American Noble Gas Inc. announced it has agreed to acquire a 40% participation in a farmout agreement (the “Farmout Agreement”) negotiated with a major, well respected, operator relative to its existing oil and gas and brine interests in the Hugoton Gas Field in Haskell and Finney Counties, Kansas. AMGAS will join with three other partners (collectively the “Hugoton JV and/or the “JV”). to explore for and develop oil and gas and brine reserves on the property covered by the Farmout Agreement.

The Farmout Agreement covers drilling and completion of up to 50 wells, with the first exploratory well scheduled to be spudded in April 2022. The Hugoton JV will utilize existing infrastructure assets, including water disposal, existing brine stream, gas gathering and helium processing, as part of the Farmout Agreement. The Farmout Agreement provides the JV with rights to take in-kind, and market its share of helium.

Hugoton JV will be able to market and sell the helium produced, at prevailing market prices, by taking its helium in-kind. The Hugoton JV also acquired the rights to all brine minerals produced, subject to a ten percent (10%) royalty, across all of Finney and Haskell Counties. Brine minerals are harvested from the formation water produced from active, and to be drilled, oil and gas wells and may include a variety of dissolved minerals, including bromine, iodine and magnesium.

The JV and its partners are currently developing proprietary technology with respect to brine mineral recovery which may be an important factor in efficiently harvesting the brine minerals produced under the Farmout Agreement. The first exploratory well is scheduled to commence in April 2022 near Garden City, Kansas with a goal to evaluate an unconventional theory for reinvigorating production from the Hugoton Gas Field. If the Hugoton JV is successful in proving out this unconventional theory, the Company anticipates that it could result in the unlocking of substantial gas and helium reserves embedded in the Hugoton Gas Field that were previously considered depleted.

The Hugoton Gas Field has been a prolific producer of gas and helium for decades.