all being sent to a resource estimator, a group called Sproule, and they are now updating the resource.
And with any luck, we should have that updated resource next month.
TMO: Let’s actually talk about your recent test results from your Topaz project. Can you walk us through those results and what they mean for the company?
Abraham-James: Sure. The big one is that the gas flowing up to surface without any form of stimulation. So that’s really good, that was a big positive. That getting that good flow rate was also very comforting. And then that the data suggesting, so the seismic plus data we have from the well, that the helium-bearing zone goes down deeper.
From a planning point of view, we’re looking at deepening that hole to go through the entire area of interest. I have to emphasize that what we did was I guess, quite conservative.
We just replicated the original discovery. So now that that was successful now really, we have the confidence to go and do that additional work. And so, the pressure buildup was very pleasing to see. So really it was about three weeks in the field gathering all that data. And I guess extremely pleasing.
TMO: Thomas, what are the next steps for Pulsar Helium? What can investors expect to see for the remainder of the year?
Abraham-James: It’s already been quite hectic, and I think it’s only going to increase, to be honest. So, we have a 2D seismic survey, which is about to get underway. We have the resource estimate, which will be coming out hopefully next month in July. We’re starting now the planning and preparation for deepening the hole that we just drilled, and then also some additional step-out wells.
Then there’s ongoing engineering studies and then all that will culminate a bit later where we start to look at the economic scenarios for what we’ve discovered. And then being hopefully, before the end of this year, being able to release to the market what those economic scenarios look like and start for the first time to talk about project economics.
So really, I guess you could consider this the completion of phase one and now that we’ve de-risked it with a successful hole, now we go full-on with the other activities. And so, it’s not much sleep coming up.
You can follow Pulsar Helium Inc. on the Venture Exchange under the symbol PLSR.V or head to its website at pulsarhelium.com for more information.
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