Georgina Energy CEO Anthony Hamilton says he is dedicated to well redevelopment.
The plan, conceived by technical director John Heugh, is to re-enter wells in Western and Central Australia abandoned in the 1980s but where the success rate was 100 per cent.
This approach is cost-effective for gaining insight into the geological formation of hydrogen and helium, both in high demand in the modern green global economy, as well as traditional natural gas.
Work will commence at Hussar in preparation for drilling in December, which is expected to last around 50 days.
Georgina is raising around £5m through a reverse takeover transaction, taking the company on to the LSE’s standard listing.
The historic nature of Georgina’s EP513 target means that there is a drilling rig, access roads and oil and gas infrastructure (relatively) nearby. A rig can be mobilised and on-site within days.
Hussar is one of two Georgina projects with a combined area of 3,951 km²; the second is Mt Winter, a mining operation that gives the company the right to earn up to 90% of the asset.
To fund development costs, Georgina is raising around £5 million through a reverse takeover transaction, listing the company on the LSE’s standard listing.
Its launch is expected to take place on July 30. After that, the countdown to December will begin: applications for drilling permits will be made and environmental approval will be sought.
There is already a native title land access agreement and a well re-entry program with all costs calculated.
Hamilton and his team will then reprocess additional seismic data and evaluate the results of recent airborne surveys.
The plan is to re-enter EP513 and drill to a depth of around 3,200 metres through the existing geological horizons in the basal Broome and Townsend formations before reaching the targeted granite basement.
If all goes according to plan, it will be a vertical re-entry, although Hamilton and his experts also have an alternative solution if necessary.
Success would allow the company to produce helium, hydrogen and gaseous hydrocarbons, which would require on-site refining facilities.
Georgina’s lower-risk, lower-cost approach involves selling production at the wellhead, with pricing based on product composition.
The customer, or “buyer,” would be responsible for separation and transportation. Management is evaluating the use of salt caverns for storage and plans to begin negotiations with the owners of a refinery in Darwin, Northern Territory.
The processing units are modular, transportable and scalable. Hamilton and the team must first drill the well before interpreting the results to see if what they have is commercial.
Georgina’s CEO said he would be happy with data showing gases with around or above 5% helium and 10% hydrogen.
“Many producers around the world are operating on less than 1% or 2% (helium),” Hamilton says.
“But the reality is that we expect there to be five or more.”
Georgina has signed a memorandum of understanding with a potential gas buyer, indicating a real interest in what the company is doing and what it hopes to find.
Details of a final agreement will be finalized after successful drilling at EP513 is completed.
Hamilton would like to recoup some of the money invested, which would allow the team to transition to the next target at Mt Winter in the Northern Territory.
The Group’s exploration licences (Hussar and Mt Winter) are located respectively within the Officer Basin and Amadeus areas of Australia’s Centralian Superbasin, which has a long history of oil and gas development dating back over 40 years.
An agreement with the AIM-listed company Mosman Oil and Gas gives Georgina the right to earn its 90% interest in Mt Winter (EP155), which will target the Heavitree Formation at around 2,650 metres.
Three previously drilled wells that penetrated Heavitree encountered helium and hydrogen, with readings up to 9% for the former and 11% for the latter.
The outlook for this second well is therefore good. The initial economics supporting Georgina’s assets are so positive that they seem almost fantastical.
Based on estimated in-situ volumes, Hussar’s helium and hydrogen alone are valued at $55 billion, with natural gas potentially worth an additional $5.24 billion.
London, with its rich tradition in oil and gas, is becoming a magnet for companies like Georgina, with Helium One paving the way.
Propeller exploration It went public in April and its shares have since soared by around 260%.
Georgina’s CPR resource base (2U/P50 303 billion cubic feet of helium) is 42% larger than that of Helium One and dwarfs that of Helix.
There will be a lot of news between now and December, including reinterpretation of historical and new data, permitting, and preparation for drills.
So, the company is expected to remain firmly on the radar. It’s easy to see Georgina’s story as a sure thing, but it’s not.
Hamilton and his team have done a lot to mitigate the risk around the EP513, but this does not mean a risk-free investment.
Even the most experienced contractors face unforeseen drilling problems.
And there are elements beyond anyone’s control. ‘What keeps me up at night?
“Well, Mother Nature. We’ve seen flooding in Central Australia and extreme heat,” Hamilton says.
“And of course, we may encounter problems that force us to divert the exploitation (of the well).”
Investors backing the upcoming IPO liked the story because “it’s not just a one-trick pony,” Hamilton says.
‘We are in the right space for the raw materials market, with helium and its global applications. But we also have hydrogen and natural gas.
“So I think we have the right assets, in the right place at the right time.”
The company’s new backers also appreciated that the two founders, Hamilton and Mark Wallace, had invested around £2.5m of their own cash in Georgina and waived payment for her services.
The city likes that kind of commitment.
For all the latest small-cap news, visit www.proactiveinvestors.com.
Some links in this article may be affiliate links. If you click on them we may earn a small commission. This helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationships to affect our editorial independence.