M3 Helium plans new facility at Rost wells to boost helium production, scalability, and market advantage amid global supply constraints.
Mendell Helium has announced that M3 Helium Corporation (“M3 Helium”) has received a non-binding proposal from a leading helium producer to install specialized equipment at its Rost 1-26 well (“Rost”) and the nearby Rost Twin well in the Fort Dodge region of Kansas, USA. This proposed facility is intended to enable the recovery and commercial sale of helium from both wells, marking a potentially significant step in expanding M3 Helium’s production capabilities.
The proposed facility would initially be designed to process approximately 1,000 thousand cubic feet (Mcf) of raw gas per day, with an estimated helium concentration of around 5%. Based on this composition, the expected helium output would be approximately 50 Mcf per day during the first phase of development. This initial phase reflects a scalable approach, as the second phase of the project is expected to allow for expansion to accommodate additional production from future wells in the Fort Dodge region. Such an expansion would increase throughput and potentially enhance helium output in response to growing demand.
Previously, on 27 June 2024, Mendell Helium announced that it holds an option to acquire M3 Helium, which currently operates six producing wells in Kansas. While this acquisition is not guaranteed, both companies have agreed to extend the deadline for exercising this option to 30 April 2026. The outcome of this potential acquisition remains uncertain, as does the possibility of successfully completing a re-admission process for the enlarged group.
According to the proposal, M3 Helium would collaborate with a third-party helium processing company responsible for installing and operating the recovery equipment. M3 Helium’s responsibilities would include providing adequate space at the Rost site for the installation of pressure swing adsorption (PSA) systems and compression units, as well as ensuring access to an existing three-phase power supply. Additionally, M3 Helium must supply a gas stream suitable for PSA processing, which may require some level of pre-treatment before processing.
The financial structure outlined in the proposal includes processing fees based on either a fixed monthly charge or a percentage of helium revenues, whichever is greater. There is also an additional marketing fee. This arrangement is designed to reduce incremental costs as production levels increase, thereby improving overall efficiency and profitability. The agreement is proposed to have an initial term of four years, with the possibility of renewal thereafter.
Once finalized, the new facility is expected to be installed within approximately four months, depending on equipment availability and lead times. During this period, M3 Helium will continue to operate its existing purification systems. Some redundant equipment at the Rost site, including its own PSA unit, may be redeployed to support future drilling operations.
Leadership has emphasized that this proposal validates the operational potential of the Rost wells and highlights the strategic importance of increasing helium production amid global supply constraints. The collaboration could provide a competitive advantage by enabling on-site purification and direct market access for helium.
