American Noble Gas farms in to Hugoton gas field

American Noble Gas Inc. acquired 40% interest in Hugoton gas field operations in Haskell and Finney Counties, Kan., in a farmout agreement. It will join with three other partners in a Hugoton JV to explore for and develop oil, gas, and brine reserves covered by the farmout.

The farmout covers drilling and completion of up to 50 wells. The Hugoton JV will use existing infrastructure, including water disposal, existing brine stream, gas gathering, and helium processing, as part of the agreement. Hugoton JV will be able to market and sell the helium produced, at prevailing market prices, by taking its helium in-kind.

The Hugoton JV also acquired rights to all brine minerals produced, subject to a 10% royalty, across all of Finney and Haskell counties. Brine minerals are harvested from the formation water produced from active, and to be drilled, oil and gas wells and may include a variety of dissolved minerals, including bromine, iodine, and magnesium. The JV and its partners are currently developing proprietary technology with respect to brine-mineral recovery to efficiently harvest brine minerals.

The first exploratory well is scheduled to spud April 2022 near Garden City, Kan., to evaluate potential to produce substantial gas and helium reserves embedded in Hugoton gas field that were previously considered depleted. The Hugoton JV suspects remaining gas and helium reserves exist in the other previously unexplored layers which will require targeted stimulation.

Hugoton Gas field contains 7,128 wells and produced 35 bcf of gas in 2021. Remaining reserves are estimated to be about 28 tcf. It currently ranks second in cumulative natural gas production and eighth in estimated total reserves globally.