ASX-listed exploration and production company Grand Gulf Energy (ASX:GGE) reports it has expanded its existing Gas Sales and Processing Agreement (GSPA) with privately held energy company Paradox Resources.
The newly expanded GSPA will now include the company’s Jesse-2 well, located at its Red Helium Project in Utah in the US, and represents recognition from Paradox of the ‘significant’ potential of the project and technical merits of the potentially company-making helium well.
The company notes that the GSPA expansion is the next-step in continuing its relationship with the proven helium refiner and seller that boasts deep helium processing and marketing experience.
Key terms under the GSPA include an 80:20 industry standard revenue split in favour of Grand Gulf Energy, as well as standard tariffs for gathering, compression and processing.
Addressing the offtake agreement, Grand Gulf Energy Managing Director Dane Lance says: “The expansion of the offtake agreement with Paradox continues the relationship with a proven helium refiner and seller with deep helium processing and marketing experience.
“The expansion of the offtake agreement with Paradox continues the relationship with a proven helium refiner and seller with deep helium processing and marketing experience”
Grand Gulf is well placed to capitalise on one of the world’s most critically scarce commodities with the ability to quickly monetise a commercial well with minimal time and cost.”
Paradox is the owner of the advanced Lisbon helium processing plant, located about 20 miles north of the Red Helium project and connected to existing pipelines within proximity to the Jesse-2 well, allowing for a potential path to monetisation of Grand Gulf’s second pure-play helium well.
The company says the plant is host to a liquefaction train capable of producing around 99.9995% purity helium, which is suitable for lucrative and premium-pricing semiconductor, defence and space industries.
In addition, the facility is regarded as 1 of only 8 helium liquefiers within the US, representing 7% of North American helium liquefaction capacity.
It is also well advanced in the permitting process to qualify for carbon capture tax credits under the US tax code.
Meanwhile, the recent Inflation Reduction Act has increased the value of carbon dioxide sequestered to $85 per metric tonne, making it a potential material revenue stream for the Red Helium project.
As of 11am AWST Grand Gulf Energy’s share price had increased by 7.99%.
Grand Gulf Energy is an ASX-listed, independent exploration and production company that is headquartered in Australia and holds operations within North America. The company’s Red Helium project represents a pure-play helium exploration project located in Utah’s Paradox Basin, within the prolific Four Corners region.
The project was acquired by Grand Gulf Energy in September 2021 and since then has accomplished many milestones, including a maiden prospective gross project un-risked P50 helium resource of 10.9 billion cubic feet of helium and the development of the Jesse discovery, which exceeded drill expectations and highlights.
Other energy assets included within Grand Gulf Energy’s exploration portfolio within the US include the Desiree Field in Louisiana and the DJ Basin in Colorado.
Images: Grand Gulf Energy Ltd
