Calima Energy accelerates towards production
ASX-listed oil and gas play Calima Energy is set for an action-packed 2019, with a massive acreage in Canada’s hottest energy province, significant cash in the bank and a maiden drilling program already underway.
Calima – listed under the ASX ticker CE1 – holds a vast 72,000-acres of land in the Montney Formation, British Columbia, Canada’s most active hydrocarbon basin.
Recently, the company started a three well drilling programme to test the prospectivity of it’s landholding in the prolific Montney Formation.
The first well, which has just been completed to a depth of 1,850m, was a vertical well to calibrate the stratigraphy while the next two will be production wells with each being drilled horizontally for a distance of 2,500 metres.
Calima believes the initial drill program will hit a liquids-rich northern extension of the Montney Formation.
The Montney has seen its fair share of production with over 350 horizontal wells spudded in the first quarter of 2018 alone, almost double the same period in 2016.
In 2017, C$5.2 billion was invested in the Montney which is predicted to increase almost 50% to C$7.5 Billion by 2022.
According to a 2013 government study, the Montney still has significant reserves of oil and gas remaining with estimates of 449 tcf of gas, 14.5 billion barrels of NGL’s, and 1,125 million barrels of oil.
Calimas acreage position has a premium post code with one of the leading Montney producers, Saguaro Resources, holding 113,000 acres immediately to the south and along the same geological trend.
A recent geological audit and review of offsetting production for the Montney Formation on the Calima lands by McDaniel & Associates Consultants confirmed the Calima Lands should be rich in condensate with adjacent land being developed by Saguaro a valid analogue.
According to the McDaniel’s report, Calima’s prospective resources based on 400 well locations is 475 mmboe (million barrels of oil equivalent).
Meanwhile, having raised $25 million in an oversubscribed placement back in August, Calima is cashed-up to fund its initial drilling program over its acreage.
Big things can be expected from Calima in the foreseeable future.
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