The gas sales and processing agreement means it has a route to market should well Jesse-1 prove successful.
The Lisbon facility has a helium liquefaction train that can process the noble gas to 99.99% purity and is one of eight helium liquefiers in the US holding 7% of the nation's nameplate capacity.
Lisbon is selling helium for up to US$605 per thousand cubic feet after US supply disruptions and sanctions on Russia that may delay start up of what is to be one the world's largest processing facilities. It takes a 20% cut, standard practice for the area as well as tariffs for gathering, compressing and processing. Paradox Resources owns the facility.
Jesse-1 is set for spud next month, Grand Gulf's maiden pure-play helium well.
The two are in discussions to identify more opportunities, Grand Gulf said. Its partner owns over 100,000 acres and operates 150 wells in the Paradox Basin in the Four Corners area of Utah, Colorado, New Mexico and Arizona with 570 miles of pipelines and four compression stations.
The plant is also working on carbon sequestration.
Last year it committed to increasing its stake in US company Valence Resources to 55%, a 30% increase, via drilling three wells at a cost of US$1.5 million each.
This increases the P50 unrisked prospective resource the company holds at the Red Helium project to 6.3 billion cubic feet.
Project partners Four Corners Helium and Red Dragon Exploration will take 85% of this payment in escrowed Grand Gulf shares. This works out at 90.4 million shares escrowed for six months from completion of the first well and a $400,000 cash payment.
Grand Gulf now holds 55% of Valence with the right to increase this by another 30% after it completes drilling all three wells.
The Red Helium project holds a 250,713 acre area of mutual interest with 28,056 acres (private leases/Utah state leases) leased in drill-friendly Utah in what Grand Gulf calls "the heart of the most prolific helium-producing region in the world".
In mid-November it increased its US helium acreage holding by 16%.
Grand Gulf is up over 9% today at 3.5c per share
