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Calima Energy (ASX:CE1) drills second well on Brooks project; additional well on the cards

Summary

  • Calima Energy has drilled the second Sunburst well Gemini 2 in the Brooks area as part of three-well drilling program.
  • The drilling rig has been redeployed to Gemini 1 location for re-entry and drilling a horizontal leg in the well.
  • Drilling additional leg will provide a better sweep of the reservoir and will boost well production.
  • After completing re-drilling on Gemini 1, the drill rig will be relocated to the multi-well pad location to drill Gemini 3 and Gemini 4.
  • The strong WTI crude price is encouraging Calima to undertake more drilling campaigns.

In an upbeat market update, Calima Energy Limited (ASX:CE1) informed that it is making good progress on Gemini 1, 2, 3 and 4 wells. On 13 June 2021, the Company completed drilling the Gemini 2 well on the Sunburst formation in the Brooks area.

Further, to leverage the strong crude oil price momentum, Calima has upped its ante as it reviews plans to add 1 additional Sunburst well bringing the Sunburst Well Campaign to 5 wells.

Latest update: Calima Energy (ASX:CE1) lifts guidance on stellar May operational figures

It took Calima seven days to drill the second well, whose drilling costs came in comfortably under the budget of C$1 million as the 1,686m drilling operation on Gemini 2 cost around C$675,000. The completion operations will be launched soon on the well, and then it could be tied to the existing production facility. The well is expected to produce 200 boe/d with 80% oil.

The Bonanza drilling rig has been moved from Gemini 2 and will be moved backGemini to Gemini 1 location to drill a second horizontal leg in the same well, a common practice within oil industry.

Additional legs are drilled in the same well to cater to multiple reservoirs passing through the well location. This saves the cost of drilling the entire well and the additional cost of completion and production.

Recent update: Calima Energy (ASX:CE1) commences 3 well Sunburst drilling campaign at Brooks

The geological data received while drilling Gemini 1 along with the 3D seismic data, has led to the decision of drilling the horizontal leg or extended reach section on Gemini 1. The re-entry and drilling additional leg will cost around C$350,000 and will take three days to complete.

Drilling rig in action on Gemini 1 Pad (Image source: Company update, 1 Jun

Once the work on Gemini 1 is finished, the Bonanza rig will relocate to drill the Gemini 3 & 4 wells located on the same pad. Drilling of multiple wells from single pad helps in reaching economies of scale and keeps the ground footprint low. Gemini 3 & 4 will be tied to the existing Blackspur Oil processing facility, located on the same section of the well-pad.

Oil Battery with processing capacity of 3,500 bbl/d (Image source: Company update, 9 June 2021)

Good read: Three Catalysts Enhancing Calima Energy's (ASX:CE1) Upside Potential

Mr Jordan Kevol, CEO & President of Calima Energy, is pleased with decision of re-deploying the drilling rig on Gemini 1 to optimise the well as the rig was close by. He also said that WTI oil price over US$70 per barrel brings in more enthusiasm to undertake more drilling operation and complete the Sunburst program.

Strong WTI price encourages additional well

Calima is reviewing plans to add one more well on the Sunburst formation on the Brooks asset. The additional well or Gemini 5 is anticipated to be drilled in early July 2021. The continuing uptick in the prices of WTI crude and AECO natural gas is encouraging Calima to add more wells to the existing drilling campaign.

The Sunburst wells are conventional horizontal wells but do not require costly stimulation jobs like hydraulic fracturing. The wells normally have the true vertical depth or TVD in the range of 1,000m and horizontal section around 775m. Relatively shorter horizontal sections and shallow depth, without the need for hydraulic fracturing keeps the cost of the well low in the range of C$1 million.   

Also read: Robust Flows from Sunburst Wells Boost Calima Energy’s Total O&G Production by 14%

Drilling on Thorsby

Calima is finalising plans to drill three wells on its Thorsby asset. All three will be development wells that are scheduled to be drilled in July/August 2021. CE1 already has 11 wells drilled and under production in the area.

Share price

The stocks of CE1 closed the trade at A$0.008. The Company has a market cap of AU$82.19 million, as of 17 June 2021.

Read more: Calima Energy (ASX:CE1) in High Spirits on Making Impressive Blackspur Acquisition progress


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