Scirocco Energy Regulatory News (SCIR)

11 August 2021

Scirocco Energy plc

("Scirocco Energy" of "the Company")

Helium One Update

Scirocco Energy (AIM: SCIR), the AIM investing company targeting attractive assets within the European sustainable energy and circular economy markets, notes the below update issued by Helium One this morning.

Highlights:

· Tai-1A completed to a depth of 1121m with helium shows identified in all three target formations

· Helium shows encountered over five intervals in the Karoo Formation.

· A 130m thick claystone unit was encountered above the top Karoo sands, indicating good seal presence for the Karoo reservoir.

· Wireline logging of the uppermost Karoo indicates good reservoir potential with 15-20% porosities.

· Petrophysical analysis indicates no free gas in the uppermost thinly bedded Karoo sands associated with helium shows.

· Helium shows within the deeper and thicker sandstone units of the main Karoo reservoir were not able to be logged due to poor and deteriorating hole conditions.

· Results of Tai-1A to be evaluated and incorporated into our ongoing exploration strategy which may include redrilling of Tai to test identified targets

Tom Reynolds, CEO of Scirocco commented;

"We note the results of this well with interest as it relates to our remaining holding in Helium One. The identification of helium shows across multiple zones is encouraging with regards to confirming the presence of a working helium system in the Rukwa Basin.

Scirocco is very satisfied that the way it managed its historic investment in Helium One locked in firm value for our shareholders and enabled the redistribution of cash into a new investment, which we expect to close out imminently. We also remain encouraged by the long-term potential of our remaining residual holding in Helium One and look forward with interest to the next activity in their exploration programme."

Details

Helium One has completed exploration drilling at its maiden Tai-1A exploration well in the Rukwa Basin. The well has successfully identified helium shows within all three target formations, including five helium show intervals identified in the primary Karoo targets, as well as secondary targets in the Lake Bed and Red Sandstone Formations.

The uppermost Karoo was marked by a thick (130m) claystone sequence, demonstrating seal presence which is supported by our seismic interpretation. Wireline logging of the uppermost Karoo indicates good reservoir potential with 15-20% porosities in thinly bedded sandstone units. It was not possible to log the main Karoo reservoir.

Wireline logging operations commenced after reaching a total depth (TD) of 1121m. Unfortunately, borehole washouts, which are associated with these thinly interbedded sand-claystone sequences, have resulted in a series of ledges to develop in the wellbore. The wireline tools hung-up on these ledges and after several attempts to clean the hole, Helium One were unable to progress the tools beyond 880m.

Wireline data was therefore only available over the uppermost helium show from 824-845m. This helium show was identified in thinly bedded (1-3m) sands within the upper Karoo claystone sequence, and above the better developed, thicker sandstone units of the Karoo Formation. Petrophysical analysis presented no clear indications of free gas within this helium show and anomalous helium in the drilling mud seems to be related to gas-cut-brine. Gas-cut-brine is considered to be formation water saturated with helium, but without helium having formed a separate gas phase.

Without wireline data it is not possible to assess the helium gas-bearing potential of the deeper, thicker, reservoir intervals with demonstrated helium shows in the main Karoo Formation. As no free gas was identified, and due to safety concerns caused by the deteriorated hole conditions, no drill stem test was conducted and no samples of brine or gas have been recovered to surface. 

Whilst Helium One is disappointed not to have identified free gas within the Karoo Formation of Tai-1A, data acquired from this well enhances our understanding of the helium system in the Rukwa Basin. By encountering helium shows in the Lake Bed, Red Sandstone and Karoo Formations, combined with petrophysical analysis confirming the presence of a seal and demonstrating good reservoir potential, we are encouraged that we have identified a working helium system in the Rukwa Basin.

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