Grand Gulf Energy Ltd (ASX: GGE, OTCQB: GRGUF) ('Grand Gulf' or the 'Company') is pleased to provide an update on the potentially company-making second pure-play helium well, Jesse-2, in the Red Helium project.
Jesse-2 Operational Update
Jesse-2 is on schedule to spud 12 March 2023, with all long lead items purchased, a drilling rig contract secured and site construction complete, following the approval of the Drill Permit in early January1. The conductor rig was mobilised on 6 March 2023 to install the cellar and surface conductor. A pre-spud meeting with all contractors is scheduled for 8 March 2023 prior to rib mobilisation later this week. The rig mobilisation and rig-up are on schedule to support the 12 March spud date. Aztec Well Servicing, Co. (Aztec) has been contracted to drill the Jesse-2 well at the Red Helium project2. Aztec is based approximately 125 miles southeast of the Red Helium project area, in Aztec, New Mexico.
Aztec is the preferred contractor of GGE's Drilling Superintendent, Todd Gentles3. Mr Gentles has previously worked with Aztec, including this exact rig and crew with underbalance drilling and testing procedures, whilst drilling wells at the neighbouring Doe Canyon field.
Jesse-2 Location
Jesse-2 is located 1.5 miles east-south-east of the Jesse-1A discovery well and was selected as the best of three mature prioritised locations on the Jesse structure. The locations were derived from an extensive review of data from six historic wells and Jesse-1A including calibrated 2D seismic to target a structural high location on the Jesse feature to maximise the thickness of the gas pay zone. Based on analogue performance, the Jesse discovery has the potential to support in excess of 20 wells within the areal extent of the closure, given the >200-foot column intersected at Jesse-1A.
Jesse-2 Drilling Program
Jesse-2 will exclusively target the gas pay zone(s) to minimize the risk of water production, with the planned total well depth terminating at least 50 feet above the identified gas/water contact at Jesse-1A. The drilling program incorporates managed pressure drilling through the primary Leadville formation minimising formation damage. The program allows enhanced mud-gas returns and realtime monitoring of reservoir gas flow and gas compositions using mass spectrometry.
Jesse-2 Offtake Agreement
Helium Offtake partner Paradox Resources LLC (Paradox) is owner of the advanced Lisbon helium processing plant (Lisbon) located 20 miles north of the Red Helium Project. Jesse-2 is immediately adjacent to unutilised pipeline connected to the Lisbon helium plant. The Company has a Gas Sales & Processing Agreement (GSPA, Offtake) 5 with Paradox which includes the Jesse-2 well6. In the event of a successful well, the GSPA provides a path to monetization of the Company's second pure-play helium well, Jesse-2. The GPSA expansion continues a relationship with a proven helium refiner and seller with deep helium processing and marketing experience. The key terms include an 80/20 industry standard revenue split in favour of the producer (GGE) as well as standard tariffs for gathering, compression and processing.
The GSPA expansion represents recognition from Paradox of the significant potential of the Red Helium Project and the technical merits of the potentially company-making Jesse-2 well. Both Grand Gulf and Paradox are participating in ongoing discussions to identify further strategic business opportunities framed by a Strategic Alliance7, which includes GSPA expansion and further corporate synergies. Paradox owns over 100,000 net acres and operates over 150 wells in the Paradox Basin in the Four Corners Region of Utah, Colorado, New Mexico and Arizona. Paradox is operator of 570 miles of operated gas gathering lines (220 miles of which is wholly owned) with four compression stations that feed directly to the Lisbon Valley Gas Plant. The advanced Lisbon Valley Gas Plant is comprised of a 60 million cubic feet per day (mmcfd) treating plant with a 45 mmcfd cryogenic plant capable of liquefaction of 0.5 mmcfd of high purity 99.9995% (5 1/2 Nines) helium, that attracts premium pricing for advanced applications such as
semiconductor, medical, research, space and defense industries. The plant has capacity for another 0.6 mmcfd of purified 99.989% gaseous helium currently sold to multiple suppliers and direct to downstream retail consumers via Paradox's logistics arm comprising precisely engineered specialist tube trailers.
Contact:
Dane Lance
Email: info@grandgulfenergy.com
About Grand Gulf Energy
Grand Gulf Energy Ltd (ASX: GGE) is an independent exploration and production company, headquartered in Australia, with operations and exploration in North America. The Red Helium project is a pure-play helium exploration project, located in the Paradox Basin, Utah, in the prolific Four Corners region.
Competent Person's Statement
The information in this report is based on information compiled or reviewed by Mr Keith Martens, Technical Director of Grand Gulf. Mr Martens is a qualified oil and gas geologist/geophysicist with over 45 years of Australian, North American, and other international executive oil and gas experience in both onshore and offshore environments. He has extensive experience of oil and gas exploration, appraisal, strategy development and reserve/resource estimation. Mr Martens has a BSc. (Dual Major) in geology and geophysics from The University of British Columbia, Vancouver, Canada.
Forward Looking Statements
This release may contain forward-looking statements. These statements relate to the Company's expectations, beliefs, intentions or strategies regarding the future. These statements can be identified by the use of words like 'anticipate', 'believe', 'intend', 'estimate', 'expect', 'may', 'plan', 'project', 'will', 'should', 'seek' and similar words or expressions containing same. These forward-looking statements reflect the Company's views and assumptions with respect to future events as of the date of this release and are subject to a variety of unpredictable risks, uncertainties, and other unknowns. Actual and future results and trends could differ materially from those set forth in such statements due to various factors, many of which are beyond our ability to control or predict. These include, but are not limited to, risks or uncertainties associated with the discovery and development of oil, natural gas and helium reserves, cash flows and liquidity, business and financial strategy, budget, projections and operating results, oil and natural gas prices, amount, nature and timing of capital expenditures, including future development costs, availability and terms of capital and general economic and business conditions. Given these uncertainties, no one should place undue reliance on any forward-looking statements attributable to GGE, or any of its affiliates or persons acting on its behalf. Although every effort has been made to ensure this release sets forth a fair and accurate view, we do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
GRAND GULF ENERGY LIMITED 
