Geologic hydrogen explorer Koloma, with $400 mil in funding, quiet on next step

After announcing plansin 2024 to produce geological, or natural, hydrogen in Kansas, and with almost $400 million in funding, hydrogen explorer Koloma is declining to discuss its next steps following the conclusion of its test drilling program.

"We are not aware of a production well or the plans you reference," Koloma spokesperson Kristen Delano told S&P Global Commodity Insights in a Jan. 23 email. "We are aligned with industry standards and public policies and will share updates when there is meaningful news to share."

Delano's comment followed a Jan. 21 email from her that said, "Koloma has seen encouraging results to date and we continue to expand throughout the United States. We don't comment on where we are exploring and it is fluid based on data and learnings," she said.

While Koloma remains largely mum about its Kansas plans, its operating arm, High Plains Resources, had earlier been more candid. A spokesperson for High Plains, speaking with KCLY radio in rural Clay Center, said that at January and April 2024 town hall meetings with area residents he had discussed the company's drilling efforts.

High Plains' Jason Rayburn told KCLY in January that he had said the company's five-well test well program ran from late 2022 through 2023, and would focus in 2024 on drillingfour-seven test wells in neighboring Washington and Marshall counties along the state line with Nebraska, with hopes for production later in the year.

"The first round of test wells were to gather data and understand the subsurface more," Rayburn said then. "The program this year is intended for production wells, so we will be drilling wells."

In April, after further town hall meetings, Rayburn told the radio station that "High Plains is really encouraged by the test wells that we drilled, which is why we are moving forward with production wells, and we hope to collect more positive information from the 2D seismic operation that will allow us to expand our exploration efforts."

Rayburn in the past week referred all queries about High Plains' exploration and production plans to Kaloma.

In recent years, the potential of natural hydrogen as a decarbonization fuel has attracted significant investment and interest from exploration companies, federal agencies, startups and specialized research units within major oil and natural gas companies. They are assessing how geological hydrogen could impact their global low-carbon hydrogen projects given its potential low-carbon footprint and parity price with fossil-based hydrogen, particularly focusing on exploration opportunities in the US Midcontinent. The US Geological Survey, in fact, unveiled Jan. 16 a map identifying key regions in the US, including the Midcontinent, with potential hydrogen deposits. But global production of geological hydrogen remains vanishingly small, with only small-scale discoveries made.

Denver-based Koloma, meanwhile, has raised $394 million for its exploration efforts, including $245.7 million in February 2024 and $52.4 million in October, according to US Securities and Exchange Commission filings.

"It's a smoking gun that Koloma got $90 million in their initial investment round and then $250 million in their second round," a source told Commodity Insights on conditions of anonymity. "You don't get this kind of money and drill bonkers. One has to have drilled something."

Aaron Mattson, CEO of Mafic Consulting Group, focused on natural hydrogen, described as "significant" High Plains' earlier-announced plans for production, in comments to Commodity Insights,.

"Koloma announced over six months ago, through High Plains Resources, that they had found significant concentrations in one of their wells in Kansas," Mattson said. "The degree to which it can be commercially extracted remains to be seen."