Gold Hydrogen Ltd (ASX:GHY) is continuing to progress its Ramsay Project on the Yorke Peninsula of South Australia, at which recent exploration and drilling along with historical data have confirmed as a new energy and resource play prospective for natural hydrogen and helium.
The company is today set to commence exploration well testing operations at the site of the Ramsay 1 and Ramsay 2 exploration wells. These tests are pioneering for both natural hydrogen and helium in a non-petroleum system.
Ramsay 1 and Ramsay 2 wells were drilled late last year and Gold Hydrogen found natural hydrogen at up to 86% purity and helium at up to 6.8% of raw gas.
The objectives of the exploration well tests are to obtain more samples of natural hydrogen and helium for further specialist analysis in world-leading laboratories.
Secondary objectives of the well testing program are to extract both natural hydrogen and helium to surface and to obtain formation fluid samples for analysis.
Testing operations are expected to take most of March, with preliminary technical results from the overall testing of both the Ramsay 1 and Ramsay 2 exploration wells program expected by April, with further detailed laboratory analysis ongoing.
The data will provide a better understanding of the characteristics of the natural hydrogen and helium reservoirs, including an understanding of potential wellbore skin damage from drilling.
Gold Hydrogen managing director Neil McDonald said: “We have found both natural hydrogen and helium in our Ramsay 1 and 2 wells at world-class purities, and our prospective resource estimates indicate the potential for very large quantities.
“We know the gases are there and the start of exploration well testing operations is a good first step to the potential future commercialisation of both natural hydrogen and helium in this region.
“We look forward to obtaining more samples and extracting the gases to surface, which will be very valuable data and information for the future appraisal and further development of the project.”
“Large-scale potential”
Gold Hydrogen says the project has significant prospective resources with large-scale potential. The independent best estimate prospective resource for natural hydrogen on PEL 687 is 1.3 billion kilograms and for helium, the mean estimated prospective resource is 96 billion cubic feet (Bcf) over around 25% of the tenement.
The company highlights that “this is the start of a very exciting technical journey, and is not dissimilar to the eventual success of existing world-renowned oil and gas energy projects, which took time to reach their full potential”.
Results from the testing program will provide valuable information for future drilling and well completion designs, for the future pilot program, and longer-term commercialisation planning.
Meanwhile, planning continues on the broader 2024 work program, including a regional 2D seismic program and the drilling of additional wells.
First dedicated natural hydrogen and helium test
This well-testing program is the first dedicated natural hydrogen and helium well-test operation conducted in Australia and the company believes it is likely one of only a few in the world.
Gold Hydrogen draws comparison to oil and gas projects, including the early days of coal seam gas and shale industries. The exploration and completion techniques for those resources were developed and optimised over time, improving project economics and ultimately leading to major projects being developed.
The company anticipates a similar path forward for its natural hydrogen and helium resources, although the timeframe may be quicker as technologies developed for other gas resources may be applicable.
A view to commercialisation
Gold Hydrogen notes that there is very little data available for dedicated hydrogen wells anywhere in the world due to the lack of analogue wells. Accordingly, there is inherent uncertainty with regard to the expected outcomes of the Ramsay 1 and Ramsay 2 exploration well-testing program.
To the company’s knowledge, the only natural hydrogen field currently in production is in Mali, West Africa, where natural hydrogen production is used to power the small town of Bourakebougou. The natural hydrogen wells in Mali are reported to not have any decline in production and are continually regenerating and producing at the same rate.
Helium is extremely valuable and indicatively, longer-term bulk pricing is expected to approximate US$450 per thousand cubic feet.
Natural hydrogen has a high energy content, and extracting it even in small quantities may prove commercial for localised applications.
Further, given that helium was also found within both the Ramsay 1 and Ramsay 2 wells, being able to extract and process both gases in small quantities may provide potential short-term commercial and/or proof of concept opportunities to help progress the Ramsay Project.