Helium explorer D3 Energy (ASX: D3E) has identified gas in the NGT245D well at its Nooitgedacht project, located within the ER315 permit in the Free State province of South Africa.

Following a brief weather-related delay, both the NGT245E and NGT245D wells have been successfully cased and cemented at the Nooitgedacht project. As previously reported, gas was observed flowing to surface at NGT245E while drilling.

Both wells target faulting and associated fractures in the Ventersdorp and Witwatersrand formations, aiming to assess reservoir deliverability and gather additional data on helium and methane concentrations.

Managing Director and CEO David Casey said that, given the extremely low pressure at this location, it is unknown how much time the reservoir will need to normalise ahead of future testing following drilling and completion operations.

"It's pleasing to have completed another drilling program safely on time and on budget, and even more pleasing to have encountered gas in both wells while drilling, which was unexpected given the extremely low reservoir pressure in this area compared to those used during drilling," Mr Casey said.

"Notwithstanding this, and unlike our wells to the south, it will take some time before the impact of drilling and completion operations on the reservoir dissipates and further testing can be undertaken," he added.

D3 Energy holds a 479,409-acre land position across South Africa's Free State Province, comprising ER315, PR016, Exploration Right Applications ER386, ER391, ER392 and ER393, and Technical Cooperation Permit TCP273.

The company's flagship ER315 permit has delivered independently verified helium concentrations of up to 8% and is the subject of a Production Right Application (PR016) currently under assessment by South Africa's Petroleum Agency SA (PASA).

Helium, a non-renewable gas used in cryogenics for MRI machines, semiconductor manufacturing, and scientific research, has in recent years been subject to supply tightness as a small number of producing countries and facilities dominate global output, which has driven exploration interest in new sources such as southern Africa's Free State helium province.

The initial Production Right Application area covers 15% of ER315 and approximately nine per cent of D3's total exploration right acreage, with the balance of the land position, including ER386, representing the company's broader appraisal and development pipeline.

ER386 is contiguous with ER315 and lies within the same Virginia Fault structural corridor that hosts D3's certified reserves and contingent resources at ER315 and PR016.

Key milestones ahead for the company include the reservoir normalisation and subsequent testing of the Nooitgedacht wells, which is expected to provide data on helium and methane concentrations and reservoir deliverability, as well as PASA's assessment of the PR016 Production Right Application, which would govern the company's ability to move toward production on the applied-for area.

On the ASX, D3E shares closed down 1.52% at 32.5 cents, giving the company a market capitalisation of $49.86 million.

Source: The Market Online