VVC Exploration Corporation ("VVC" or the "Company") (TSX-V:VVC) announces the addition of a new helium property in its recently acquired, wholly owned subsidiary, Plateau Helium Corporation ("PHC"), a Wyoming corporation. The transaction bolsters VVC’s ability to capitalize on the growing demand for helium, driven by increased global usage.
The property, known as the Monarch Lease, was purchased from Monarch Petroleum ("MP") at a nominal cost and a commitment to recommence production, with MP retaining a 3% royalty in the shallow well rights from surface to 3100 feet (the "Shallow Rights") and a 50% non-operated working interest in the deep oil and gas rights below 3100 feet (the "Deep Rights"). In addition to the 3% royalty, standard industry royalties of 12.5% are payable to arm's length land owners from the proceed of any production.
The Monarch Lease is a 1,720-acre property that is located in the Byerly Field in Greely County, Kansas and includes six formerly producing gas wells that are still connected to the Tumbleweed Midstream pipeline. All wells produced both methane and helium. PHC believes that production on these wells can be restarted with only minor re-work. Re-work on the Byerly field will commence immediately with the current expectation that the existing wells can be fully operational within 60 days.
“This Monarch Lease acquisition is a tremendous success for the PHC as it represents the second phase of its expanding helium and gas portfolio” said Bill Kerrigan, President of PHC. “Combined with the Syracuse Helium Project, PHC's properties now cover almost 15,000 acres, which is sufficient to address the short-term goal of bringing existing wells into production.”
The Byerly Field is near PHC’s 13,000-acre flagship Syracuse Helium Project, known as the Syracuse Field (see News Release of January 27, 2021). Currently, PHC is reworking existing wells on the Syracuse Field and plans to drill new wells in Q2 of 2021.
PHC owns a 100% operated working interest in the Shallow Rights of Monarch Lease and a 50% operated working interest in Deep Rights, subject of course to the royalties. In the deep zone, MP will be required to contribute 50% of any expenses toward developing those areas.
