Six Wells Confirm Strong Helium Flows, Blue Star Targets H2 2025 Production

Galactica Drilling Campaign Delivers Strong Results

Blue Star Helium Limited (ASX, BNL) has announced the successful completion of its 2025 Galactica drilling program in Las Animas County, Colorado. The campaign, which comprised six development wells targeting the Lyons Formation, consistently encountered promising helium concentrations and flow rates. These results build on prior discoveries and confirm the project's near-term production potential.

Each well demonstrated encouraging helium yields, with flow testing revealing natural rates ranging from approximately 150 to over 250 thousand cubic feet per day (Mcfd), and engineering analyses projecting stabilized production rates up to 615 Mcfd under optimized conditions. This consistency across multiple wells underscores the robustness of the Galactica/Pegasus helium resource.

Transitioning to Commercial Production

Following the drilling success, Blue Star is now advancing the Galactica project towards initial commercial production, targeting the second half of 2025. The company plans to tie in the newly drilled wells to the Pinon Canyon Plant, a helium and carbon dioxide processing facility recently approved for construction in Las Animas County.

Key activities underway include finalizing the plant design based on integrated gas flow data, commencing civil works at the approved site, mobilizing equipment, and preparing for well tie-ins and compression. Once commissioned, the facility will provide early cash flow and operational data critical for optimizing full-field development.

Engineering Support and Resource Scalability

Independent engineering studies have played a pivotal role in validating the project’s development plans. By integrating flow test data from the 2025 wells with previous discovery wells, the studies have modeled maximum stabilized flow rates and reservoir permeabilities. These analyses support a phased development approach that balances production optimization with reservoir pressure maintenance to maximize recovery.

Moreover, the joint venture has identified additional drilling locations within the Galactica-Pegasus area, including infill and expansion targets in both the Upper and Lower Lyons formations. This suggests significant upside potential for resource scalability beyond the initial production phase.

CO2 Monetisation and Marketing Strategy

Alongside helium, the project holds substantial carbon dioxide resources. Blue Star and its joint venture partner Helium One Global Ltd are progressing plans to integrate CO2 purification and liquefaction capabilities at the Pinon Canyon Plant. This will enable commercialisation of CO2 via trailer transport, adding a complementary revenue stream.

On the marketing front, the joint venture is actively developing offtake agreements and supply chain partnerships for both liquid and gaseous helium. The strategy aims to secure long-term contracts with buyers prioritizing supply continuity and price stability, positioning the project to navigate helium market cycles effectively.

Looking Ahead

Blue Star’s successful 2025 drilling campaign and imminent commercial production mark a significant milestone in its evolution as a helium producer. The company’s phased development strategy, supported by robust engineering data and a clear marketing plan, sets a strong foundation for scaling operations and monetising both helium and CO2 resources.

Investors and industry watchers will be keenly observing the commissioning progress at Pinon Canyon and subsequent production ramp-up, which will provide critical insights into the project’s operational performance and cash flow generation potential.