HyTerra Ltd (ASX:HYT) and joint venture partner Natural Hydrogen Energy LLC have produced a work program for flow testing of the Hoarty NE3 natural hydrogen exploration well at the Geneva Project in Nebraska, US.
This flow test program has been designed as an extended test to record gas flow data over a period of several months, allowing the company to determine the hydrogen production potential of the well and measure key parameters that include gas composition, pressure and flow rate.
The operation will involve the installation of an electrical submersible pump (ESP), a commonly deployed downhole pump used to dewater the well to allow hydrogen gases to flow freely from two prospective zones.
Independent lab analysis of the generated data will focus on hydrogen concentration, as well as other commercial non-hydrocarbon gases like helium that may co-exist within the stream.
Step toward resource estimate
“These upcoming operations are a step forward for not only our joint venture but the wider natural hydrogen industry as the first proper flow test of a wildcat exploration well intentionally targeting natural hydrogen,” HyTerra executive director Avon McIntyre said.
“The data collected will be critical to establishing a contingent resource estimate for the project and will also accelerate our understanding of natural hydrogen systems for future exploration.”
The joint venture has engaged with service providers and is now making the final selection bids and mobilisation schedules for next year, with the rig contract expected to be awarded in early January.
About HyTerra and natural hydrogen
HyTerra is an Australian-based company focused on the exploration and production of natural hydrogen.
HYT requested a voluntary suspension from the ASX in October due to financial and corporate strategy conflicts with Chapters 1 and 2 of the ASX Listing Rules.
The company re-listed on December 2, 2022, having been awarded conditional waivers for a number of ASX listing requirements and refocused the business on natural hydrogen as a core asset.
Natural hydrogen is produced through naturally occurring processes in the subsurface of the earth.
Hundreds of historical gas wells have struck hydrogen in the past but companies had no incentive to commercialise the resource until recently.
The renewable energy and decarbonisation revolution rapidly changed hydrogen’s commerciality, positioning it as one of the few environmentally friendly fuels with the potential to replace hydrocarbons.
Grand View Research estimates the global hydrogen generation market was valued at US$128.85 billion in 2021, with a healthy compounding annual growth rate (CAGR) of 6.4% through 2030.
HyTerra holds an interest (with the right to earn up to 51%) in a joint development agreement with Natural Hydrogen Energy LLC to advance the Geneva Project.
The joint venture’s assets include the world’s first wildcat well specifically targeting natural hydrogen (Hoarty NE3) as well as 3,891 acres of exploration leases across Nebraska and South Carolina.
The company currently has an attractive enterprise value of about $5 million and has targeted a rapidly growing market that is steadily gaining greater geopolitical and economic support as efforts to decarbonise accelerate.
HyTerra is targeting 2024 for production, a schedule that would position the company as a global leader in natural hydrogen and the broader renewable hydrogen sector.