Calima-2 Initial Results - Outperforms Peer Group
ASX Announcement 25 March 2019
Highlights:
- Calima-2 test rate delivers top quartile performance against peer group.
- Production tubing being installed with testing to recommence imminently delivering further results.
Calima Energy Limited (ASX:CE1) (“Calima” or the “Company”) is pleased to provide an update regarding production testing on the Calima-2 well.
The maximum flow rate achieved during the clean-up phase of the production test was 10.2 mmcf/d.
The ratio of liquids to gas continues to improve as the well cleans up. Based on the latest production numbers collected immediately prior to the installation of production tubing the condensate to gas ratio (CGR) had climbed to 17.6 bbl/mmcf. Assuming typical plant recoveries for Montney liquids rich gas this would equate to a final CGR of 35-38 bbl/mmcf (1) .
Based on other results in the area the CGR would be expected to improve once the wells are brought on long-term production and the gas production rate is optimised. Comparisons with nearby wells suggests that Calima-2 should match or exceed the liquids rates from adjacent areas.
Alan Stein, Calima’s Managing Director commented:
“We have some strong results coming out of Calima-2 which firms up our belief that we have opened up a new extension to the liquids-rich Montney play in British Columbia. The team in Canada are doing an outstanding job to collect all the data we need in a race against time ahead of the end of winter. In common with most new areas across the Montney there is a window of opportunity to operate while the ground is frozen. Now that we have such positive results building all-weather access can be planned for the future. In the meantime, we are successfully gathering all the data we need to determine exactly how we can expect wells in this area to perform. We can also provide these data to our reserve auditors as the basis of an updated report”.
The Company has retained one of Calgary’s leading oil and gas consultancies, GLJ Petroleum Consultants, to analyse the test results and provide commentary on the data being generated. Further details will be released as the data becomes available over the next 14 days however some early data provided by GLJ (Figure 1) demonstrates that Calima-2 has delivered initial performance in the upper quartile of the peer group.
Figure One – Test rate (mmcf/d) after 48 hours vs rig release date showing that in terms of initial performance Calima-2 has performed within the top quartile of the peer group
Calima-2 flowing gas and light oil
ASX Announcement 22 March 2019
Highlights:
- Calima-2 well flowing at a rate of 1,640 boe/d comprising gas at ~ 9 mmcf/d, with light oil and other natural gas liquids at ~143 bbl/d.
- Production tubing is being installed with testing to recommence imminently delivering further results.
- Calima-3 testing has commenced with recovery of load water injected during reservoir stimulation underway.
Calima Energy Limited (ASX:CE1) (“Calima” or the “Company”) is very pleased to advise that the Calima-2 well (Appendix One) is producing gas and light oil (or condensate) from the middle target in the Montney Formation.
The first phase of the production test which recovers the load water injected during reservoir stimulation is nearing completion. As the water rate decreases the flow of gas increases and eventually light oil and other natural gas liquids are recovered. During the final stages of the clean-up phase the well has been flowing at a calculated rate of 1,640 boe/d(1) comprised of ~ 9 mmcf/d of gas and ~143 bbl/d(2) of light oil and natural gas liquids.
The well will now be shut in as planned to allow installation of production tubing before being brought back on production. The tubing allows for collection of additional data such as down hole pressure and management expects that the production rates and the ratio of gas vs light oil and natural gas liquids will continue to improve once the tubing is installed.
Alan Stein, Calima’s Managing Director commented:
We are extremely pleased with the initial production rates from Calima-2 which compare favourably with other wells in the region. This satisfies the primary objective of the drilling campaign and confirms that the Calima Lands lie within the sought-after liquids rich zone of the Montney Formation. This is an exciting time for Calima shareholders, and we look forward to releasing further results over the coming days. The delays associated with the coiled tubing unit have been frustrating given the narrow weather window in which we can operate. Fortunately, with this outstanding performance from Calima-2, we will have all the basic data needed to calculate the metrics to demonstrate that we have opened up a new liquids-rich Montney play in British Columbia”.
Figure One – Gas being flared during initial testing operations of the Calima-2 well.
Coiled tubing operations on Calima-3 are now completed and the well has started its clean up with recoveries of load water injected during reservoir stimulation underway. At this stage it is performing in a similar manner to Calima-2.
The Company has retained one of Calgary’s leading oil and gas consultancies, GLJ Petroleum Consultants, to analyse the test results and provide commentary on the data being generated. Further details will be released as the data becomes available over the next week or so.
A video of the testing operations is available on the Company website www.calimaenergy.com. This release is designed to lift the trading halt requested by the Company on March 21st
