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- Calima Energy (CE1) is preparing to re-test its Montney gas acreage in British Columbia
- A testing and evaluation program on the Calima number two and three Montney wells is scheduled to begin later this month
- The board approved the re-tests after the initial program in 2019 was cut short due to snow on the ground melting earlier than anticipated
- Calima believes it could be sitting on a larger resource of gas and condensate than previously thought, which is hoped to be confirmed via the “low-cost” re-testing
- Company shares are up 7.4 per cent trading at 14.5 cents at 2:20 pm AEDT
Calima Energy (CE1) is preparing to re-test its Montney gas acreage in British Columbia.
After the initial testing of Calima’s wells in 2019 was cut short due to snow on the ground melting earlier than anticipated, the company board has approved a new testing program.
A testing and evaluation program on the Calima number two and three Montney wells is scheduled to begin later this month.
At Calima number two, testing will further define the gas and condensate potential of the Middle Montney Formation.
This was initially tested in 2019, but only 16 per cent of the frac load fluid was recovered, with the well achieving what was believed to be its “peak potential gas rates”.
The well flow tested at approximately 10.2 million cubic feet per day and 103 barrels of oil per day condensate prior to the cessation of the testing program.
At Calima number three, the re-test will investigate the potential of a condensate rich zone in the Upper Montney.
Calima said the early stages of the previous test on this well were encouraging, but had to be terminated as the ice road access melted.
Moving forward, the company said a future development program would include a plan for a permanent access road to the main highway to avoid a repeat of this type of issue.
Company CEO and President Jordan Kevol said Calima was very pleased to be getting back to work in the Montney.
“These re-tests will be very impactful in giving the company and its potential partners confidence and concrete evidence of the magnitude of the resource present on the Calima lands.
“The potential for a condensate rich zone in the Upper Montney could be a game changer for the value of the reserves on the acreage and the size of the prize”.
Additionally Mr Kevol said he believed Calima could be sitting on a larger resource of gas and condensate than previously thought, which is hoped to be confirmed via the”low-cost” re-testing.
Once completed, Calima said the results of both tests would further validate the production-type curves used by the independent Reserves Auditor, McDaniel and Associates, and would also enable the progression towards partnership arrangements and a final investment decision on the field development plan.
In this vein, the company told investors today it had engaged a “significant” number of parties in recent months that expressed interest in joint ventures, partnerships, and other potential investments in the Motney resource.
Calima hopes to announce term sheets in hand in the coming months.
Company shares were up 7.4 per cent trading at 14.5 cents at 2:20 pm AEDT.
