The company is delighted to advise that the Calima1 vertical well has reached a final depth of 1,872.5m. Against a forecast of 1,562.2m and it is 256.5m thick against a forecast of 257.3m the top of the Montney Formation was encountered at 1,559.5m. Hydrocarbon and porosities saturations within the Montney Formation in the Calima-1 well are comparable with adjacent producing wells as confirmed by wireline log data. Core analysis confirms the presence of natural gas condensate. The Calima-2 horizontal well has been spudded.
With the operational progress and initial results from the Calima-1 well, the company is delighted. It believes that the Montney Formation on the Calima Lands would be comparable to the productive land immediately to the south appears to have been validated. Zones with enhanced reservoir characteristics containing natural gas condensates with a calculated API gravity of 55 degrees and gas are encountered. Since condensates from the Montney are generally priced at a premium to West Texas Intermediate crude oil, this is particularly significant for the economics.
Results from an extended production test over the coming weeks, the Calima 2 horizontal well has been spudded. To complement the 230 m of core already collected before completing the Calima-1 well a full suite of wireline logs was acquired. With a separate evaluation of the logs undertaken by Nutech, the wireline log data were acquired. To be comparable with offset wells that are currently producing in adjacent acreage, the log data are correlated to nearby wells with preliminary analyses showing porosity measurements and hydrocarbon saturations throughout the Montney.
Within the Montney which matches those zones already targeted by other Operators in the region, analysis of the log and core data from Calima-1 has confirmed the presence of three target zones which are upper middle and lower. Analyses of the logs and core recovered over the Upper and Middle target intervals of significance has demonstrated the presence of natural gas condensate.
To determine the precise depth of the two planned horizontal wells which will target the Upper and Middle target zones the new data are being evaluated. Both wells are planned to have 2,500 m horizontal sections and the first, following completion of the Calima-1 vertical well Calima-2 has already been spudded. After the completion of the Calima-1 vertical well, the second horizontal well, and following completion of Calima-2, Calima-3 will be drilled immediately. To determine the flow rates that can be achieved from wells in this area production testing of fracture stimulated horizontal wells will be required and the relative mix of gas and condensate that can be recovered. After completion of the Calima-2 horizontal well, a further announcement will be made.
Calima Energy Limited (ASX: CE1) traded flat this morning at around $0.048, the stock in the past one month has seen a performance change of 14.29%.
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