Calima Energy (ASX:CE1) spuds first well in Thorsby post successful campaign in Brooks

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Calima Energy (ASX:CE1) spuds first well in Thorsby post successful campaign in Brooks

 Calima Energy (ASX:CE1) spuds first well in Thorsby post successful campaign in Brooks
Image source: Image source: pan demin,Shutterstock

Highlights

  • Calima Energy has spudded the first well in the Sparky formation in the Thorsby area.
  • The three wells planned under the current campaign will be drilled to a measured depth of ~3,800m.
  • The completion process will involve 53 fracture stages with an average one tonne of sand per metre over the horizontal length.
  • A production rate of ~274-460 bbl/d with NPV10 of CA$6.5-8.8 million is expected per well.

Calima Energy Limited (ASX:CE1) has commenced a three-well drilling campaign in the Sparky Formation in the Thorsby area. The development follows a successful four-well campaign in the Sunburst Formation in the Brooks area. The Brooks and Thorsby oil & gas assets are located in the Alberta region of Canada.

This is the first drilling campaign on the Sparky Formation after the acquisition of Blackspur in April 2021.

Related read: Calima Energy’s (ASX:CE1) high-octane June quarter marked by strategic Blackspur acquisition

Overview of three-well Thorsby drilling program

To boost crude oil production from the Thorsby assets, Calima has finalised a three-well Leo drilling program to penetrate the Sparky formation.

Thorsby contributes to the existing production of the Company through 11 wells drilled prior to the acquisition. Calima had reported an average production of ~850 boe/d from the Thorsby assets in June 2021.

Thorsby Field (Image source: CE1 update, 19 August 2021)

Related read: Calima Energy (ASX:CE1) lifts guidance on stellar May operational figures

Three wells will be drilled on the same pad, and each of them is expected to take around 10 days for drilling. All three of them will be horizontal wells, and unlike the Sunburst wells, Sparky wells will need hydraulic fracturing for completion.

The average measured depth (MD) of the wells will be ~3,800m. The fracking job will be done in 53 stages and would require one tonne of sand per metre over the horizontal length. The newly drilled development wells are expected to produce within the range of ~274-460 bbl/d. Each well will cost around CA$3.2 million, and with the given production rate and estimated ultimate recovery (EUR) per well of up to 462,000 boe with 80% oil, wells are anticipated to generate NPV10 of CA$6.5-8.8 million.

The expected payback period would be around 5-10 months.

Well Planning

The team is engaged in drilling the section below the intermediate casing of Leo #1 and the drillbit is moving at a depth of around 2,000m (MD), as per the company update on 19 August. As Leo #1 encountered some complications during drilling of the intermediate casing section, the team had to sidetrack the well.

Leo #1 is expected to reach its target depth by this weekend. After this, the rig will be skidded nearly 15m to the location of Leo #2. The third well in the current series, Leo #3, will also be drilled from the same pad immediately after Leo #2.

The fracturing operation is scheduled for the third week of September, followed by which production is expected by the end of October from the three wells.

Drilling and production timeframe for Sparky wells (Image source: Company update, 19 August 2021)

Good read: Calima Energy (ASX:CE1) concludes drilling of Gemini #4 well, what’s next?

Thorsby field development

The Thorsby oil & gas field is spread across 108 net sections or 69,120 net acres. The field has year-round access, and the Company takes special care to keep its environmental footprint to a minimum. The field has installed oil processing capacity of 3,000bbl/d.

The Sparky formation has only 11 wells drilled so far, and three more will be added by this quarter, taking the tally up to 14. The field development plan can accommodate up to 89 net Sparky wells and 12 net Nisku wells.

Thorsby field development plan (Image source: Company update, 19 August 2021)

Also read: Calima Energy (ASX:CE1) shares soar 12.5% on Brooks Sunburst drilling update

Jordan Kevol, CEO of Calima Energy, seemed excited to be back in the Thorsby area for drilling. He said that the last well in the area was drilled back in January 2019. The current wells are being drilled in close vicinity of some of the best wells the Company has in its inventory. The Company is planning to implement a larger frac intensity on the current wells with respect to the previous ones.

“The 3 wells have minimal on-lease tie-ins and will flow into our existing oil processing facilities that have ample room for hydrocarbons. We have a lot of running room in the Thorsby Sparky play, and these wells are expected to be very impactful to our bottom line with IP90’s of up to 460 barrels of oil per day,” Kevol added.

Share price

Shares of Calima Energy traded at AU$0.009 on 19 August 2021. The Company has a market cap of AU$92.46 million.

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