10-K: Proton Green's St. Johns Field Helium and CO2 Resources Detailed in New Report

An independent assessment of Proton Green's St. Johns Field outlines significant contingent resources of helium and carbon dioxide, with detailed production and economic estimates.

Summary

• William M. Cobb & Associates, Inc. prepared an addendum to their January 17, 2024 helium resource report for Proton Green's St. Johns Field.
• The report categorizes the net helium produced volume as a contingent resource, consistent with prior information.
• The St. Johns Field has an estimated 9,307 BCF of original gas in place, containing 33.4 BCF of helium.
• The total helium produced is estimated at 10.33 BCF, with 8.27 BCF net to Proton Green.
• The report also estimates that 2,472 BCF of total gas will be produced, representing 50.04% of the original gas in place.
• The maximum helium production rate is estimated at 1,296 MCF/D.
• The report treats the helium and CO2 volumes as contingent resources, as defined by the Petroleum Resources Management System (PRMS).
• Contingent resources are potentially recoverable but not currently commercially recoverable due to the absence of a fully budgeted development project beyond the 11-8-30 St. Johns Well.
• The report notes that technical uncertainties have been addressed by prior operators' data gathering and well testing programs.
• The evaluation is based on well data, production test data, and prior studies supplied by Proton Green.
• The report emphasizes that the results are estimates based on geologic and engineering judgment and are not warranted or guaranteed.

Sentiment

Score: 6

Explanation: The document is neutral to slightly positive. It highlights significant contingent resources but also emphasizes the uncertainties and the need for further development. The lack of a fully budgeted development project is a key risk.

Positives

• The St. Johns Field has significant helium resources.
• Extensive data gathering and well testing programs by prior operators have addressed technical uncertainties.
• The report incorporates reliable prior studies into its evaluation.

Negatives

• The helium and CO2 volumes are categorized as contingent resources, not proven reserves.
• The contingent aspect of this resource relates to the current absence of a budgeted development project for the wells beyond the 11-8-30 St. Johns Well.
• The results are estimates based on geologic and engineering judgment and are not warranted or guaranteed.

Risks

• The absence of a fully budgeted development project beyond the 11-8-30 St. Johns Well is a significant contingency.
• Future production volumes may not occur as estimated.
• Volumes may increase or decrease due to future operations or unforeseen geological conditions.
• The report does not review agreements for field development, sales, or permitting requirements.

Future Outlook

The report indicates that commitments to a development project would remove the contingent nature of the resources, potentially leading to the assignment of reserves and increased production.

Industry Context

The report provides an assessment of helium and CO2 resources, which are in high demand in various industries, including space, medical, and manufacturing. The report also notes that the St. Johns Field could be a significant source of helium.

Comparison to Industry Standards

• The report uses the Petroleum Resources Management System (PRMS) to categorize the resources as contingent, which is a standard industry practice.
• The report notes that the helium and CO2 volumes are not subject to SEC or petroleum industry hydrocarbon reserve definitions, which is appropriate given that they are not hydrocarbons.
• The report references prior studies by Kinder Morgan, which is a common practice in the industry to leverage existing data and analysis.

Stakeholder Impact

• Shareholders: The report provides an updated assessment of the company's resources, which may influence investment decisions.
• Employees: The report may impact future development plans and job security.
• Customers: The report provides information about the potential future supply of helium and CO2.
• Suppliers: The report may influence future contracts and supply agreements.
• Creditors: The report may impact the company's ability to secure financing.

Next Steps

• Proton Green needs to secure funding and commit to a development project to convert contingent resources into reserves.
• Further data gathering and well testing programs may be needed to reduce uncertainties.
• Proton Green needs to obtain necessary permits and approvals for the project.

Key Dates

Keywords

helium, contingent resources, St. Johns Field, carbon dioxide, production, reserves, Petroleum Resources Management System, OGIP, development, gas