Calima oil production levels rebound in Canada
ASX-listed Canadian oil producer Calima Energy is back pumping 4,100 barrels a day after a workover program at its Alberta fields, with three more wells yet to come on stream.
Calima expects to distribute an initial dividend of $2.5 million soon, subject to shareholder approval.
Rising production levels are expected to strengthen Calima’s balance sheet with West Texas Intermediate oil price at US$104 per barrel.
Calima’s Gemini-8 and 9 wells are in production and are currently being cleaned before starting primary production. Wells should take 30 days to be cleaned.
Gemini wells in Calima’s Brooks Project area are drilled into the Sunburst Formation as conventional open pit horizontal wells, requiring no stimulation such as hydraulic fracturing.
The company expects the combination of the shallow target depth, relatively short horizontal length, lack of need for stimulation and short tie-in to result in an overall cost per well of C$1 million.
The Pisces 5 well, in which Calima holds a 50% interest, was sunk earlier this month and is ready to be completed and fracture stimulated.
This is a follow-up to a 2014 glauconic formation well producing 86,000 barrels of oil with a 17-stage frac liner. Pisces 5 will have a taller frac lining of 25 to 30 stories and Calima expects it to surpass the 2014 well.
Pisces 4 is also awaiting fracturing, with a 33-stage fracturing liner cemented in place as the company seeks to emulate its 15-36 well, the most productive glauconite well, producing 133,000 barrels of oil since its placement in mid-2018.
Calima reported downtime for maintenance and mechanical failure last month, but it says production is now on target and the company is focused on additional production.
Fracturing of the Leo 4 exit shaft has been completed at its 50% owned North Thorsby project area, with production testing to follow.
Gemini-8 and 9 are now in production and cleaning, increasing revenue. Pisces-4 and 5 are now ready for fracture pacing completion and are expected to be in production and increasing August revenue.
We hope to be able to test Leo 4 in the next 2 weeks. Overall, the company is very pleased with the progress of this quarter’s activities and we are now working on the drill program for the December quarter.
Management told shareholders that its proposed dividend of A$2.5 million would take the form of a distribution of capital. Calima is in the process of preparing a notice of meeting so that shareholders can approve the company’s windfall.
Calima Energy previously issued an EBITDA forecast for the nine months to September 30 of between A$63 million and A$68 million based on an oil price of $105 a barrel.
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