Calima Energy Ltd (ASX:CE1) is set to drill its two Sunburst Formation horizontal wells, known as Gemini, and two Glauconitic Formation horizontal wells, Pisces, in the coming weeks.
Meanwhile in North Thorsby, the Leo #4, which was drilled to target the Sparky Formation in early 2022, is set to be fracture-stimulated, completed and flow tested in June 2022.
"Getting a head start"
CEO and president Jordan Kevol said: “The company has officially kicked off its post spring break-up drilling program.
“The wells scheduled for Q3-2022 are getting a head start based on favourable weather conditions and the availability of a preferred drilling rig.
“Drilling is anticipated to take six weeks for the four wells and first production is expected from the Gemini wells by July 31 as the wells are on lease tie-ins.”
Wells spudding or on track to spud
Gemini #8 has been spudded and is currently drilling ahead. The well is a follow-up to the highly successful Gemini #5 vertical stratigraphic test well drilled in the first quarter of the year.
Gemini #9 will be spudded in mid-June as a follow-up to the Gemini #3 horizontal well drilled in July 2021.
The Gemini #8 and #9 horizontal wells will target the Sunburst Formation in two known pools and are designed to extend the previously identified pool boundaries based on information from the company’s extensive 3D seismic work.
Gemini #8 follows the successful Gemini #5 vertical well drilled in January 2022. The Gemini #5 well proved that the Sunburst Formation was present and prospective in the target area.
Gemini #8 is a development well targeting undrained reserves in this Sunburst pool, while Gemini #9 is a follow up to the highly productive Gemini #3 well drilled in July 2021 which has recovered 74,000 barrels of crude oil and 118 million cubic feet (mmcf) of gas, or around 93,000 barrels of oil equivalent (boe).
Pisces #4 and #5 will spud in late June or early July and are follow up wells to two of the top quartile Glauconitic wells drilled by Blackspur, boasting 188,000 boe and 224,000 boe production to date respectively.
The Leo #4 step-out well in Holborn, North Thorsby, will be fracture-stimulated in late June, and has the potential to add substantially to reserves and drill locations as well as production.
Maintenance to bring forward production
With rising oil prices, the company brought forward its cleaning out program to maximise production over the coming months.
Flow rates were being hampered by frac sand and two Sparky Formation wells, Leo #1 and Leo #2 in Thorsby, have now undergone successful coil tubing nitrogen clean-outs to remedy this problem.
Leo #1 is now back in production and Leo #2 will be today.
The same operation was previously performed on Leo #3 earlier this year resulting in a resumption of strong production rates – the company anticipates the same response from Leo #1 and #2.
Credit facility
A C$27 million credit facility for Blackspur’s has been renewed and varied for shareholder capital returns.
The National Bank of Canada wrapped up a semi-annual review of the revolving credit facility and has reaffirmed the company’s revolving line of credit of C$27.0 million. The facility provides the company with a low cost (around 4%) of capital that can be used to fund working capital requirements and longer-term investment programs.
The facility was also amended to allow the company to undertake the A$2.5 million shareholder distribution to be paid in the September quarter.
Under the terms of the amended lending agreement, the value of any cash distributions that are made reduces dollar-for-dollar the company’s available credit capacity under the facility, until such time as the facility is reassessed as part of its next scheduled semi-annual borrowing base review.