Nitrogen Project

Highlands has discovered nitrogen at its 800-acre landholding in Kansas.

Flow tests from the Barret 1-14B well, an existing wellbore within its landholding which Highlands re-entered and re-completed in June 2018, indicated initial high nitrogen purity levels – over 99.59%.

Of further significance is that the flow rate of the well has increased to 2,581 Mcfpd over time, compared to the initial flow test of 1,769 Mcfpd rate. At these indicative levels of production Highlands would be in a position to secure all of its nitrogen supplies for its DTU needs more economically.

During Highlands’ successful Parent Well Protect test in the Permian Basin, 8,762 MCF of nitrogen
was purchased for a cost of US$79,200 ($9.04 per MCF). Also, during Highlands successful Parent Well Protect test in the Piceance Basin, 12,000 MCF of nitrogen was purchased for a cost of $140,400 ($11.70 per MCF).

In addition, there are multiple other markets for nitrogen. For example, Highlands estimates that approximately 16 million bushels of corn are grown in the counties surrounding its project. Commercially produced corn requires approximately 1 lb of nitrogen (in the manufacture of ammonia-based fertiliser) per bushel. Highlands is already engaged in talks with parties across industryincluding industrial, oil and gas and agricultural users to explore such opportunities.