Calima Energy Ltd’s (ASX:CE1) (OTCMKTS:RLTOF) (FRA:R1Y) drilling program for the Gemini 1, 2, 3 and 4 development wells in Alberta, Canada is progressing well as the oil price hovers above the US$70 mark.
The company has finished drilling the second well or Gemini 2 well, of the 4-well Sunburst horizontal drilling program.
Calima has drilled the well within 7 days and drilling costs came in about C$100,000 under budget, at C$675,000.
The well was drilled to 1,686 metres (measured depth), with 486 metres of horizontal ‘open hole’ after the intermediate casing point (ICP).
Oil and gas shows were excellent throughout the reservoir that was drilled.
Gemini 1
After further 3D seismic interpretation, refinement and utilising the geological data received from drilling Gemini 1, the geoscience team have determined that the productivity of Gemini 1 can be further optimised by drilling a second horizontal leg out of the same intermediate casing.
With the Bonanza rig less than 1 kilometre away from the well site, the decision was made to undertake the work now for an incremental cost of C$350,000.
The Bonanza rig #8 has now moved back to Gemini 1 well location, and the work is anticipated to take 3 days to complete.
Upon completion of the additional horizontal leg, the rig will move to the Gemini #3 location, which is about 15 kilometres away.
Top-tier Sunburst program
Calima Energy CEO and president Jordan Kevol said: “I am pleased with the solid progress of the Gemini drilling campaign and happy we are able to efficiently optimize the Gemini 1 well whilst the rig is close by.
“Calima has committed to drilling an additional well in the campaign and continues to review adding one more Sunburst well.
“With the oil price above US$70 WTI the company is very enthusiastic about completing our top-tier Sunburst program.”
Gemini 3 and 4 wells
Gemini 3 is going to be drilled on a multi-well pad, that is designed to also accommodate Gemini 4.
After the two wells are drilled, completed and equipped, they will both be tied into the Blackspur oil processing facility that is on the same section as the multi-well pad.
According to the company, it is ‘economies of scale’ like this that help keep costs low for Calima in both of its core areas of Brooks and Thorsby.
Calima always aims to either drill wells from existing well pads with the ability to have an on-lease tie-in, or else drill multiple wells at a time on a new pad, to create efficiencies, and keep costs low.
The company has ample room at its existing oil processing facilities for all of the production for these new wells, as well as gas takeaway solutions through third parties for the associated gas from the drilling of these new wells.
Gemini 5 Well
With the continued strong WTI oil and AECO natural gas pricing, the company is reviewing plans to add one additional Sunburst well bringing the Sunburst Well Campaign to 5 wells.
This additional well is expected to be drilled in early July 2021 and Calima continues to add more locations to its Sunburst count of 143 sites in the Greater Brooks Area, through continued mineral leasing, and participation in Crown land sales.
Sunburst wells
The Sunburst wells being drilled are conventional horizontal wells, meaning they require no stimulation such as hydraulic fracturing.
The true vertical depth (TVD) of the target Sunburst zone is around 1,000 metres and the average lateral length of the horizontal section is 775 meters.
The combination of the shallow target depth, relatively short horizontal length and lack of need for stimulation keep the estimated cost for each well to be around C$1 million.