Calima Energy Ltd (ASX:CE1) has started a two-well horizontal Glauconitic (GLCC) drilling campaign at its core Brooks area in Alberta, Canada, the next step in leveraging 147 locations within the Brooks area that the company believes will provide further growth.
The GLCC wells are anticipated to have an estimated ultimate recovery (EUR) of 170-400 million barrels of oil equivalent (BOE), with an average over 90 days (IP90) of 200-400 BOE per day.
Spudding of the first well has commenced, intended to be drilled down to a depth of about 2,600 metres and expected to take about 10 days.
The second well will commence drilling off the same drill pad, intended to be an extended reach horizontally drilled to a depth of 4,300 metres.
In early January Calima intends to begin multi-stage frac stimulation for both wells, after which they will be tied in to existing infrastructure and facilities, with an estimated production date of mid-February 2022.
CE1 confident of solid production levels
Calima Energy CEO and president Jordan Kevol said, “I am pleased to advise that a two well drilling campaign targeting the Glauconitic Formation in the Brooks area has commenced.
“Based upon our extensive drilling knowledge in the area, low geological risk, we are confident these two development wells will come in on budget and produce at or above the well type curves.
“With short tie-ins, our drill to on-stream time is extremely fast at 60-75 days including a short downtime for the Christmas holiday season.”
The GLCC wells will offset an existing GLCC well (100/04-21) that has produced more than 125,000 barrels of oil since being drilled in May 2017. Calima says that seismic and reservoir engineering confirm that there is significant reservoir upside.
The company is projecting a total capital program of C$5 million for the drilling, well completion and tie-in activities for the two new wells.
Calima also intends to introduce a hedging program designed to manage capital exposure and ensure they retain a strong balance sheet. The capital program will be funded from operational cash flow and National Bank debt facility which the company already has access to.
Leo 1, 2 & 3 wells continue to recover drilling and frac fluid together with hydrocarbons and Calima says “we are encouraged by the initial oil flow rates”.
About Calima Energy
Calima Energy’s business strategy is counter-cyclical, designed to take advantage of momentum returning to the oil and gas sector after the savage downturn in global oil and gas prices that started in 2014.
The company’s core asset lies within a liquids-rich sweet spot of the Monetary Formation in northeast British Columbia where it has been able to covert around 60% of its total 63,000 acres holding to 10-year lease through a successful exploratory drilling program.
Calima also recently merged with Blackspur Oil Corp, a privately held Canadian company producing oil and natural gas assets in two core areas within Alberta - at Brooks and Thorsby.