Galactica-Pegasus project

Confirmed discovery wells in the region have flowed up to 6% helium (average of 3%) as free gas and are close to existing helium infrastructure. Blue Star drilled the State-16 development well in June 2024 which flowed 1.9% helium at 285 thousand cubic feet per day in addition to 70% CO₂. The Company’s internal gross resource estimates, assuming a P50 Helium concentration of 3%, are 675 million cubic feet. This development project is strategically located near key, under-utilised infrastructure, downstream helium purification plants and consumers.

The full development programme for the Galactica Project will require the drilling and tie-back of 15 wells, as well as commissioning of the relevant He and CO₂ processing equipment. The initial programme, which has been funded by the capital raise in August 2024, will require the drilling of six development wells which are planned for Q4 2024. Once these are complete, it is forecast that the sale of He and CO₂ from these initial wells, will generate sufficient cash to fund the drilling and tie-back the remaining nine wells as the project is close to existing helium processing facilities, associated infrastructure and downstream users.

The initial wells are expected to be on stream and producing in H1 2025 and an independent third-party competent person’s report indicates that an average of approximately US$2 million per annum will accrue to the Company over a period of five years. However, these estimates represent only sales from the production of helium, and the Company believes that the sale of associated CO₂ into the local market, could increase this by up to 50%.