Australia’s emerging natural hydrogen sector has reached another exploration milestone as D3 Energy announced prospective natural hydrogen resources of up to 88 billion cubic feet across two geological structures in South Australia’s Arckaringa Basin.
While the estimate highlights growing industry interest in naturally occurring hydrogen, the project also underscores the considerable uncertainty that continues to distinguish geological hydrogen from more established low carbon hydrogen pathways.
D3 Energy said independent certification by technical consultancy Sproule ERCE identified prospective natural hydrogen resources at the Hydrohelix and Cootanoorina prospects within exploration permit PEL121. The assessment also identified associated helium and methane resources, reflecting the geological conditions that often allow these gases to accumulate together.
The company estimates that the prospective hydrogen resource is equivalent to approximately 136,000 tonnes under standard conditions. Drilling and testing activities are expected to begin by 2027, while D3 has initiated a farm out process to secure a development partner capable of funding future exploration and appraisal work at the Hydrohelix prospect.
The announcement adds to increasing exploration activity focused on natural hydrogen, also known as geologic or white hydrogen. Unlike green hydrogen, which is produced through electrolysis using renewable electricity, or blue hydrogen, which relies on natural gas combined with carbon capture, natural hydrogen is generated through geological processes within the Earth’s crust. If commercially recoverable deposits can be identified consistently, production could avoid many of the capital intensive facilities required by manufactured hydrogen pathways.
Despite growing interest, prospective resource estimates should not be interpreted as commercially recoverable reserves. In petroleum and mining industries, prospective resources represent estimated quantities that may exist in unexplored geological formations but require drilling to confirm their presence, quality, flow characteristics, and economic viability. Exploration success rates remain uncertain because natural hydrogen exploration is still at an early stage compared with decades of conventional oil and gas development.
Commercial extraction presents additional challenges beyond identifying hydrogen bearing formations. Unlike natural gas reservoirs, geological hydrogen systems remain poorly understood, with significant questions surrounding recharge rates, reservoir continuity, production decline, and long term resource sustainability. Exploration techniques, reservoir models, and production methods continue to evolve as relatively few wells worldwide have specifically targeted natural hydrogen.
The inclusion of helium alongside hydrogen may improve the commercial outlook if recoverable concentrations are confirmed. Helium remains a strategically important industrial gas used in semiconductor manufacturing, medical imaging, aerospace, and scientific research, with constrained global supply supporting relatively strong market values. Co production of multiple gases could strengthen project economics if extraction technologies prove technically feasible.
Australia has emerged as one of the most active jurisdictions for natural hydrogen exploration. Earlier this year, Prominence Energy commenced exploration across approximately 64,000 square kilometers in South Australia targeting both natural hydrogen and helium accumulations. The state’s geological setting, combined with an established regulatory framework for energy exploration, has attracted increasing attention from companies seeking early positions in the sector.
Even as exploration accelerates, natural hydrogen remains significantly less mature than conventional hydrogen production technologies. Regulatory frameworks specific to geological hydrogen are still developing in many jurisdictions, while infrastructure for production, transportation, and commercialization remains largely absent. Investors also face uncertainty regarding production costs because few commercial scale projects have demonstrated sustained hydrogen extraction under real operating conditions.
