Imperial Helium Corp. announced positive results from an independent production test analysis by IHS Markit, of the newly identified Sub-Salt Zone in the Company's IHC-Steveville-3 well. The SSZ has a calculated absolute open flow rate of 13.3 mmcf/d, and capability of sustaining production rates of 2.5 mmcf/d for three years before decline.

The SSZ is below the Blow-Out Zone and each are found in both the IHC-Steveville-2 and IHC-Steveville-3 wells. The SSZ and BOZ are two distinct stacked reservoirs with different gas compositions. The SSZ gas is significantly more valuable because it has 18.6% more Helium and because there is essentially no CO2; which means there are no expenses associated with removing the CO2 and putting the acid gas back into the ground.

With production testing of the SSZ complete in IHC-Steveville-3, IHC will move up hole and commence a production test on the BOZ in IHC-Steveville-3, as soon as a service rig is available. The BOZ in IHC-Steveville-3 will undergo a planned 30-day production test consistent with the testing done on the SSZ and the BOZ in IHC-Steveville-2. In addition, the company will conduct a high-flow rate test to confirm the capacity of the BOZ to produce at rates of 5-8mmcf/d as previously demonstrated by the pressure-transient production test of the BOZ in IHC-Steveville-2 last summer. Fixed flow-rate production tests were designed in collaboration with IHS-Markit.

For the SSZ, a low constant production rate of 2.35 mmcf/d using a 18/64 inch (7.14mm) choke for period of ten days was chosen to optimize data collection and ability to observe changes in reservoir pressure. The subtle changes in reservoir pressure provide critical information on reservoir size, quality, and how a reservoir will perform when placed on production. After the flow-period, the reservoir was left undisturbed for 18 days (430 hours) to record the pressure build-up after the well had been shut-in.

The results of IHS Markit's pressure transient analysis from the SSZ in IHC-Steveville-3 are in-line with the Company's expectations and demonstrated excellent characteristics that support future commercial development of that zone in IHC-Steveville-3. The SSZ has very good porosity (13.7%), good permeability (10.5mD), and the capability to drain over five square kilometres (two square miles) from the SSZ in this well alone. Given these results, the Company intends to production test the SSZ within IHC-Steveville-2. The tables below provide a summary of IHS Markit's independent characterization of the two reservoirs. IHC anticipates bringing both the BOZ and SSZ onto production from both the IHC-Steveville-2 and IHC-Steveville-3 wells.

While completing the SSZ in IHC-Steveville-3, the company was able to reduce the well-bore damage associated with the drilling process to -2.7 (optimal is -4.0) using an acid stimulation technique. Given the success in IHC-Steveville-3, the company will use the same approach on both the SSZ and BOZ when the company re-enters IHC-Steveville-2, and hope to significantly improve the skin of +21 currently over the BOZ.