TSX.V: DME
U.S. OTC: DMEHF
Frankfurt: QM01
VANCOUVER, BC, July 6, 2023
/CNW/ - DESERT MOUNTAIN ENERGY CORP. (the "Company") (TSXV:
DME) (U.S. OTC: DMEHF) (Frankfurt: QM01) From the President of
the Company. The Company is pleased to announce that it
has closed on the purchase of the West Pecos Slope Abo Gas Field
and gas gathering system located in Chaves County, New Mexico. The Company has
assumed operations and the revenue stream from the existing wells.
The Company secured a contract for the near term to rent a
compressor to boost natural gas sales during line pigging and plan
for increasing gas flows. That compressor was hooked in and was
online compressing gas into the sales line on 07/01/23.
Since the commissioning of the McCauley Helium Processing
Facility in January 2023, the Company
has been working diligently towards declaring commercial production
of Helium from the plant. However, despite lengthy engagement with
the Arizona regulatory
authorities, the Company has become frustrated with repeated delays
and long lead times associated with enhanced recovery permitting.
At this point in time, the Board and Management have come to a
decision to take advantage of the inherent flexibility of their
proprietary plant design and will move the McCauley Processing
Facility to its newly acquired West Pecos Abo Gas Field in
New Mexico.
"The Company's strong financial position coupled with our robust
modular design make this agile move possible," states CEO
Robert Rohlfing. "Moving the plant
to the West Pecos Slope Abo Gas field allows us to produce helium
and condensates near term. Where most plants are designed to meet
only the specific needs of a given area and subsequently, their
inherent fixed design preclude moves of this nature."
Current estimates for relocation of the plant are between 8-12
weeks, including reassembly and hookup. The primary permitted
compressor location has the required air quality permits in place,
sufficient for all intended operations. The Company is moving ahead
with finalizing plans to pig flow lines to lower flow gathering
system line pressures and will then begin removing the most
critical choke points.
As stated in the previous press release on 06/19/23, the geologic team is evaluating initial
wells for optimization to maximize helium production. DME's goal is
to target where independent gas analysis tests show helium values
above 0.700% or where combined with low nitrogen, high condensate
values and high BTU ratings. The Company has not independently
verified the gas analysis provided by the seller. Those gas
analysis tests are required to be conducted by an independent
third-party testing laboratory on a yearly basis, this is done to
ensure proper payments are made to the mineral and well owners by
the gas purchasing company. DME will be conducting their own
independent tests on all producing wells in accordance with rules
and regulations. The Company anticipates initial helium production
to average 0.50% until well workovers and optimization as
previously described, have been completed. DME's modular plant
design can operate in a wide and fluctuating helium percentage
environment. Under current contracts, the Company will not be due
to pay royalties on any inert gases recovered through plant
operations. The condensate and BTU values vary widely depending on
location within the field and proximity to the compressor facility.
Initially, The Company intends to maintain significant cash on hand
through the judicious use of minimal funds and will use cash flow
to complete ongoing scheduled work.
The Company's workover rig will be moved to the West Pecos Abo
Gas Field. Discussions have begun with a local company to generate
revenue when not being utilized by DME for well work. In this area,
it is not uncommon to have a 6-9 week wait period to schedule a
workover rig. The Company's strong financial position resulted in
the ability to acquire a dedicated rig significantly below market,
which allows quality and timely work to be completed in the best
interest of all shareholders of the Company.
At this point in time, all planned drilling operations in the
Holbrook Basin will halt and the
Company will continue to work with the Arizona regulatory authorities as they modify
and develop the state regulations specific to the helium industry.
The Company will maintain their leases and wells in good standing
and plans to re-enter the state with a new second facility once
assurances and permits have been granted. While the order of
production has shifted from Arizona to New
Mexico, the capital raised in Q1 this year was already
earmarked for a second facility (among other uses), and as such the
overall development plan for Desert Mountain Energy has not altered
in a meaningful way to the one that was previously set out to
shareholders. In the meantime, the Company has already been
contacted by a local power provider in NE
Arizona, who will seek to tie the existing solar facility at
the McCauley Plant site into the local grid until it is needed for
the second facility.
ABOUT DESERT MOUNTAIN
ENERGY
Desert Mountain Energy Corp. is a publicly traded resource
company primarily focused on exploration, development and
production of helium, hydrogen and noble gases. The Company is
primarily looking for elements deemed critical to the renewable
energy and high technology industries.
We seek safe harbor.
"Robert Rohlfing"
Robert
Rohlfing
Exec Chairman & CEO
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release. The statements made in this press release may contain
certain forward-looking statements that involve a number of risks
and uncertainties. Actual events or results may differ from the
Company's expectations.
Cautionary Note Regarding
Forward-Looking Statements
This news release contains "forward-looking statements"
within the meaning of the United States Private Securities
Litigation Reform Act of 1995 and "forward-looking information"
within the meaning of applicable Canadian securities legislation.
Such forward looking statements and information herein include but
are not limited to statements regarding the Company's anticipated
performance in the future the planned exploration activities,
receipt of positive results from drilling, the completion of
further drilling and exploration work, and the timing and results
of various activities.
Forward-looking statements or information involve known and
unknown risks, uncertainties and other factors that may cause the
actual results, level of activity, performance or achievements of
the Company and its operations to be materially different from
those expressed or implied by such statements. Such factors
include, among others, changes in national and local governments,
legislation, taxation, controls, regulations and political or
economic developments in Canada
and the United States; financial
risks due to helium prices, operating or technical difficulties in
exploration and development activities; risks and hazards and the
speculative nature of resource exploration and related development;
risks in obtaining necessary licenses and permits, and challenges
to the Company's title to properties.
Forward-looking statements are based on assumptions
management believes to be reasonable, including but not limited to
the continued operation of the Company's exploration operations, no
material adverse change in the market price of commodities, and
such other assumptions and factors as set out herein. Although the
Company has attempted to identify important factors that could
cause actual results to differ materially from those contained in
forward-looking statements or information, there may be other
factors that cause results to be materially different from those
anticipated, described, estimated, assessed or intended. There can
be no assurance that any forward-looking statements or information
will prove to be accurate as actual results and future events could
differ materially from those anticipated in such statements or
information. Accordingly, readers should not place undue reliance
on forward-looking statements or information. The Company does not
intend to, and nor does not assume any obligation to update such
forward-looking statements or information, other than as required
by applicable law.
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content:https://www.prnewswire.com/news-releases/desert-mountain-energy-provides-update-on-the-arizona-projects-and-closing-on-the-initial-new-mexico-project-301870984.html
SOURCE Desert Mountain Energy Corp.