Emerging liquefied natural gas (LNG) and helium producer Renergen has appointed Bohrmeister Technik as drilling contractor to undertake the drilling of a horizontal well in the prospective sandstone contained within its Virginia gas project’s production area, in the Free State.

Bohrmeister is a drilling contractor that specialises in the manufacture and supply of hydraulic exploration drilling rigs in South Africa.

Site mobilisation is expected to take place within two weeks, followed by a drilling campaign, which is expected to continue for the rest of the calendar year.

The horizontal well will provide the requisite information to enable estimation of the scale of helium reserves contained within the sandstone, which have not been factored into existing reserve estimates.

The previous well drilled into the sandstone in 2016 had helium concentrations of almost 11%.

Over the past six months, Renergen has been working closely with its geological consultants, Shango Solutions, to optimise the information captured.

JSE- and ASX-listed Renergen has, within the production area, identified a discrete sandstone body of varying quality, which is up to 100 m thick in certain parts, over an area of at least 90 km².

Below the sandstone are interpreted north–south oriented, steeply dipping fractures, and east–west oriented dykes associated with fractured margins. These structures have been identified as being potentially gas-bearing conduits with a higher helium concentration than the rest of the field, where the helium concentration exceeds 3%, on average.

The geological model developed over the past six months forms the basis of Renergen’s drilling strategy for 2020, which includes additional inclined wells to intersect known fault structures in the current production area, and will serve to feed Phase I of the project, with planned daily production of 2 700 GJ of LNG and 350 kg of helium from 2021.

The horizontal well, if successful, will form the basis for the start-up of Phase II, which is expected to result in production levels of several multiples compared with Phase I.