Helium sources are non-renewable and scarce in economically recoverable quantities.
Helium (4He – the stable isotope of helium), is radiogenically sourced from the radioactive decay of Uranium and Thorium at significant depths in the earths crust. Typically, Precambrian metamorphic or granitic basement rock have higher concentrations of U238, U235 or Th232 and are old enough to have the necessary time component, as well as the necessary heat, for radioactive decay of these elements to helium. Once uranium and thorium decay, the released helium remains trapped beneath caprock.
Historically, helium has predominantly been extracted as a by-product of natural gas production with natural gas prices largely dictating the economics of these plays. With the recent increases in helium prices and natural gas prices dropping, there has been a resurgence in companies actively exploring for helium with the natural gas now being thought of more as a by-product. A number of companies (Royal Helium and N American Helium) are also seeking to produce helium from reservoirs where nitrogen and/or carbon dioxide make up the bulk of the carrying gas stream rather than natural gas which is generally cheaper to produce and process.
Importantly, drilling for helium is nearly identical to the process of drilling for natural gas allowing for the transfer of knowledge from the oil and gas industry and benefiting from a current abundance of idle rigs in North America. As most of the wells targeting helium are simple vertical wells, they don’t necessitate the higher-spec (and more in-demand) rigs required to drill longer and deeper horizontal wells.
Michael Mueller, Cormark Securities – July29, 2020
Unlike the “typical” helium well, in which helium is a by-product of natural gas, wells in Saskatchewan are “helium primary”, due to the unique nature of the minerals within the Precambrian basement located in Southern Saskatchewan.