LONDON: Mendell Helium has announced that M3 Helium Corp. has acquired interests in three additional wells on the western side of the Hugoton gas field in Kansas. Two of these wells are currently in production, while the third is considered suitable for conversion into a water disposal well.
Following this acquisition, M3 Helium now holds interests in nine wells. Mendell Helium has an option to acquire M3 Helium Corp., although there is no certainty that this option will be exercised or that the group will successfully re-admit to trading on the AQSE Growth Market.
The acquisition includes an 85% interest in the Bearman, Demmit, and Cockerham wells in Stanton County, Kansas. The Bearman and Demmit wells produce a combined 25 Mcf/day with approximately 0.6% helium content. The Cockerham well is not currently producing.
These wells are connected to Scout Energy’s Jayhawk gas processing plant via a pipeline operated by Energy Transfer LP. M3 Helium acquired the wells for no consideration, as they currently break even financially. The company has identified steps to bring the wells to profitability, including obtaining a price for helium, converting the Cockerham well into a water disposal well to reduce costs, and potentially acidizing the wells to increase gas production.
Nick Tulloch, CEO of Mendell Helium, stated, “Today’s acquisition demonstrates M3 Helium’s progress in Kansas. While these wells may not be significant producers, they offer incremental production at minimal cost. Evaluating the potential of a disposal well could enhance their production capabilities.”
Mendell Helium announces major farm-in agreement with Scout Energy