D3 Energy to Conduct Helium, Natural Gas Well Drill Operation

D3 Energy Limited (ASX: D3E), also known as D3 Energy, has signed a contract with Van Zyl Boorwerke (VZB) to conduct drilling operations at RBD12 within ER315, located onshore in South Africa.

VZB served as the drilling contractor for D3 Energy's initial two-well drilling campaign at ER315, successfully finishing within schedule and budget.

As reported to the ASX on May 13, 2024, the initial two wells, RBD10 and RBD11, verified exceptional helium concentrations of 5.0% and 5.1%, respectively. These wells were drilled to validate the geological model and confirm that gas migration (including helium and methane) was influenced by faulting and related fractures beneath the base of the Karoo formation in this area.

RBD10, drilled west of the Virginia Fault, underwent production testing and achieved a stable average flow rate of 126 thousand standard cubic feet (Mscf) over a 36-hour period, showing no signs of decline. Meanwhile, RBD11, located east of the Virginia Fault, is also producing gas, albeit at rates too low to quantify accurately.

Based on insights gained from the RBD10 and RBD11 wells, D3 Energy intends to position the RBD12 well to the west (hanging wall side) of the Virginia Fault, near the historical RBD03 borehole. RBD03 has consistently produced measurable rates of methane and helium since 1984.

After successfully intersecting gas, RBD12 will undergo production testing to collect samples and determine concentrations of helium and methane. This is expected to initiate a broader and more extensive production testing program, starting with the testing of historical gold exploration boreholes RBD01 & RBD03 as early as next month.

The drilling and completion of RBD12 are budgeted at approximately AU$200K. Despite these costs, development expenses are expected to be significantly lower, highlighting the cost-effectiveness of D3 Energy's assets in South Africa. RBD12 is poised to become a prospective production well in the future. Given their natural flow without the need for artificial lift or pumping, such wells entail exceptionally low to negligible operating costs over their extensive lifespan.

David Casey, Managing Director and CEO of D3 Energy, stated: "This marks another significant milestone for the company as we progress through our strategy of exploration, rapid development, and commercialization of a world-class helium asset. We have already identified a globally significant Contingent Resource for helium and a substantial Contingent Resource for methane in energy-deficient South Africa.

The positive outcomes from our initial successful drilling program have significantly bolstered our confidence in RBD12. This will be followed by an extensive production testing program that is expected to serve as the foundation for our initial development opportunity within our extensive portfolio."