Energy Quarterly Wrap: Oil and helium juniors look beyond the Gulf

• Blue Star delivers its first commercial helium sales from Colorado
• Lion prepares to drill Bula Karang’s 12-million-barrel prospective oil target
• Bounty targets entry into Liberia’s deepwater frontier

Special Report: As conflict in the Gulf disrupts global oil and helium supply chains, three ASX juniors are making progress on alternative sources across the US, Indonesia and Liberia.

The Iran conflict has exposed how quickly disruption in one region can ripple through global supply chains.

Attacks on Gulf infrastructure and disrupted shipping have squeezed oil supplies, with North Sea Dated crude averaging US$116.89 a barrel in September, up more than US$26 from August, according to the International Energy Agency.

Even as higher prices curb consumption, the agency expects the oil market to remain in deficit through year-end.

But the disruption extends beyond oil. Helium, a specialist gas used in semiconductor manufacturing, medical imaging and scientific research, has its supply tied to the Gulf’s energy infrastructure.

Qatar, the world’s second-largest helium producer, recovers its helium as a by-product of natural gas production.

In March, Iranian missiles damaged two LNG production trains at Ras Laffan, Qatar’s LNG industrial hub, reducing the country’s helium output and putting global supply under strain.

Against this backdrop, alternative sources of oil and industrial gases are attracting fresh attention.

Three ASX juniors made progress on that front during the September quarter, from commercial helium sales in Colorado to oil exploration in Indonesia and a potential new frontier offshore Liberia.

Blue Star Helium (ASX:BNL) – helium sales take off

Blue Star put US helium into customers’ hands during the quarter, delivering its first commercial sales from the Pinon Canyon processing plant in Colorado.

The facility serves the Galactica project in Las Animas County, operated by Blue Star in a 50:50 joint venture with Helium One Global.

Five tube trailers were delivered during the three months to September 30, followed by another after quarter-end.

The first sale used spot pricing, with subsequent deliveries made under an offtake agreement with a major US industrial gases purchaser.

The agreement covers all helium output from Pinon Canyon at a fixed price and was extended during the quarter to March 31, 2027 — providing the company with a route to market while the partners work to lift production.

The joint venture received about A$460,000 from helium sales during the quarter. Blue Star’s share was approximately A$190,000 after royalties and before production taxes, with the plant still ramping up.

Further plant and gathering-system improvements, possible deepening of existing wells and three new production wells are intended to increase throughput. Permits for the new wells are now expected in the December quarter, with drilling planned for the March quarter of 2027.

Lion Energy (ASX:LIO) – Indonesian oil target comes into focus

Lion’s contribution to potential new oil supply centres on a well that can reach an offshore target from an onshore drilling pad.

Bula Karang-1, in Indonesia’s East Seram production sharing contract, will test a carbonate reef prospect close to existing oil infrastructure on Seram Island.

The main target carries a gross, unrisked P50 prospective resource of about 12 million barrels of oil and an estimated 38% geological chance of success. A discovery could also help assess nearby follow-up prospects in the same play.

By the end of the September quarter, well-pad and access-road works were complete, major drilling and support contracts were in place, and rig mobilisation had begun.

On October 13, the barge carrying Silver City Drilling Rig 20 departed West Java. The revised schedule targets a November 10 spud and completion of drilling and evaluation in early December, subject to vessel arrivals and operating conditions.

Lion holds a 45% interest in the East Seram PSC through its subsidiary Balam Energy, while OPIC East Seram, a subsidiary of Taiwanese oil and gas company CPC Corporation, holds the remaining 55%. OPIC funds 88% of qualifying drilling expenditure within the first US$5.6m of gross costs. Expenditure above that threshold is shared 45:55, against a current gross well budget of about US$6.7m.

The quarter also brought a sharper focus on upstream oil and gas. Lion moved to exit its hydrogen business and completed the sale of its 2.5% indirect interest in the separate Seram (Non-Bula) PSC, receiving the US$970,000 balance of consideration to support its drilling commitments.

If initial results warrant further testing, a smaller workover rig in the Bula area could complete the well and carry out an extended test, currently planned for March 2027. Reservoir and productivity data would then help determine development options using nearby storage, processing and export infrastructure.

Bounty Oil & Gas (ASX:BUY) – a new frontier beckons

Bounty used the quarter to pursue a new exploration position on Africa’s Atlantic margin, alongside its existing Australian oil interests.

It signed a conditional agreement in September to acquire PetroQuest Liberia Deep Water, whose engagement with Liberia’s national oil company, NOCAL, provides a pathway towards an interest in deepwater Block LB-32.

LB-32 covers about 2322km² in the undrilled Harper Basin, an emerging exploration frontier that has attracted French supermajor TotalEnergies.

Initial interpretation suggests it may contain significant portions of the Jupiter and Zeus Upper Cretaceous deepwater fan prospects, giving Bounty a starting point for its own technical assessment.

After quarter-end, Bounty licensed the LB-32 portion of TGS’s Sunfish 3D survey and legacy 2D seismic data, and appointed Molyneux Advisors to assess the block’s exploration potential.

Molyneux’s work will map the fan systems, evaluate potential reservoirs and traps, and assess how much of each target lies within LB-32. The aim is to rank the leads and prospects, guide further exploration and prepare technical material for potential farm-out partners.

The company secured commitments for a placement of about A$3.55m in September and completed an initial A$2.09m tranche in October to support the proposed acquisition and associated work.

At Stockhead we tell it like it is. While Blue Star Helium, Lion Energy and Bounty Oil & Gas are Stockhead advertisers, they did not sponsor this article.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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