Overview

  • Located at north end of prolific Las Animas Arch of SE Colorado
  • Low Risk Re-entry or well twinning opportunities
  • Inexpensive leasing costs
  • World-class Morrow rock quality (reserves recovered quickly w/ high NPV)
  • 4-5% Helium in Morrowan gas reservoirs insulated from natural gas pricing downside
  • Surrounded by multi-BCF Morrowan fluvial reservoirs detectable on 3D seismic
  • 1.5 BCF/well natural gas and He reserve potential. Valley trends point toward Project Area.
  • Drilling cost of $500K/well with potential production of 2-3 MMCFD natural gas (5% He)

Stratigraphic Column – Prospective Horizons

Typical Gas Analysis

COMPONENT Mole % GPM
HELIUM (HLM) 5.58%*
HYDROGEN (H2) 0.00%
NITROGEN (N2) 66.02%
CARBON DIOXIDE (C02) 0.76%
METHANE (C1) 21.25%
ETHANE (C2) 1.69% 0.433
PROPANE (C3) 1.43% 0.375
I GO-BUTANE (IC4) 0.25% 0.079
N-BUTANE (NC) 0.66% 0.198
ISO-PFNTANE (1C5) 0.23% 0.080
N-PENTANE (NC5) 0.34% 0.120
HEXANES (C6) 1.79% 0.739
TOTAL 100.00% 2.025

Gross Heating Value Per Cu. Ft. @60F & 14.65 PSIA DRV, 402, BTU*

*Expect 5% Helium and 400+ BTU gas in Morrow incised valley sandstones

Remarks: Morrow Formation

Re-Drill Opportunities

Completion Report

7/25/18
14 Hour Flow Test:
3 MMCFD on 1 1/4″ choke Increasing to 4.15 MMCFD

Seismically Definable Morrowan Valleys

Smaller Morrow channels on 3D seismic survey Western Central Kansas Uplift

3D Seismic-Based Expansion Opportunity

The 3D seismic program provides an opportunity for significant helium reserves upside in the project area.

The project immediately offsets Morrow gas production that averages 1.5 BCF/well, ranging up to 2.7 BCF

Helium 7-well Full Cycle Economics

  • Leasing, 3D seismic, drilling, 1.5 BCF/well
  • NPV = $34.2 MM
  • Cum Cash Flow = $55.2 MM
  • Spending = $6.6 MM

Features

3D Seismic

Required to define Morrowan Valleys

Drilling

5600’ drilling depth to test the seismic anomalies

Costs

$500K est. ~ 30sq.mi. leasing
(assumes $25/acre)
$800K est. ~30 sq.mi. 3D survey
($26K/mi. acquisition, permits & processing)

Completion

$475K Gas
$550K Oil
Approx. completed well cost

Unlocking Value

Multiple scenarios for the development & commercialization of our projects to ensure maximum value extraction for shareholders

Feed Gas to Producer

Selling feed gas to a major industrial gas company that would build-own-operate a liquid helium plant(s)

Production Joint-venture

Forming a JV with one of the major industrial gas companies to build-own-operate the plant(s) and sell the liquid helium output

Exit

Sale of the entire project(s) to an industrial gas company or strategic gas user seeking access to long-term helium resource

Production Development

Construct liquid helium plant(s) ourselves and sell bulk liquid helium to major industrial gas companies via long-term off take, or long-term helium supply

Summary

Market Opportunity

Declining supply – growing demand New technologies driving opportunity

Diverse Project Mix

Located in prolific and historic helium districts

Experienced Team

Industry professionals with a track record of success in the resource sector


American Helium Has A Clear Path To Redrill Proven Gas Producing Wells Containing Commercial He And Develop Exploration Drill Prospects