Helium One confirms free gas in Colorado drilling campaign, boosting US helium prospects

How Has the Jackson-27 Well Strengthened Helium One’s US Operations?

Helium One Global Ltd has confirmed the presence of free gas at the Jackson-27 development well, marking a significant step in its Colorado-based Galactica-Pegasus helium development project. The AIM-listed helium explorer, which holds a 50% working interest in the project operated by Blue Star Helium Ltd, announced that the well was successfully drilled to a total measured depth of 1,183 feet. Wireline logging confirmed free gas in the formation, with the well exhibiting natural gas flow both during drilling and at target depth. The result affirms the presence of gas-saturated sands in the Lyons Sandstone Formation and supports the ongoing commercialisation efforts for the Galactica project.

According to Helium One, Jackson-27 encountered approximately 60 feet of high-porosity (22–26%) gas-bearing reservoir rock within the Upper Lyons Sandstone. The quality of this reservoir mirrors that of previous wells in the same region, including Jackson-29, Jackson-31 and Jackson-4, which have demonstrated similar flow characteristics. The company’s CEO indicated that this consistency in flow rates and helium-bearing zones confirms robust reservoir communication across the formation and aligns with the broader production strategy for the development.

What Role Does the Lyons Sandstone Formation Play in Helium Development?

The Lyons Sandstone Formation, the geological target of the Jackson-27 well, is a well-characterised stratigraphic unit in Colorado’s subsurface. Known for its high porosity and potential for gas storage, the formation has become central to the development of commercial helium extraction in the region. Jackson-27 drilled into the top of the Upper Lyons Sandstone, which is believed to be part of a continuous, gas-saturated column extending into the Lower Lyons.

Significantly, drilling data revealed no water ingress within the target zone, which enhances the viability of long-term helium extraction. Petrophysical interpretations based on surrounding offset wells further support the reservoir’s capacity and potential for sustained production. Helium One has also indicated that the wellhead installation is progressing, with surface pressure readings and flow testing expected imminently. Initial gas samples taken during air drilling are now being analysed to determine helium and CO₂ concentrations, although results will be corrected to account for air contamination.

What Does This Mean for Helium One’s Broader Exploration Strategy?

The success at Jackson-27 is part of a broader drilling campaign that has, to date, shown consistent performance across several wells in the Galactica Project. As a result, Helium One expects to transition Jackson-27 into production following successful flow tests. The well will be completed and tied into local production infrastructure, pending test outcomes. Drilling equipment is already being prepared for mobilisation to the next well site, Jackson-2, which is under active pad construction.

This development reflects Helium One’s dual-continent exploration strategy. In addition to its US operations, the company continues to advance its Rukwa and Eyasi projects in Tanzania. The flagship Rukwa Project, situated in the southern Rukwa Rift Basin, recently entered an appraisal stage after the 2023/24 exploration campaign confirmed a helium discovery. The Itumbula West-1 well flowed 5.5% helium to surface in an extended well test in Q3 2024, underscoring the region’s potential.

Helium One subsequently filed a Mining Licence application with the Tanzanian authorities, securing a 480 km² concession in March 2025. This move not only enables the commercial development of Rukwa but also bolsters the company’s ambition to become a global helium supplier amid a tightening global supply landscape.

How Strategic Is the Galactica-Pegasus Joint Venture for US Helium Supply?

The Galactica-Pegasus project is part of a broader development area discovered by Blue Star Helium in 2022, strategically located in Las Animas County, Colorado. The project offers multiple commercialisation pathways and has emerged as a focal point in addressing the constrained global helium market. Under a farm-in agreement, Helium One is funding the initial US $450,000 of the Jackson-27 well costs, sharing development risk while securing exposure to a high-grade asset.

The neighbouring Red Rocks project, owned by a third party, adds further relevance by reinforcing the geological potential of the area. The presence of multiple helium development efforts within close proximity improves regional infrastructure opportunities and supports the long-term feasibility of commercial-scale extraction. The natural synergy between adjacent helium fields also opens up avenues for collaboration on pipeline access, liquefaction, and transportation solutions.

What Is the Market Sentiment and Stock Outlook for Helium One and Blue Star?

Investor sentiment towards both Helium One Global and Blue Star Helium has been cautiously optimistic following recent drilling updates. Helium One Global Ltd, trading on the AIM under the ticker HE1, has seen its share price rebound to 0.94 GBX from a 52-week low of 0.50 GBX. On the OTCQB in the United States, it trades under the ticker HLOGF. Analysts have adjusted their outlook to a “Hold/Accumulate” rating, encouraged by the company’s drilling milestones, despite its current non-revenue status and a reported trailing twelve-month loss of $7.63 million.

Blue Star Helium Ltd, listed on the ASX under BNL and on the OTCQB under BSNLF, is similarly attracting speculative interest. Its share price recently stood at AUD 0.008, within a volatile 52-week range of AUD 0.003 to AUD 0.012. The company reported a net loss of AUD 13.06 million in 2024, reflective of ongoing exploration expenditure. Despite its small market capitalisation of around AUD 16.17 million, Blue Star’s joint venture alignment with Helium One adds strategic depth to both operators’ helium development efforts.

There is limited institutional flow data available given the early-stage nature and small-cap status of both companies. However, trading activity around key announcements suggests increasing retail investor engagement. Given the inherent volatility and risk in exploration stocks, industry experts recommend a cautious “Hold” posture, with upside contingent on flow test results, regulatory milestones, and off-take agreements.

How Is Helium One Positioned for 2025 and Beyond?

The next phase for Helium One involves critical infrastructure work at Jackson-27 and ongoing drilling at adjacent sites within the Galactica-Pegasus project. The company is also expected to advance development planning for its Tanzanian Rukwa asset following the grant of the Mining Licence. As both projects evolve, Helium One’s dual-market positioning—leveraging high-concentration helium seeps in East Africa and scalable production potential in Colorado—offers a unique hedge against regional risk and a potential gateway into industrial helium supply chains.

In a market increasingly constrained by geopolitical disruption and declining legacy production, Helium One’s portfolio and technical progress place it in a favourable position to supply high-purity helium to global markets. The coming months will be pivotal, as investors look for data from flow testing, updated reserve estimates, and clarity on production timelines.