Calima Energy progresses Sunburst drilling in Canada with aim to achieve year-end production guidance of 4,500 boep/d

Calima Energy Ltd (ASX:CE1) (OTCMKTS:RLTOF) (FRA:R1Y) is successfully progressing drilling at Gemini 1,2, 3 and 4 wells targeting the Sunburst formation in Alberta, Canada, ahead of its goal to achieve year-end production guidance of 4,500 boep/d. The company has elected to hold the Brooks drilling program to four Sunburst wells, with three Thorsby wells also prioritised for drilling in the September quarter of 2021. Brooks wells have exceptionally low carbon dioxide in reservoir at 2% and Calima’s multi-well pad drilling reduces the environmental footprint. Based on results to date, the current four-well campaign should add type curve production and economics. “Working at phenomenal pace” President and CEO Jordan Kevol said the company had safely executed the drilling of three Sunburst wells and had started the step-out Gemini #4 in the Alderson strike area near Brooks, Alberta. He said: “Calima’s operations team has been working at a phenomenal pace, getting horizontal wells drilled, completed and tied-in in record time. “The shallow drilling depth, short tie-in to the Calima owned infrastructure, combined with the team’s expertise and experience in the area has resulted in unrivalled 'spud to onstream' times.” "High prices and attractive economics" Kevol added: “With continued high oil prices and the highly attractive economics of the Thorsby area wells at current energy prices, we are prioritising our three well Thorsby drilling campaign which is to commence in late July. “Based on current commodity prices, we are continuing to get wells licensed and ready for potential additional drilling subject to energy prices and free cash flow. “With both Brooks and Thorsby having great access, logistics and infrastructure we are able to respond to market conditions and quickly add new production.” Drilling highlights The Gemini #3 well, which was spudded on June 18 reached a total depth of 1,960 metres. It is set to be connected to facilities and infrastructure with initial flow-back and production expected in mid to late July after completion of a short tie-in pipeline to facilities. The well encountered excellent oil and gas shows, which has validated the company’s 3D seismic interpretation and it is anticipated to produce as a type curve well.  It is believed that the success of this well will open up further Sunburst development. At Gemini #1 the well re-entered and additional horizontal leg was added, ensuring drainage of the reservoir pool. The well has been completed and pipeline connected to Blackspur infrastructure, initial flow-back and production having started one June 26– 26 days from spud to on production. Calima’s Gemini #2 well has also been completed with pipeline connected on June 24 with oil and gas shows described as “excellent” throughout the reservoir. At Gemini #4 a bonanza rig has been moved to location and the well has been spudded with drilling expected to take place in 11 days. This well is a step out from the existing Brooks wells and may add to the company’s 1P and 2P reserves book. Thorsby The decision to advance the Thorsby three-well drilling campaign allows Calima to benefit from strong energy prices via the high-impact Thorsby Sparky Formation wells, and for the company to monitor Gemini #3 well flow rates and determine final facilities requirements for Gemini #5. Sunburst horizontal development The Sunburst wells being drilled are conventional, open-hole horizontal wells, meaning they require no stimulation such as hydraulic fracturing. Its true vertical depth (TVD) of the target Sunburst zone is around 1,000 metres and the average lateral length of the horizontal section is typically 775 metres. The combination of the shallow target depth, relatively short horizontal length, lack of need for stimulation, and short tie-in, results in an all-in cost estimate for each well to be around C$1 million on average.