Calima prepares three new wells for oil production in Canada

Calima Energy says it is poised to produce new oil production from three third generation “Leo” oil wells at its productive Thorsby oil field near Edmonton in Alberta, Canada. Full oil flows are expected to be achieved between Christmas and Valentine’s Day and, according to the company, each new Leo well aims to produce between 270 and 460 barrels of oil equivalent per day.

The Leo Sparky wells were completed with 50 stages, 42 meters apart and 44 tonnes of sand per stage with an additional horizontal section of 320 m per well.

A 7 day planned shutdown period, now complete, allows proppant to heal in the formation, ensuring good conductivity and minimizing future wellbore cleanings

Leo’s three new wells are now open for operation and await the installation of pumping equipment and the final lease connection to the production facilities.

Leo wells receive 6,000 cubic meters of fluid stimulation of which 50% will be recovered over the 30-60 days of initial reflux leading to stabilized production rates that are expected to reach 90-day initial production rates between 270 and 460 barrels of oil equivalent per day. The first hydrocarbons are expected within 7-10 days and the flow after 30 days should include training oil / gas / water and stimulating fluids. According to the company, within 60 to 90 days, the wells will reach their full hydrocarbon production capacity.

The wells were budgeted at $ 3.2M per well with prepayment forecasts of 5-10 months from initial drilling and a net present value of CA $ 6.5M to CA $ 9.0M. With a break-even point over the modeled WTI of between US $ 33 and US $ 35.10 and a WTI above US $ 83, the economy looks solid for Calima.

The Leo well fracture stimulation went without a hitch. Each piece of sand programmed to be placed has been placed successfully. All three wells were pumped back to back, on time and on budget. After the one-week shutdown period, each of the wells at several fracturing ports has been opened and will now begin the backflow process as soon as the downhole pumping equipment is installed and the leased connections are completed. We expect to see the first oil within 7-10 days of pumping.

Calima Energy recently announced that it plans to redistribute up to 30% of free cash flow from its Canadian oil and gas operations to shareholders in 2022 in the form of a first dividend. The remainder of operating cash flow will be reinvested in the development of Calima’s 21 million barrels of oil reserves with 64 locations reserved for drilling.

Meanwhile, the company continues to seek a sale or farm for its rich acreage in Montney, British Columbia with the help of Calgary-based Peters and Company Limited.

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