At least one Medicine Hat well lo­cated in Sask. con­tains he­lium

Prairie Post (East Edition) - - Prairies -

Com­pa­nies pay roy­al­ties on pe­tro­leum and coal in the prov­ince to ac­count for the sale of the pub­licly owned re­sources.

Since he­lium had never been com­mer­cially pro­duced in Al­berta, there was never a need to con­sider or set a roy­alty rate, pro­vin­cial of­fi­cials said last win­ter.

An in­for­ma­tion let­ter to pro­duc­ers on July 19 by the Al­berta En­ergy Min­istry states that since there is no ref­er­ence price for the gas, “there is no ap­pli­ca­ble roy­alty payable on he­lium.”

Be­gin­ning Sept. 1, op­er­a­tors were re­quired to be­gin re­port­ing pro­duc­tion vol­umes and sell­ing prices to the depart­ment.

“Ef­forts to es­tab­lish a roy­alty rate for he­lium prod­ucts will be done with con­sid­er­a­tion for com­pet­i­tive­ness with neigh­bour­ing ju­ris­dic­tions,” the note con­cludes.

The elu­sive gas col­lects in deep un­der­ground cav­erns, is ex­tracted sim­i­lar to con­ven­tional pe­tro­leum, and is in­creas­ingly used as a cool­ing in high-tech ap­pli­ca­tions due to its sta­bil­ity and non-com­bustible na­ture.

At least one City of Medicine Hat well thought to have he­lium po­ten­tial was drilled re­cently in Al­berta’s deep south­ern re­gion, but ad­min­is­tra­tors won’t dis­close which of the three he­lium wells was suc­cess­ful. One pos­i­tive well is still be­ing tested.

Of­fi­cials with the Saskatchewan Ge­o­log­i­cal sur­vey con­firm to the News there are 79 ac­tive per­mits and 90 leases cov­er­ing he­lium ex­plo­ration on just over 973,000 hectares.

The to­tal of 16 com­pleted wells is an in­crease, and the depart­ment ex­pects higher prices to drive fur­ther ac­tiv­ity.

This month, the U.S. Bu­reau of Land Man­age­ment re­ported that the av­er­age auc­tion price for he­lium de­liv­er­ies from the U.S. fed­eral strate­gic sup­ply rose to US$279.95 per MCF. That’s com­pared to an av­er­age price in 2017 of US$119.31.

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