Mr. Chris Bakker reports
AVANTI ENERGY ANNOUNCES FIRST RESOURCE ESTIMATE FROM WNG 11-22 WELL AND UNDERLYING STRUCTURE
Avanti Energy Inc. has received a total unrisked contingent resource estimate of 187 million cubic feet of net recoverable helium gas (based on a raw gas estimate of 17 billion cubic feet recoverable and net helium concentration of 1.1 per cent), prepared by McDaniel & Associates Consultants Ltd., a qualified reserves evaluator, for the company's WNG 11-22 helium well and underlying structure in the Greater Knappen property, located in Montana. This volume represents the best estimate of the unrisked contingent resource. The low and high estimates of unrisked contingent resources are 66 million cubic feet and 374 million cubic feet of recoverable helium gas (based on six billion cubic feet and 34 billion cubic feet recoverable raw gas), respectively.
Based on the test data of the Flathead Cambrian Sandstone zone from the WNG 11-22 well, a best-estimate contingent resource (2C) volume of 77 million cubic feet of net helium (based on seven billion cubic feet raw gas) is assigned to the well in the category development pending. Two follow-up wells are forecast to be drilled in the structure underlying WNG 11-22 and recover 55 million cubic feet of net helium (based on five billion cubic feet of raw gas), respectively.
The contingent resources have been risked to account for the chance of commerciality. The contingent resources have been estimated at a 90-per-cent chance of commerciality. As such, the WNG 11-22 well has been assigned development pending risked contingent resources of 6.3 billion cubic feet raw gas in the 2C case, and the follow-up wells have been assigned 4.5 billion cubic feet each in the 2C case, for a total risked contingent resources of 168 million cubic feet (based on 15.3 billion cubic feet of raw gas).
By comparison and based on publicly available data, the largest-producing pure play helium in Canada is the Wilhelm area of Saskatchewan and produced a total of 233 million cubic feet of helium (based on 16.3 billion cubic feet of raw gas) over a 14-year period.
Based on the potential volume of raw gas in the WNG pool's Flathead zone, the company is proceeding to drill an appraisal well, WNG 10-21, approximately one kilometre west of WNG 11-22 and 50 metres down structure. The appraisal well will help define the edge of the gas pool. This appraisal well will also allow the company to gather additional information about the Souris River zones in support of an evaluation plan to recomplete the zone in WNG 11-22.
"The initial assessment of the Flathead zone contingent resources marks a key step in the process of moving from a discovery well to reserves," commented Chris Bakker, chief executive officer of Avanti. "It provides the confidence needed to plan additional appraisal and development wells with the potential to increase resource estimates. Further, it allows the company to move forward with facilities planning and commercial arrangements." He continued, "Having now penetrated two of the 10 identified potential structures in Greater Knappen, the Avanti team is very excited about the prospects of developing this pool and testing the remaining opportunities."
Additional information and cautionary statements:
The company's net interests in mineral lands vary from approximately 85 per cent to approximately 75 per cent.
- As previously announced, the company has engaged a facilities engineering firm to assess recovery technologies and associated costs, and, at this time, there are no estimates to offer. The company is working toward an on stream production target of mid-2023 but this cannot be offered as a firm estimate at this time.
- The resource is contingent on financing for development and production.
- There is uncertainty that the project will be commercially viable to produce any portion of the contingent resources.
- The estimates presented in this release are based on data and test results from one well. There is potential for future drilling activity to materially impact the estimated volumes based on additional geological data and production testing. Estimated pool volumes may increase or decrease in the future.
- The contingent resources estimated for WNG 11-22 and offsetting locations rely on comparisons with analogous wells, and no production data are available from the well included in this estimate.
- The reader is cautioned that disclosure of helium-in-place volumes is not included in National Instrument 51-101 guidelines.
Information regarding the contingent resources
The effective date of the contingent resource estimate is July 1, 2022, and was prepared in accordance with the COGE (Canadian Oil and Gas Evaluation) Handbook.
One hundred per cent of the contingent resources disclosed in this news release are located in the Greater Knappen property and are classified as development pending with a chance of development of 90 per cent. There are no technical contingencies preventing the classification of economic contingent resources as reserves as all economic contingent resources are considered discovered and are based on established technology. The non-technical contingencies that must be resolved before these resources may be classified as reserves are the establishment of processing and sale agreements and corporate commitment to develop these assets in a timely fashion.
About Avanti Energy
Avanti Energy is focused on the exploration, development and production of helium across Western Canada and the United States. Avanti's professional oil and gas exploration and production team is actively targeting untapped potential helium reserves to help meet the increasing global demand for an irreplaceable and scarce element critical to advanced technology, medical and space exploration industries.
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