CALGARY,
AB, June 24, 2022 /CNW/ - Avanti Energy
Inc. (TSXV: AVN) (OTC: ARGYF) ("Avanti" or the "Company")
is pleased to announce that it has received a total unrisked
contingent resource estimate of 187MMcf of net recoverable
helium gas (based on a raw gas estimate of 17 billion cubic feet
("Bcf") recoverable and net helium concentration of 1.1%) prepared
by McDaniel & Associates Consultants Ltd., a qualified reserves
evaluator, for the Company's WNG 11-22 helium well and underlying
structure in the Greater Knappen Property, located in Montana. This volume represents the best
estimate of the unrisked contingent resource. The low and high
estimates of unrisked contingent resources are 66MMcf and 374MMcf
of recoverable helium gas (based on 6 Bcf and 34 Bcf recoverable
raw gas), respectively.
Based on the test data of the Flathead Cambrian Sandstone zone
(the "Flathead Zone") from the WNG 11-22 well, a best estimate
contingent resource (2C) volume of 77MMcf of net helium (based on 7
Bcf raw gas) is assigned to the well in the category development
pending. Two follow-up wells are forecast to be drilled in the
structure underlying WNG 11-22 and recover 55MMcf of net helium
(based on 5 Bcf of raw gas), respectively.
The contingent resources have been risked to account for the
chance of commerciality. The contingent resources have been
estimated at a 90% chance of commerciality. As such, the WNG 11-22
well has been assigned development pending risked contingent
resources of 6.3 Bcf raw gas in the 2C case, and the follow-up
wells have been assigned 4.5 Bcf each in the 2C case, for a total
risked contingent resources of 168MMcf (based on 15.3 Bcf of raw
gas).
By comparison, and based on publicly available data, the largest
producing pure play helium in Canada is the Wilhelm area of Saskatchewan and produced a total of 233MMcf
of helium based on (16.3 Bcf of raw gas) over a 14-year period.
Based on the potential volume of raw gas in the WNG pool's
Flathead Zone, the company is proceeding to drill an appraisal
well, WNG 10-21, approximately 1km west of WNG 11-22, and
50m down structure. The appraisal
well will help define the edge of the gas pool. This appraisal well
will also allow the Company to gather additional information about
the Souris River zones in support of an evaluation plan to
recomplete the zone in WNG 11-22.
"The initial assessment of the Flathead Zone contingent
resources marks a key step in the process of moving from a
discovery well to reserves," commented Chris Bakker, Avanti CEO. "It provides the
confidence needed to plan additional appraisal and development
wells with the potential to increase resource estimates. Further it
allows the company to move forward with facilities planning and
commercial arrangements." He continued, "Having now penetrated two
of the ten identified potential structures in Greater Knappen, the
Avanti team is very excited about the prospects of developing this
pool and testing the remaining opportunities."
Additional Information and
Cautionary Statements
- The Company's net interests in mineral lands vary from ~85% to
~75%.
- As previously announced, the Company has engaged a facilities
engineering firm to assess recovery technologies and associated
costs and, at this time, there are no estimates to offer. The
Company is working toward an on-stream production target of
mid-2023 but this cannot be offered as a firm estimate at this
time.
- The resource is contingent on funding for development and
production.
- There is uncertainty that the project will be commercially
viable to produce any portion of the contingent resources.
- The estimates presented in this release are based on data and
test results from one well. There is potential for future drilling
activity to materially impact the estimated volumes based on
additional geological data and production testing. Estimated pool
volumes may increase or decrease in the future
- The contingent resources estimated for WNG 11-22 and offsetting
locations relies on comparisons to analogous wells, and no
production data is available from the well included in this
estimate
- The reader is cautioned that disclosure of helium in place
volumes is not included in National Instrument 51-101
guidelines.
Information Regarding the
Contingent Resources
The effective date of the contingent resource estimate is
July 1, 2022 and was prepared in
accordance with the COGE Handbook.
This news release discloses estimates of the Company's
contingent resources. The Company defines contingent resources are
those quantities of gas estimated, as of a given date, to be
potentially recoverable from known accumulations using established
technology or technology under development but which are not
currently considered to be commercially recoverable due to one or
more contingencies. There is uncertainty that it will be
commercially viable to produce any portion of the resources.
The resource provides an estimate of raw gas. In April 2022, preliminary lab results showed the
raw gas composition of the Cambrian zone at the WNG 11-22 well was
97.5% Nitrogen, 1.1% Helium, 1.1% Methane, 0.3% Co2 and trace
amounts of other hydrocarbons.
The resource estimates presented above are subject to certain
risks and uncertainties, including those associated with the
drilling and completion of future wells, limited available
geological, prices of the various raw gases and geophysical data
and uncertainties regarding the actual production characteristics
of the reservoirs, all of which have been assumed for the
preparation of the resource estimates.
The resources are classified as development.
