Big Star closes helium lease acquisition

IT has been three months since ASX-minnow Big Star Energy, formerly known as Antares, acquired new oil and gas acreage in the onshore US, and today the company has followed up that announcement with a second acquisition, this time focused on helium.
Big Star closes helium lease acquisition Big Star closes helium lease acquisition Big Star closes helium lease acquisition Big Star closes helium lease acquisition Big Star closes helium lease acquisition

Paul Hunt

Deputy Editor: Energy & Commodities

Paul Hunt

The company told the market it had acquired 1,800 gross acres dubbed the ‘Enterprise prospect' situated in the Four Corners States area in North America.

Big Star believes it is a ‘first-mover' in the region and has not announced further details on the location of its prospect.

The field is updip and within 15 miles (24km) of another field that produced helium concentrations between 5% and 10%.

Big Star has rights over the lease for an initial five year term, with an option to renew for a further five years thereafter.

The company used existing gravity and aero-magnetics data along with target mapping of historical studies to identify the Enterprise prospect.

Helium is an irreplaceable element with multiple applications across cryogenics, semi-conductor manufacturing, fibre optics and rocket launchers, and is classified by the US as a strategic resource.

Big Star managing director Joanne Kendrick said a helium-focussed strategy had the potential to "transform the company" and a successful discovery could be brought into production within six months.

"The commodity has seen three supply shocks in the last decade resulting in helium's end users being rationed as demand outstrips supply. Helium price is now 100 times greater than the hydrocarbon gas price in the USA," Kendrick said.

"Onshore USA is a great location for helium exploration with a long history of high concentration helium production going back to the 1920s and a well-developed supply chain and market."

Big Star hopes to drill Enterprise prospect in the first quarter of next year.

The acquisition of the helium acreage follows an earlier move by the company to pick up over 5,200 acres of real estate, known as Percy Creek, in Wyoming with around 75 million barrels of prospective resources.

The small-cap is looking has been approached by other operators looking to farm into the Percy Creek prospect.

At the end of June Big Star has A$450,000 cash in the bank. In July it received $330,000 from a recent capital raise.

Big Star was up 20% this morning at 0.6 cents per share. It has a market cap of A$2.8 million.