Under the farm-in terms, He Nuclear will contribute half of a $10 million exploration budget to be spent on additional pre-drilling seismic and an exploration well in each of the Mt Kitty and Magee prospects, located in EP 125 and EP 82, respectively.

In addition to the two prospects, He Nuclear will also earn a 25% stake in a small portion of the surrounding acreage, according to Central.

Both exploration wells are designed to target the Heavitree Quartzite formation, which was drilled once before with the Magee-1 well in 1992.

Drilled by Pacific Oil and Gas to a total depth of 2400m, Magee-1 not only encountered gaseous hydrocarbons with wet fractions, but more significantly a 6% concentration of helium, which Central said was about 20 times the minimum required for commercial extraction.

“The excellent sealing characteristics of the Gillen Salt Member [which overlies the Heavitree] were evidenced by the entrapment of Helium, the second-most mobile element in the periodic table,” Central managing director John Heugh said.

“The Heavitree Quartzite at the Magee location had a porosity of over 9% but was too thin to provide substantial and commercial pay. Further to the north and to the west, the Heavitree is expected to be much thicker with a higher porosity.”

If both prospects live up to expectations, Heugh said the combined conventional hydrocarbon resources could support a 10,000 barrel per day gas-to-liquids plant for over 25 years.