Contingent resources do not constitute, and should not be
confused with, reserves. Contingent resources are defined as those
quantities estimated, as of a given date, to be potentially
recoverable from known accumulations using established technology
or technology under development, but which are not currently
considered to be commercially recoverable due to one or more
contingencies. There is a range of uncertainty of estimated
recoverable volumes. A low estimate ("1C") is considered to be a
conservative estimate of the quantity that will actually be
recovered. It is likely that the actual remaining quantities
recovered will exceed the low estimate, which under probabilistic
methodology reflects at least a 90% confidence level. A best
estimate ("2C") is considered to be a realistic estimate of the
quantity that will actually be recovered. It is equally likely that
the actual remaining quantities recovered will be greater or less
than the best estimate, which under probabilistic methodology
reflects at least a 50% confidence level. A high estimate ("3C") is
considered to be an optimistic estimate. It is unlikely that the
actual remaining quantities recovered will exceed the high
estimate, which under probabilistic methodology reflects at least a
10% confidence level. There is uncertainty that it will be
commercially viable to produce any portion of the resources.
All of the resources classified as contingent are considered to
be discovered, and as such have been assigned a 100% chance of
discovery, but have however been risked for the chance of
development. The chance of development is defined as the likelihood
of a project being commercially viable and development proceeding
in a timely fashion. Determining the chance of development requires
taking into consideration each contingency and quantifying the
risks into an overall development risk factor at a project
level.
Contingent resources can be subcategorized by project maturity
status:
(i) Development Pending is where resolution of the final
conditions for development is being actively pursued (high chance
of development). Resources classified in this sub-category must be
economic and have been assigned a chance of development ranging
between 80% and 99%.
(ii) Development On Hold is where there is a reasonable chance
of development, but there are major non-technical contingencies to
be resolved that are usually beyond the control of the operator.
Resources classified in this sub-category must be economic and have
been assigned a chance of development ranging between 50% and
79%.
(iii) Development Unclarified is where the evaluation is
incomplete due to the project being in an early stage of maturity
and there is ongoing activity to resolve any risks or
uncertainties. Resources classified in this sub-category can either
be economic or sub-economic and have been assigned a chance of
development ranging between 20% and 79%.
(iv) Development Not Viable is where no further data acquisition
or evaluation is currently planned and hence there is a low chance
of development. Resources classified in this sub-category can
either be economic or sub-economic and have been assigned a chance
of development ranging between 0% and 49%. Based on these
definitions, all of the contingent resources disclosed in this news
release are classified as Development Pending and are considered
economic with either a high or reasonable likelihood of being
commercially viable.
In general, contingencies which prevent contingent resources
from being classified as reserves are grouped under three
categories: economic contingencies, non-technical contingencies and
technical contingencies. Economic contingencies are applicable only
in the case of sub-economic contingent resources. As all of the
contingent resources disclosed in this news release are classified
as economic contingent resources, there are no economic
contingencies in respect of such resources. Non-technical
contingencies include factors such as required corporate or third
party (such as joint venture partners) approvals, legal,
environmental, political, social license and regulatory matters or
a lack of infrastructure or markets. Technical contingencies are
applicable where there is a technology currently under development
that would be required to classify the contingent resources in
question as reserves. None of Avanti's estimated contingent
resources are subject to technical contingencies.
Significant positive and negative
factors relevant to the estimates
Significant positive factors relevant to the estimates
include:
- commercial success of drilling
- corporate commitment to develop plays over a reasonable time
frame;
- significant well control and offsetting economic well
production;
- proximity to infrastructure for production growth and central
market hubs; and
- low political risk as all reserves and resources are located in
North America.
Significant negative factors relevant to the estimates
include:
- potential for low commodity prices impacting the economic
viability and development of certain areas;
- access to and amount of capital required to develop resources
at an acceptable cost;
- significant production growth and access to infrastructure
capacity;
- development uncertainty relating to surface access
matters.
Estimates of economic contingent resources are based on existing
access to infrastructure capacity and the current regulatory
frameworks in which Avanti operates.
Greater Knappen
One hundred percent of the contingent resources disclosed in
this news release are located in the Greater Knappen property and
are classified as Development Pending with a Chance of Development
of 90%. There are no technical contingencies preventing the
classification of economic contingent resources as reserves as all
economic contingent resource are considered "discovered" and are
based on established technology. The non-technical contingencies
that must be resolved before these resources may be classified as
reserves are the establishment of processing and sale agreements,
and corporate commitment to develop these assets in a timely
fashion.
About Avanti
Energy
Avanti Energy is focused on the exploration, development, and
production of helium across western Canada and the
United States. Avanti's professional oil and gas exploration
and production team is actively targeting untapped potential helium
reserves to help meet the increasing global demand for an
irreplaceable and scarce element critical to advanced technology,
medical and space exploration industries. For more information,
please go to the Company's website
at www.avantienergy.com.
Forward-Looking
Statements
The information set forth in this news release contains
forward-looking statements that are based on assumptions as of the
date of this news release. These statements reflect management's
current estimates, beliefs, intentions, and expectations. They are
not guarantees of future performance. The Company cautions that all
forward-looking statements are inherently uncertain, and that
actual performance may be affected by a number of material factors,
many of which are beyond the Company's control. Such factors
include, among other things: risks and uncertainties relating to
the Company's limited operating history and the need to comply with
environmental and governmental regulations. Accordingly, actual and
future events, conditions and results may differ materially from
the estimates, beliefs, intentions, and expectations expressed or
implied in the forward-looking information. Except as required
under applicable securities legislation, the Company undertakes no
obligation to publicly update or revise forward-looking
information.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the Exchange)
accepts responsibility for the adequacy or accuracy of this
release.
SOURCE Avanti Energy Inc.