TEE Pinpoints First Kansas Hydrogen Well Site
Top End Energy selects its maiden drill location in the same area that attracted $380m to Koloma. The company is using new data from its neighbour to refine its strategy
Top End Energy (ASX: TEE) has pinpointed its first well site in Kansas, marking a decisive step forward in its natural hydrogen strategy.
The company selected the site based on specific geological features known to generate and trap hydrogen.
What makes this particularly interesting is that the selection draws on recent drilling data from Koloma - a heavyweight in the same region that has tested similar areas nearby.
For those who haven't been following this space, Koloma is backed by Bill Gates and Jeff Bezos, with institutional investors like Mitsubishi Heavy Industries and Osaka Gas providing additional firepower. They've been leading exploration efforts in the area and have already drilled multiple successful wells, which speaks volumes about the region's potential.
TEE is steadily advancing its land agreements and engineering work. At 8.6c per share and a market cap of just $20 million, the valuation disparity is striking when you consider that Koloma has raised over US$380 million for a similar play.
That's the kind of asymmetric opportunity that catches our attention.
Why This Well Site Selection Could Be A Catalyst For TEE
Investors will know that this well-site selection marks a significant milestone for the company.
In just over four months, TEE has strategically positioned itself in one of the hottest regions in the world for natural hydrogen. The company is pushing ahead at pace to make the most of this opportunity.
The site sits close to Koloma's recent drill sites in Marshall County, where strong results have already backed the geological model for natural hydrogen in the region. With this data in hand, TEE is doing everything it can to improve the chances of success when drilling.
If TEE can confirm substantial hydrogen flows, it could emerge as an industry leader in this nascent sector, attracting institutional investment and likely driving a substantial share price re-rating.
Natural hydrogen is being hailed as the first new primary energy source in a century. Early movers in this space, like TEE, have the opportunity to gain a significant competitive advantage as the market develops.
“We're encouraged by the release of key data ... including wireline logs, mud logs and drill stem tests from Koloma's 2023/24 drilling program. They provide valuable insights to refine our well design, drilling fluid systems and data acquisition strategy.”
Luke Velterop, Vice President of US Operations
Koloma's Exploration Success Sets a Strong Precedent
Koloma has been instrumental in putting Kansas on the map for natural hydrogen exploration, raising more than US$380 million from some of the biggest names in the industry. This level of investment speaks to the sector's enormous potential.
Koloma's wells - Balsmeier, Carlson, and Hedge Lawn - have provided valuable data on hydrogen movement and accumulation. This knowledge base gives TEE a running start in planning their approach.
The data points to the Nemaha Uplift and Humboldt Fault as key geological structures where hydrogen tends to gather.
TEE's selected drill site shares these same geological characteristics. This strategic positioning offers investors exposure to the region's potential while significantly improving the chances of a successful discovery.
Unlocking the Potential of the Precambrian Basement
One of the key differentiators for TEE is the targeting of the Precambrian basement. This deep rock layer is rich in iron and generates hydrogen naturally through a process known as serpentinisation.
With serpentinisation, water seeps down and reacts with iron-rich rocks, producing hydrogen continuously as a steady and renewable energy source without human intervention.
Kansas offers ideal conditions for this process, with its extensive network of faults and fractures, particularly near the Mid-Continental Rift system. These geological features allow hydrogen to move upward and collect in traps.
Top End Energy’s upcoming well will put this geological model to the test. TEE aims to confirm if these natural processes have created commercially viable hydrogen deposits that could be tapped economically.
TEE's Aggressive Land Expansion: A Masterstroke
Parallel to their drilling preparations, Top End Energy has been aggressively expanding its land position.
TEE already holds 25,000 acres of leases and looks set to hit 30,000 acres soon. The company is clearly targeting land that sits above the most promising geological structures for hydrogen.
Building out this strategic footprint means they'll have more shots at success if either their initial well or neighbouring wells hit significant hydrogen flows. Land values in the entire region would likely spike on positive results from any player.
The timing of this land acquisition strategy is smart. Global energy giants and institutional investors are starting to pay serious attention to natural hydrogen. Getting quality acreage secured early typically means better terms and stronger positioning before competition drives up prices.
What's Next: The Road to Drilling and Beyond
Over the coming months, investors can expect a steady stream of updates as TEE finalises well engineering, secures regulatory approvals, and moves towards spudding its first well.
This initial well carries significance beyond the potential discovery itself. Success would establish TEE as an early mover in what many analysts predict could be the most lucrative new energy markets of the 21st century.
For ASX investors seeking exposure to natural hydrogen, TEE offers an entry point at a market cap that hasn't yet caught up to the scale of the opportunity they're pursuing.