American Oil and Gas Reporter - November 2022 - 28

The U.S. Geological Survey provides the only real data, and it
tends to be restricted to the United States (Figure 1).
Some predictions have helium supplies becoming more
stable in six months. But the reality is that processing facilities
such as Amur in Russia seemingly have been burning down
every two months even before the Russia-Ukrainian war; maintenance
problems at BLM's Amarillo facility seem to be an ongoing
issue; and a recent fire destroying a facility in Kansas,
etc., demonstrate the delicate nature of supply of the element.
So how can the U.S. and Canadian independents/juniors take
advantage of helium?
Helium is unique in that it is generally never covered in
older oil and gas leases in terms of having to pay royalties to
mineral owners. Saskatchewan, the Bureau of Land Management,
and Utah (School and Institutional Trust Lands Administration
land only) have royalty agreements for helium that is recovered.
Kansas, Colorado, Montana, Texas and Oklahoma do not.
Helium is treated as a waste gas by those who extract it, and
in many cases, the landowner receives no royalty. In many
areas, this provides a unique opportunity for operators and their
partners to significant benefit. However, there is a growing
trend whereby operators provide the fee mineral landowner a
stake in the benefits of helium revenue. This allows all parties
to be in step in terms of recovering the product and benefiting
from the revenue received.
Focus Areas
Areas that are currently the focus of exploration, exploitation
and maybe actual production are Central Kansas, southeastern
Colorado, the Holbrook Basin in Arizona, the Colorado Plateau
and southeastern Saskatchewan. Areas such as the Texas Panhandle-Hugoton,
Otis-Albert (Ks.), Keyes Dome (Ok.), Harley
Dome (Ut.) and Big Piney-La Barge (Wy.) are either mature, at
the end of their productive lives, or controlled by one entity.
Helium accumulations are almost always structural due, in part,
to the small nature of the helium molecule, which quickly
migrates to the top of any trap.
For example, the helium play in Saskatchewan is heavily focused
on Cambrian lenticular sands that coincidently are draped
across localized structural highs. Of course, in this area helium
production has been found in shallower Ordovician and Devonian
rocks while targeting the Cambrian. Millions of acres have
been leased and hundreds of square miles of seismic are being
shot. This is reminiscent of an old-style conventional play.
Another example is the Las Animas County, Co., helium
play centered on the productive Model Dome. The concept is,
with confirmation from recent drilling, localized shallow structural
highs that may have at least 5% helium in the gas. The reservoir
is the Graneros or Lyons formation at a depth of less than 2,000
feet. It is underpressured, but it is associated with another
important resource: freshwater. The main company in the play
is Blue Star Helium Ltd., a small Australian firm that reminds
one of an old-time Vancouver junior. The play is promising.
Just to the north in the Las Animas Arch in Kiowa and
Cheyenne counties, Colorado helium production is associated
with the Pennsylvanian Morrow sandstone. Significant amounts
of modern 3-D seismic were shot for a previous hot play, the
Mississippian, which gives operators a cost-saving edge in
Drilling for American
Energy Independence!
With a fleet of high-spec AC & SCR land rigs, Latshaw Drilling is positioned
to meet our customers' requirements now and for the foreseeable future.
These capabilities derive their strength from our seasoned work force who
are the backbone of our company. We take pride in our men and women
who work hard every day to bring America closer to energy independence!
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28 THE AMERICAN OIL & GAS REPORTER
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American Oil and Gas Reporter - November 2022

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