Blue Star Helium Limited provided an update across itskey helium business activities in Las Animas County, Colorado. As previously announced, Blue Star hasreceived the approved permit to drill for its maiden Enterprise 16#1 helium explorationwell.Blue Star understands that this represents the first approved permit to drill for a helium well inColorado, and the first approved drilling application of any type in Las Animas County, sincechanges to the State permitting landscape were enacted in January 2021. Drilling of Enterprise 16#1 is expected to commence in February.

This minor delay is solely afunction of preferred rig logistics. The drill pad preparation at the location is complete and ready toreceive the rig.Budgeted dry-hole costs for drilling of the Enterprise 16#1 well remain less than US$300,000.Area of Mutual Interest: Sammons 315310C well permitAs previously announced, Blue Star (50%) hasexecuted an agreement to jointly develop helium leases in an Area of Mutual Interest (AMI) withprivate entities, Vecta Oil and Gas Ltd. (Vecta) (25%) and Prospero Oil and Gas LLC (Prospero)(25%), in Las Animas County, Colorado. The AMI includes Blue Star's Serenity prospect, whichis located immediately to the south-east of its Galactica and Pegasus prospects.Vecta, the operator of the AMI, currently has Form 2A applications for four helium exploration welllocations within the AMI that are significantly advanced.

Blue Star has been informed that theapproval hearing for these wells has now been moved to 16 February 2022. The first of these wells is targeted to commence drilling as soon as permittingand rig mobilisation allows, which is anticipated to be during April. As part of the Participation Agreement, all parties have agreed to participate for their respectiveworking interest shares in the drilling of the Sammons 315310C well.

Drilling and evaluation ofthis well is expected to cost less than US$150,000, net to Blue Star.Blue Star exploration well permittingBlue Star has submitted new drilling location permit applications (Form 2As) for four further heliumexploration wells, State 35 and State 36 (Pegasus prospect) and State 9 and State 16 (Galacticaprospect).Final approved permits to drill (Form 2) for these four prospective wells are targeted for receipt bymid-CY2022.Blue Star also expects to submit a further five Form 2A well location applications during First Quarter CY2022on the Voyager prospect. The selection of these well locations is heavily informed by the heliumbearing gas column identified in the BBB#1 water well. As a result of recent and planned permitting activity during the current quarter, Blue Star isexpecting, at quarter end, to have an interest in 14 wells that are permitted or under permitting:Enterprise: 1 permitted well (Enterprise 16#1, 100% interest), expected to be drilled in February Serenity (AMI): 4 permitted wells (50% interest), Sammons 315310C well expected to be drilled in April; Pegasus: 2 wells under permitting (State 35 and State 36, 100% interest); Galactica: 2 wells under permitting (State 9 and State 16, 100% interest); Voyager: 5 wells under permitting (100% interest)In addition, preliminary survey work is underway for an additional 33 potential drilling locationsacross the portfolio as part of the Company's rolling permitting strategy.