- Calima Energy (CE1) tells shareholders “more time is needed” to determine and unlock the value of its Montney natural gas project in Canada against the backdrop of stronger prices
- The company says it is continuing a value maximisation process for the project, led by investment bank Peters & Co
- Calima says it is taking longer than expected “due to the size of the opportunity, the significant merger and acquisition activity that occurred in 2021 (C$8.5 billion transaction value) and the time to absorb new deals”
- The company says value pathways for the Montney asset may include an asset sale, joint venture, asset exchange or other potential deals
- CE1 shares up 2.56 per cent to 20 cents
Calima Energy (ASX:CE1) has told shareholders “more time is needed” to determine and unlock the value of its Montney natural gas project in Canada against the backdrop of stronger prices.
The company said it was continuing a value maximisation process for the project, which is located in the “development-ready” province of British Columbia.
CEO and President Jordan Kevol said Calima remained committed to unlocking value for shareholders.
The company said the Montney asset evaluation process, started in September 2021, was taking longer than expected “due to the size of the opportunity, the significant merger and acquisition activity that occurred in 2021 (C$8.5 billion transaction value) and the time to absorb new deals.”
Calgary-based energy-focused investment bank Peters & Co. was engaged to seek out value pathways, which Calima said could include an asset sale, joint venture, asset exchange or other potential transactions.
Mr Kevol said natural gas spot prices had risen about 30 per cent and futures by about 20 per cent since the company started its value maximisation initiative.
“Throughout 2021, significant consolidation occurred immediately adjacent and leading up to our asset position,” he said.
Mr Kevol said the company was pleased to see the first Montney-related deal this year, when Vermillion Energy announced the acquisition of Leucrotta Exploration last month.
“Current strong gas prices have reaffirmed to Calima that significant inherent value exists in this asset and more time is needed to seek out the proper way to unlock it,” he said.
The company said in its latest announcement that it was not in a position to unveil a specific transaction or direction at this stage.
Calima owns and operates more than 13,750 hectares of Montney land rights. It maintains a 10-year petroleum and natural gas lease that expires in 2029. It drilled three wells in 2019.
The company has approvals in place to build a pipeline from the Calima 2 and 3 wells to the Tommy Lakes infrastructure tie-in point.
CE1 shares were up 2.56 per cent to 20 cents at 4:04 pm AEST.