Imperial Helium (TSX-V: IHC)(OTC: IMPHF) CEO David Johnson on Offtakes, Production & Commencement of Drilling of IHC-Steveville-3 Well
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of Imperial Helium, Mr. David Johnson. David, how are you this morning?
David Johnson: I'm really well. Thanks. It's really great to be here.
Gerardo Del Real: It's great to have you back on, you announced last week the commencement of drilling on Steveville-3 Well, which is an important well, I would love for you to give us an overview of the process. I understand it'll take roughly about 20 to 22 days given the Christmas break, but can you give us an overview here of the drilling, what you're hoping to accomplish and when we'll know if you did so or not?
David Johnson: Yeah. Excellent question. We're really excited about the Steveville-3 Well. The reason we're excited about it is that this well will be our second producing well, so the first well that we drilled the Steveville, the Steveville-2 rather, will be our first producing well, and this is our second producing well, further, this well is going down on the structure on high, and it is twinning a well that was previously drilled in 1974. So we have modern logs, we've compared those logs to SteveVille-2, the well that we drilled that will be a producer and they're a dead match. So we have very high hopes for this well that it will also be a dead match because it is literally just a few hundred meters offset. And so it will become a producing well for us as well. But further than that, we've identified a zone immediately adjacent to our producing interval, the blowout zone in Steveville-2, and we'll be testing that one first.
And that will be the first test that we'll do on this well, so we commenced the well on December 6th and we have drilled down and set intermediate casing. And we're just completing that process now, everything's gone exceptionally well.
Then we'll commence drilling on the 27th and we'll finish drilling the hole and take it down to completion. After that, we'll do our first production test. Now the production test on this new zone will take approximately 30 days, about 10 days of flow time, and about 20 days of buildup time afterwards. And that's how we evaluate the size and aerial extent of the reservoir. Then the second test that we'll do, will be on the blowout zone itself, which is the producing interval. And we'll test that zone once again with a 10 day test and a 20 day buildup afterwards. So we can expect results of the first production test to come out to the market probably in the first week of February and results of the second test to come out, probably in the first week of March. And that's where we're at. So really exciting about the well.
Gerardo Del Real: No, listen. And it sounds like you're really ramping up the news flow. You have results that you're expecting here and news flow. It sounds like for January, February, March, you're looking to bring the Steveville-2 Well online by the end of 2022. And I understand you're in the process of securing potentially an offtake agreement, which of course would be a critical milestone for Imperial helium. Can we talk about the timeline for that, in a perfect world? Of course.
David Johnson: Well, in a perfect world, we've been trying to get this done before the end of the year, and there's still hope of that. We are working through it with our partner Uniper, and we'll see if we can get to an LOI in that timeframe, if not, it may go into the first or second week into January. So that's where the LOI is right now. You mentioned something about the first producing well, and I want to just clarify that point, with success the second well, Steveville-3 will be the second producing well, the first well had flow rates of five to 10 million cubic feet a day, which could be sustained for over three years. We're anticipating the second well will be the same. And so we plan to bring both Wells on stream and produce at a rate of 10 million cubic feet a day after startup period at the end of 2022. So we're looking towards first commercial production towards the end of 2022. So probably about a year from now.
Gerardo Del Real: And when you talk about commercial production, David, walk me through the field life is this, is this a 10 year, 15 year field life that you're looking at?
David Johnson: Normally this would be around a 10 or 15 year field life. A lot of it depends on what happens with the production test of the second zone, because the production test of the second zone could significantly increase our reserves. And if it increases our reserves, then it could potentially increase our production rate and it could increase the length of the field. Now the normal length of field would be about 15 years. That would be approximately three years study production at 10 million cubic feet per day, and then a decline of around 15% per year after that moving forward.
Gerardo Del Real: I know that you recently updated the corporate presentation. I want to make sure that we provide a link to that. It's got a lot of new maps, a lot of new details. I thought it was really well done. Anything else to add to that, David, before I let you go?
David Johnson: Yeah. We've talked about new opportunities and we're excited about the opportunities that are out there. People will see on the map where the Steveville field is and what it looks like. They'll also see a yellow outline that defines the area of the block and they'll see other potential opportunities on the block. We recognize those as SteveVille leads and they're part of what we're looking to go after. In addition to that, there are other resources which we're very keen to be chasing and moving forward and hope to be acquiring in the new year.
Gerardo Del Real: David, thank you for the update. Have a great Christmas great New Year. Great holiday if we don't chat between now and then though, it sounds like there's a potential to have a conversation if some of the things you have in the works materialize. Thank you again for the update.
David Johnson: Thank you so much. It's been a pleasure speaking with you.Click here to see more from Imperial Helium Corp.