Pipeline Online: Royal Helium to begin drilling

Saskatchewan’s Energy News

Brian Zinchuk is editor and owner of Pipeline Online. Articles are used with permission.

By Brian Zinchuk

Royal Helium to begin southeast Sask. drilling program at Ogema

SASKATOON – After punching holes near Climax, Sask., Royal Helium Ltd. is shifting its helium drilling program to southeast Saskatchewan.

On Oct. 26, Royal announced that licenses and permits have been received for its first helium well on the Ogema block which is scheduled to spud on Nov. 1.

Weyburn-based Panther Drilling’s Rig 4 is now mobilizing to Ogema-1, located approximately 80 kilometres west of Weyburn. Once Ogema-1 drilling is completed, the rig will move to Ogema-2, which currently being licensed, and permitted. While helium development has occurred in the Mankota area and throughout southwest Saskatchewan, Ogema is the first helium-specific drilling program to ever be conducted in southeast Saskatchewan. Royal said it has some of the highest historic helium gas shows tested in the province.

Royal said the completions plan in southwest Saskatchewan for Climax/Nazare is well underway with its engineering and completions group collaborating on the production plan for the Climax area. Royal dubbed the target formation “Nazare” this past summer.

Two additional production wells at Climax are being licensed and permitted with the specifics of these development wells to be determined by the completions program which will be announced once finalized.

President and CEO Andrew Davidson spoke to Pipeline Online on Oct. 26 by phone. He said recently they’ve been mostly dealing with laboratories, determining how they are going to do completions on their Climax wells. He said there will be “another week or so of debating between the various groups, the rock mechanics and frack experts. But the way it looks now, we don’t think it needs a full frack. It’s so naturally fractured, it may just need to be pressured up to make those natural fracs refracture, for lack of a better term.”

He said they’re approaching this the same as unlocking a large reservoir, “just looking for a solution to get it all. We’ve got the right people doing it. They’re doing the work on it. We’re pretty confident we’ll get it. That’s still a few weeks away, before we’re back there, doing it.”

Ogema first

In the southeast, they have 3D seismic at Ogema, and 2D at Bengough, in addition to an extensive aeromagnetic survey done through the region this past summer. Davidson said it was, “the same sort of seismic we had over at Climax, which was all 2D.

“That’s our recipe for how we identify these plays – a combination of aeromagnetic and seismic. It’s the exact same story, here.”

The drilling is at Ogema was meant to be this week, but Davidson said it’s been pouring rain there, so lease construction has been delayed.

“Everything’s ready to go. That Panther Rig has been fitted with a top drive,” he said. That, in turn, allows greater speed and pullback in drilling.

Same target, half a province away

Davidson said, “We are targeting the same zone that we have in Climax. You can trace it all the way over there.

“The offset to this specific well, has the second highest helium cut in Saskatchewan, at under 2.45 per cent,” Anderson said.

The original plan was to go to Bengough, but as they will be drilling in the PFRA pasture, there’s a few more permitting hurdles. Thus, there’s a change in plans, and two wells are going to be drilled near Ogema.

“Ogema took its spot. We’ve got our workflow lined up now for the rest of the year. It’ll be drill two at Ogema, then move back to Climax and drill two more there. Once we’re done that, we should have everything in place for Bengough,” he said.

“The government’s been good. We’re not having any issues. They’ve laid out the process, and now we’re just following them.

The two Bengough wells will likely take them to spring break-up.

Steve Halabura, vice president exploration for Royal, said in a release, “Our initial well at the Ogema project represents the culmination of years of geological and geophysical review. We are excited to begin drilling in southeast Saskatchewan, where we will be applying some of the novel geological information from our Nazare discovery in southwest Saskatchewan to the eastern portion of the province. For Climax, we are working closely with our third-party consultants and the data from Climax-4 and because of its size, are now looking beyond conventional completion toward a multiple vertical and horizontal well development program for Climax/Nazare.”

Commercialization

Davidson said, “So what’s going be happening in the interim? We’ll be into commercialization discussions, right? So we’ve got groups that want to offtake helium from us. So, we’ll be moving our plants to site at Climax, presumably and potentially Ogema, as well.

“Once we’re done drilling, we’ll move straight into commercialization,” he said, adding they’ll soon move in processors to Climax to start processing gas.

There are more suppliers than you think,” he said about helium processing facilities, such as small-scale mobile separators. “It’s not off the shelf, but not that far from it. All you need to do, really, is prove you have gas flow, for one; once you have the flow rates, the pressures, the composition of the gas, most of which we have, and the rest of which we’ll have when we’re done at Climax.”

“We think, on a test basis, we’ll be flowing helium by the end of the year. In terms of full-scale operations next year, early next year would be a good estimate,” Davidson said.

The provincial royalty rate for helium is 4.25 per cent off the sales price, he explained.

Team addition

Additionally, Royal announced the addition of Dr. Robert R. Stewart to the technical team. Stewart is a professor of geophysics at the University of Houston, where he holds the Cullen Chair in Exploration Geophysics and is also the Director of the Allied Geophysical Laboratories. Stewart holds a B.Sc. in math and physics from the University of Toronto and a Ph.D. in geophysics from the Massachusetts Institute of Technology (MIT). Prior to the University of Houston, Stewart held various roles with Chevron’s Oil Field Research Lab, ARCO and Veritas Software.

Davidson said, “The addition of Dr. Stewart to our technical team is a significant step towards the ongoing success of the company. His long track record in exploration geophysics will be crucial as we continue exploration efforts in Saskatchewan. The ability to efficiently pinpoint the Nazare formation from existing seismic will be critical to the ongoing development at Climax and surrounding project areas. Rob’s experience interpreting geophysics is second to none.”

Panther Drilling Rig 4, which drilled Royal Helium’s Climax-4 well, will be drilling a little closer to home, at Ogema, in November. Photo by Brian Zinchuk