Maiden hydrogen drilling in South Australia comes up trumps

Natural hydrogen has been confirmed in a maiden drilling campaign in South Australia, sending the discoverer's shares higher.

Gold Hydrogen managing director Neil McDonald and company chair Alexander Downer.

Gold Hydrogen shares have surged after a maiden drilling program in South Australia has confirmed the presence of a natural hydrogen field.

The company’s first drill hole on the Yorke Peninsula in South Australia has confirmed the presence of natural hydrogen, which was first detected accidentally in an oil drilling campaign almost 100 years ago.

Gold Hydrogen told the ASX on Tuesday it had discovered hydrogen at 73.3 per cent purity, which correlates with the 76 per cent purity from the historical drilling, and the strike occurred at the expected target depth.

“The find at the Ramsay 1 bore is validation of Gold Hydrogen’s theory that hydrogen forms naturally from water reacting with rock formations on its tenement area of the Yorke Peninsula,’’ the company told the ASX.

“In a major bonus to Gold Hydrogen, helium was also detected, at 3.6 per cent air corrected at 890m.

“This is a relatively high concentration of helium, which is rare and valuable and is set to become a significant value-add to the project.’’

Gold Hydrogen said the helium was a potential boon given the gas could not be manufactured, and global supply was declining.

“It currently trades upwards of $US600 per thousand cubic feet, which is up to 200 times more than liquefied natural gas,’’ the company said.

“Because of this it is being produced from as little as 1 per cent purity in some places.’’

Gold Hydrogen managing director Neil McDonald said although the company was only in the early phase of exploration drilling and testing, the dual finds were extremely positive.

“It is incredibly exciting to have the historic hydrogen results validated, and the helium find on top of that is a wonderful bonus,’’ he said.

The company is progressing planing for a second well in the area, while analysis of the data from Ramsay 1 continues.

The company said the maiden drill hole went a long way to proving up Gold Hydrogen’s geological theories.

“The tests proved exactly what our geologists hoped they’d find,’’ Mr McDonald said.

“This has huge potential for the country as we move to carbon-neutral goals.’’

One of the key findings was the discovery of a major fracture zone in the Parara limestone, which the company believes is key for the migration of hydrogen from deeper sources to shallow zones.

“Independent estimates before drilling had Gold Hydrogen’s potential hydrogen field at a size that could power Adelaide for 40 years,’’ the company said.

Gold Hydrogen said natural hydrogen, which is already in limited use overseas, is expected to cost as little as a fifth of the cost to make “green” hydrogen using renewable energy.

Gold Hydrogen shares traded as high as 31c in early trade before settling to be 5.8 per cent higher at 27.5c.

Gold Hydrogen listed in January after raising $20m at 50c per share.