Unexpected Helium Concentrations Breathe New Life into Eastern Kansas Resource Play
HyTerra Limited (ASX: HYT) has announced a significant discovery at its Blythe 13-20 well in Kansas, with unexpectedly high helium concentrations reaching 4.4% in mud gas samples – a level not previously observed in this part of the state. The discovery extends the helium play in Eastern Kansas from the Sue Duroche 3 area significantly, while also recording hydrogen concentration that peaked at 16.5%.
The Blythe 13-20 well was drilled to a total depth of 5,300ft (1,615m) on time and on budget, with no HSE incidents. The well penetrated approximately 3,028ft (923m) of sedimentary rocks and 2,260ft (689m) of Pre-Cambrian basement, providing valuable geological data across multiple formations.
"The discovery of high helium concentrations in an area previously untested for this potential is a highly encouraging result," said Avon McIntyre, Executive Director. "While hydrogen concentrations peaked at 16.5%, lower than historical highs nearby, additional data will be acquired as we proactively monitor the well downhole. This well is located at a midpoint between the Mid-Continent Rift and the Nemaha Ridge, and we may have drilled into a helium and hydrogen migration pathway between these two main features."
Kansas: America's Helium Powerhouse
The discovery is particularly significant given Kansas's strategic position as the leading producer of helium in the United States. The state has a long history of helium production dating back to 1903, when the first globally significant discovery of helium with a concentration of 1.84% was made in Dexter, Kansas.
Currently, Kansas dominates domestic USA helium production with eight production facilities. The Hugoton natural gas field in Kansas has maintained decades of continued production with concentration ranges typically between 0.25% to 2.5% helium.
This puts HyTerra's 4.4% discovery into context – it represents a concentration nearly double the typical upper range found in the productive Hugoton field.
| Well | Peak Helium Concentration | Location |
|---|---|---|
| Blythe 13-20 | 4.4% | Nemaha Project, Kansas |
| Hoarty NE3 | <12.8% | HyTerra Portfolio |
| Sue Duroche 3 | <5% | HyTerra Portfolio |
| Hugoton Field (typical) | 0.25-2.5% | Kansas |
What Makes Helium So Valuable?
Helium is a non-renewable, critical resource with unique physical and chemical properties that make it irreplaceable for numerous high-tech and medical applications. Unlike many commodities, helium has no viable substitutes due to its inertness and exceptional cryogenic properties.
Key Helium Applications:
- Healthcare (32% of U.S. consumption): Cooling MRI magnets (each machine requires initial filling of approximately 1,700 litres of liquid helium) and specialised breathing treatments
- Electronics (18%): Semiconductor manufacturing, providing inert atmospheres for silicon wafer production
- Aerospace and Defence (17%): Rocket pressurisation, satellite instrument cooling, and leak detection
- Other Uses (33%): Including welding (13%), research and development (10%), and other industrial applications (10%)
The critical nature of helium for future-facing industries including semiconductors, aerospace, MRI technology, and quantum computing makes these discoveries by HyTerra Ltd in Kansas particularly timely amid ongoing global supply concerns.
From Exploration to Appraisal: Next Steps for Blythe 13-20
Based on the encouraging results, HyTerra has decided to convert the Blythe 13-20 well into an appraisal well. A work over rig will be mobilised to the site in July 2025 to conduct downhole drilling fluid cleanup and install monitoring equipment.
This equipment will provide crucial information to assist in designing an initial testing program planned after the remaining wells have been drilled and the subsurface data has been analysed.
The company is increasing the firm wells in the drilling sequence to a total of three wells, to be drilled from April through July 2025 at the Nemaha Project. The exploration program is being funded through an investment in the Company by Fortescue Future Industries Technologies Pty Ltd.
Upcoming Milestones:
- Conversion of Blythe 13-20 to an appraisal well (July 2025)
- Installation of downhole monitoring equipment
- Drilling of McCoy 1 well on the crest of the Nemaha Ridge
- Design and implementation of initial testing program
- Analysis of comprehensive subsurface data
Understanding Mud Gas Sampling: A Window into Subsurface Resources
For investors unfamiliar with exploration terminology, mud gas sampling provides crucial early indications of subsurface resources during drilling operations.
As a drill bit penetrates rock formations, gases trapped in those formations are released and mix with the drilling fluid (mud) that circulates through the wellbore. Specialised equipment at the surface separates these gases from the mud and analyses their composition in real-time.
While mud gas logs and samples carry some uncertainty due to drilling parameters, equipment variations, and potential atmospheric contamination, they serve as valuable preliminary indicators of resource potential. The results must be corrected for atmospheric contamination and later verified through more comprehensive testing methods.
In the case of Blythe 13-20, the mud gas samples showed peak helium concentrations of 4.4% in the Pre-Cambrian basement section, with no helium detected in the sedimentary cover. Hydrogen was found in both sections, with concentrations peaking at 16.5% in the sedimentary section and 4.1% in the basement.
| Formation | Depth | Peak Hydrogen | Peak Helium |
|---|---|---|---|
| Sedimentary | 0-3,028ft | 16.5% | 0.0% |
| Pre-Cambrian Basement | 3,028-5,300ft | 4.1% | 4.4% |
Investment Thesis: Why HyTerra's Helium Discovery Matters
HyTerra's discovery at Blythe 13-20 represents a significant development for investors interested in the critical minerals space. The unexpectedly high helium concentration of 4.4% substantially exceeds typical concentrations found in Kansas's productive Hugoton field (0.25-2.5%), suggesting potential economic viability.
The strategic importance of helium cannot be overstated. As a critical element for high-tech industries with no viable substitutes, helium commands premium pricing and faces ongoing supply challenges globally. The U.S. government has historically recognised helium's strategic importance, maintaining a Federal Helium Reserve since 1925.
Kansas provides an ideal location for helium development due to:
- Established production history and expertise
- Existing processing and transportation infrastructure
- Supportive regulatory environment
- Proximity to major industrial helium users
With HyTerra holding 6,860 net acres in the vicinity of the well site, the potential resource footprint could be substantial if further exploration confirms the presence of helium across the acreage.
Why Investors Should Follow HyTerra
HyTerra presents a compelling opportunity for investors seeking exposure to critical resources that support future-facing technologies. Several factors make this company particularly noteworthy:
- Dual-resource strategy: Exploring for both natural hydrogen and helium, providing multiple pathways to value creation
- First-mover advantage: HyTerra was the first company to list on the ASX with a focus on white hydrogen
- Strategic location: Projects located near major industrial hubs with existing transport infrastructure to potential off-takers
- Strong backing: Exploration program funded through investment from Fortescue Future Industries Technologies
- Expanding footprint: The company is increasing its drilling program to three wells, demonstrating confidence in the resource potential
The discovery of 4.4% helium at Blythe 13-20 represents a significant milestone that validates the company's exploration strategy and highlights the potential of its Kansas acreage. With the upcoming conversion to an appraisal well and additional drilling planned, investors can expect a steady stream of news flow and potential catalysts in the coming months.
As global demand for helium continues to grow across healthcare, electronics, aerospace, and research sectors, companies with proven helium resources in established production regions like Kansas are well-positioned to capitalise on this critical market opportunity. Furthermore, recent high-grade gold discovery and high-grade antimony discovery announcements in the market demonstrate growing interest in critical minerals exploration. In addition, companies focusing on high-grade REE critical minerals and those commencing drilling at copper-gold prospects are generating significant investor attention in this sector.
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