Calima Energy Limited (ASX: CE1) unveiled the better-than-expected core recovery with 230 meters of core recovered through oil and gas target at Montney Formation in British Columbia. The news sent the Calima Energy’s stock to surge by 13.33% or $0.006 to stand at $0.051 on 15 January 2019 (2:16 PM AEST).
The company told that Calima1 vertical well intersected the top of the Montney Formation at 1,562 meters, which is within 4 meters of the pre-drill prognosis. It explains the commencement of Coring operations at 1,571 meters with successful core recovery down to 1,801m. [optin-monster-shortcode id=”swikrbu1d9j9aq0o4cko”]
Calima’s Managing Director Alan Stein stated that this core recovery is more than the company’s anticipation which will provide valuable data to determine expected reservoir performance. Mr. Stein further added that the company targets to reach the bottom of the well in the next few days and will then proceed to collect wireline log data which is planned to be used for the confirmation of two horizontal wells’ depth.
As per the report, the entire core has been recovered to surface which covers approximately 90% of the whole Montney interval. Montney is 254 meters thick at the well location which matches pre-drill predictions and is comparable to the thickness of section encountered by adjacent operators.
The company has also recorded the elevated gas reading during coring operations and observed the gas escape bubbles on the rig floor as the core was recovered to the surface. It is said to be in line with the company’s expectation as well as indicative to hydrocarbon saturation. The report further read that the background gas readings in the lower parts of the Montney were particularly elevated. The company intends to further investigate this reading through detailed core analysis in the laboratory and evaluation of the wireline logging data which is expected to be acquired over the coming days.
Currently, the entire core has been reportedly sent to the laboratory for fast-track processing and analysis while the drilling operations are reported to be on schedule and budget.
Looking forward, the company plans to drill ahead to a target depth of circa 1,875 meters before running a comprehensive suite of wireline logs. The wireline data will be reportedly utilized to ensure the depth of the two horizontal wells which are scheduled to be drilled just after the completion of vertical well Calima-1 logging operations.
The company said that the wireline and core data combined would provide essential stratigraphic and rock property data that will be integrated with production test results to determine the productivity of the Montney Formation over the Calima Lands and provide crucial data for an updated reserves report which will be commissioned post the completion of drilling and testing operations.
In the past 12 months, CE1 stock has witnessed a negative performance change of 21.05% including a plunge of 15.09% in the past three months.
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