- Calima Energy (CE1) enters into an agreement with Pivotal Energy Partners in respect to the financing and construction of a pipeline at its Brooks project area in Canada
- The company says the pipeline will connect its oil battery in the north to recently drilled wells in the south to provide egress for planned production growth
- The pipeline is expected to conclude by late March 2022 and upon completion the company says reduced trucking costs will mostly offset loan repayments
- Calima also says environmental, social and governance (ESG) impacts from the pipeline include increased environmental benefits and safety
- CE1 shares steady at 23 cents
Calima Energy (CE1) has executed an agreement with Pivotal Energy Partners for the financing and construction of a pipeline at its Brooks project area in Alberta, Canada.
Pivotal Energy Partners is described as a strategic infrastructure and midstream company.
Calima said the new pipeline, which is expected to be completed by late March, will connect its oil battery in the north of the field to recently drilled wells in the south to provide egress for planned production growth.
The company said reduced trucking and other operating costs were anticipated to mostly offset loan repayments for the pipeline.
Calima said operating cost savings from future well developments would also exceed pipeline repayments with an increase in free cash flow.
The pipeline will be owned by Blackspur Oil Corp, with construction and ancillary costs estimated at a total $4.81 million and repayments at about $85,000 per month.
“Once this pipeline is completed and operational, Gemini #5-#7 (wells) and Pisces #3 will be connected, however most importantly it will provide long-term capacity for planned growth in oil and gas volumes from our core Brooks acreage, which will translate into enhanced operating economics,” Calima CEO and President Jordan Kevol said.
“We are pleased with the environmental and safety benefits related to getting more trucks off the road, and previously trucked fluid into a pipeline, which has been proven to be the safest, most environmentally friendly method of transporting our product.”
The pipeline will be capable of handling the capacity of Calima’s growth plans in the Brooks area for the next three to five years, according to the company.
The agreement is structured across a maximum term of seven years. Termination is possible after the third anniversary, subject to early termination provisions.
CE1 shares were steady at 23 cents at 10:42 am AEDT.