IACX Energy Announces Gaseous Helium Sales From Its Proprietary, Small-Scale Processing Unit Near Otis, Kansas

DALLAS, May 7 /PRNewswire/ -- Dallas-based midstream natural gas company, IACX Energy, has commenced operations and sales on what is believed to be the world's smallest, mobile, economically viable helium purification plant for natural gas applications. The plant is located near the community of Otis, Kansas (center of the state), and it is being operated in unison with three IACX nitrogen rejection units (3 MMcf/d -of total inlet capacity). Presently, the plant is polishing approximately 15 to 30Mcf/day of helium which is then compressed to 2,800 psi and stored in high pressure tube trailers for transport. Helium is sold on fixed, 'take-or-pay' contracts and the stated BLM price for crude helium today is $62.25/Mcf.

Much of the natural gas produced in this part of Kansas is associated with higher-than-average percentages of helium (1.5% to 2%) which is sourced from deep, basement rock. Helium migrates through the various sedimentary strata and is trapped in the same reservoirs as fossil derived oil and/or natural gas. Throughout much of the 20th Century, natural gas from Kansas' massiveHugoton field yielded the bulk of the world's helium supply. During the earlier years of flush production, large processing facilities were utilized to remove undesirable components from the raw gas (nitrogen, CO2, H2S, and NGLs) for conventional pipeline sales as well as to remove and purify associated helium gas; however, as these and other helium-laden natural gas reserves continue their inevitable decline, large-scale facilities have become (or are becoming) underutilized and increasingly inefficient. As a consequence, many historical sales points for helium-rich gas are being closed or curtailed by gas purchasers, and production of this rare and valuable gas continues on a sharp downward trend.

Helium is a scarce, valuable and non-renewable gas. Most producers are unaware of the value of helium that may be associated with their natural gas volumes. Most are also surprised to learn that helium has a wide assortment of important uses outside of the ubiquitous balloon market. Helium is an indispensable component of many high tech applications including MRI machines, semiconductor and fiber optic manufacturing, NASA's space program, etc. Because of the combined realities of increasing demand and dwindling supplies, the near-to-long term outlook for helium is that of alarming scarcity. As all natural gas volumes in the world possess at least some level of associated helium, the decision to capture, purify and sell this gas can be a simple proposition for any company wishing to augment a project's cash flow.

Helium aside, more and more volumes of natural gas with higher-than-average levels of other inert gases, such as nitrogen and CO2, are becoming stranded or otherwise non-producible due to tightened sales line specifications. Company CEO, Scott Sears, said "this Otis project represents a re-emergence of recently shut-in gas volumes due to its nitrogen and helium content. Typically, where there's helium in natural gas, the levels of associated nitrogen are also higher, reducing the overall Btu value of the gas and making it hard to sell into conventional sales lines. The Otis project is in its infancy and IACX's nimble assets allows for the staging of a project's growth by adding processing capacity only when it is needed. At Otis, we started with one nitrogen unit, and now we have three, plus the helium plant. It's best to grow a project on cash flow rather than on rosy expectations, and we fully expect to outgrow all of these plants soon. Our intent is to start small, though not to stay small." He also noted, "In these days of depressed natural gas prices, added helium sales can really help a project's economics, even with smaller volumes."

Aside from the Otis site, IACX has other operating applications in Texas, Oklahoma, Nebraska and other locations in Kansas.

IACX is a Dallas, Texas based midstream natural gas company with field offices in The Woodlands and Vernon, Texas. It designs, manufactures, deploys and operates a proprietary fleet of gas separation assets that are small scale and mobile. It has been capitalized with $20MM of equity capital from Haddington Ventures, a Houston, Texas based private equity firm that focuses on the midstream natural gas space. As of the date of this press release, IACX has sixteen Units fabricated, holds no debt and remains aggressive and opportunistic despite this period of depressed commodity prices.

For more information, please contact IACX at 972-960-3210 or visit its website at www.iacx.com. Haddington Ventures can be reached at 713-532-7992 or visit its website at www.hvllc.com.

    Scott Sears
    IACX Energy
    972 960 3210
    Fax 972 960 3215

James Lam
Author: James Lam