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- Big Star Energy (ASX:BNL) has acquired over 21,000 net acres in new leases across seven prospects in Colorado, USA
- The leases equate to a 1400 per cent increase in the company’s net acres leased
- Next on the cards for the company is a five-well drilling programme in search of high-concentration helium accumulations
- If helium or other products are found, the five year lease will be extended until production is complete
- A 20 per cent royalty will also be payable to the State of Colorado
- The consideration for the new leases is approximately $110 million
- Shares in Big Star Energy are up 60 per cent, trading for 0.8 cents apiece
Big Star Energy (ASX:BNL) has acquired over 21,000 acres in new leases across seven prospects in Colorado, USA.
The leases bring the total areas leased by the company to over 23,000 net acres across nine prospects.
The consideration for the new leases is approximately $110 million (US$73,946) and includes the first years rent, lease bonuses, application and other fees. The annual rental payment per acre is $3.69 (US$2.50).
The company will now carry out a five-well drilling programme in search of any high-concentration helium accumulations, according to Managing Director, Joanne Kendrick.
“With success in our proposed drilling campaign, any discovered high-concentration helium accumulation would potentially be developed using a pressure swing adsorption plant,” she said.
While the lease does not include any minimum work requirements, if Big Star Energy successfully produces helium or any other products, a 20 per cent royalty will also be payable to the State of Colorado.
Successful production will also mean the initial five-year lease will be extended indefinitely until production is complete.
Shares in Big Star are up 60 per cent, trading for 0.8 cents apiece at 4:10pm.
