Calima Energy Ltd (ASX:CE1) has begun its latest drilling program in the Sparky Formation, a major oil-producing formation in the Lloydminster heavy oil area in the Thorsby area of Alberta, Canada.
The company is drilling three wells, Leo 1, 2 and 3; the Sparky wells have been optimised and will average around 3,800 metres measured depth and 53 fracture stages averaging one tonne of sand per metre over the horizontal length.
Leo 1 sits at a measured depth of around 2,000 metres. Intermediate casing has been set and drilling is expected to be completed this weekend, following which Leo #2 will commence drilling from the same pad.
Back in Throsby
Calima CEO Jordan Kevol said the company was pleased to be drilling in Thorsby after a long lay-off.
“We are very excited to be back drilling in the Thorsby area. The last well drilled in this area was in January 2019,” he said.
“We are drilling near some of our best wells to date and planning to implement a larger fracture intensity relative to the previous wells with improved economics expected.
“The three wells have minimal on-lease tie-ins and will flow into our existing oil processing facilities that have ample room for the hydrocarbons.
“We have a lot of running room in the Thorsby Sparky play, and these wells are expected to be very impactful to our bottom line with IP90s of up to 460 barrels of oil per day.”
IP denotes initial production and IP90 is the average oil production over the first 90 days.
Leo details
The IP90 production rates per well are 274-460 barrels per day with a net present value of up to C$8.8 million based on estimated ultimate recovery per well (EUR) of 352,000-462,000 barrels of oil equivalent (boe) with 80% oil.
The wells average approximately 10 days each to drill and will be subsequently fracture stimulated as part of the completion process.
All wells are adjacent to Calima’s oil processing facility and the pad contains two of the best performing Thorsby Sparky wells which have produced greater than 300 mbbl oil and 370 mboe since July 2018.
The wells are also considered development in nature with low geological risk.
The completion and fracture process for the three Leo wells is expected to begin in the third week of September with initial production in late October anticipated.
Promising economics
Calima has drilled 11 Sparky wells to date, with the total tier-1 wells averaging around 3,400 metres measured depth and 36 fracture stages averaging 0.8 tonnes of sand per metre over the horizontal length costing about $2.5 million on average.
The optimised Leo wells are budgeted for $3.2 million per well and Calima anticipates IP90 rates of 460 boe/d (80% oil) and cumulative production of 462,000 boe.
Sparky well resources and economics.
Production expected this year
Production from the Leo program will come on stream in the fourth quarter of 2021, Calima says.
Thorsby provides a land base of about 108 net sections, over 69,120 net acres, that can be developed from multi-well pads, all of which have year-round access and minimise the environmental footprint with oil processing facilities of 3,000 bbl/d oil capacity.
Thorsby wells averaged gross production of ~850 boe/d in June 2021 (100% WI) solely from the Sparky Formation; 11 wells have been drilled to date with future well recoveries estimated at 352 - 462 mboe (80% oil).
In addition to the Leo wells, Calima is expecting to report IP30 well rates of the four Gemini wells it drilled earlier this year by the end of August.
- Daniel Paproth