Grand Gulf Energy Ltd. provided an update on the potentially company-making second pure-play helium well, Jesse-2, in the Red Helium project. Jesse-2 is on schedule to spud 12 March 2023, with all long lead items purchased, a drilling rig contract secured and site construction complete, following the approval of the Drill Permit in early January. The conductor rig was mobilised on 6 March 2023 to install the cellar and surface conductor.

A pre-spud meeting with all contractors is scheduled for 8 March 2023 prior to rib mobilisation later this week. The rig mobilisation and rig-up are on schedule to support the 12 March spud date. Aztec Well Servicing Co.

(Aztec) has been contracted to drill the Jesse-2 well at the Red Helium project. Aztec is based approximately 125 miles southeast of the Red Helium project area, in Aztec, New Mexico. Aztec is the preferred contractor of GGE's Drilling Superintendent, Todd Gentles.

Mr. Gentles has previously worked with Aztec, including this exact rig and crew with underbalance drilling and testing procedures, whilst drilling wells at the neighbouring Doe Canyon field. The forthcoming drilling of the Jesse-2 well follows the highly encouraging Jesse discovery (Jesse-1A well) which included a >200 foot logged gross gas column (with 101 feet of independently audited net pay) and exceptional helium concentrations of up to 1% returned to surface, exceeding pre-drill expectation. The Jesse-1A well also encountered a productive and strongly pressured reservoir at 2,465 psi.

Jesse-2 is located 1.5 miles east-south-east of the Jesse-1A discovery well and was selected as the best of three mature prioritised locations on the Jesse structure. The locations were derived from an extensive review of data from six historic wells and Jesse-1A including calibrated 2D seismic to target a structural high location on the Jesse feature to maximise the thickness of the gas pay zone. Based on analogue performance, the Jesse discovery has the potential to support in excess of 20 wells within the areal extent of the closure, given the >200-foot column intersected at Jesse-1A.

Jesse-2 will exclusively target the gas pay zone(s) to minimize the risk of water production, with the planned total well depth terminating at least 50 feet above the identified gas/water contact at Jesse-1A. The drilling program incorporates managed pressure drilling through the primary Leadville formation minimising formation damage. The program allows enhanced mud-gas returns and real-time monitoring of reservoir gas flow and gas compositions using mass spectrometry.

On identification of significant helium inflow, a bottoms-up flow test will be conducted to characterise the reservoir. Helium Offtake partner Paradox Resources LLC (Paradox) is owner of the advanced Lisbon helium processing plant (Lisbon) located 20 miles north of the Red Helium Project. Jesse-2 is immediately adjacent to unutilised pipeline connected to the Lisbon helium plant.

The Company has a Gas Sales & Processing Agreement (GSPA, Offtake) with Paradox which includes the Jesse-2 well. In the event of a successful well, the GSPA provides a path to monetization of the Company's second pure-play helium well, Jesse-2. The GPSA expansion continues a relationship with a proven helium refiner and seller with deep helium processing and marketing experience. The key terms include an 80/20 industry standard revenue split in favour of the producer (GGE) as well as standard tariffs for gathering, compression and processing.

The GSPA expansion represents recognition from Paradox of the significant potential of the Red Helium Project and the technical merits of the potentially company-making Jesse-2 well. Both Grand Gulf and Paradox are participating in ongoing discussions to identify further strategic business opportunities framed by a Strategic Alliance, which includes GSPA expansion and further corporate synergies. Paradox owns over 100,000 net acres and operates over 150 wells in the Paradox Basin in the Four Corners Region of Utah, Colorado, New Mexico and Arizona.

Paradox is operator of 570 miles of operated gas gathering lines (220 miles of which is wholly owned) with four compression stations that feed directly to the Lisbon Valley Gas Plant. The advanced Lisbon Valley Gas Plant is comprised of a 60 million cubic feet per day (mmcfd) treating plant with a 45 mmcfd cryogenic plant capable of liquefaction of 0.5 mmcfd of high purity 99.9995% (5 ½ Nines) helium, that attracts premium pricing for advanced applications such as semiconductor, medical, research, space and defense industries. The plant has capacity for another 0.6 mmcfd of purified 99.989% gaseous helium currently sold to multiple suppliers and direct to downstream retail consumers via Paradox's logistics arm comprising precisely engineered specialist tube trailers.

The Lisbon Plant is also currently sequestering carbon dioxide and is well advanced in the permitting process to qualify for carbon capture tax credits under Section 45Q (Revenue) of the US tax code. The recent Inflation Reduction Act increased the value of carbon dioxide sequestered to $85 per metric tonne, making it a potential material revenue stream for the Red Helium Project.