Calima Energy (ASX:CE1) Continues to Spread its Wings in September 2020 Quarter

  • November 05, 2020 12:38 PM AEDT
  • Kunal Sawhney
    CEO Kunal Sawhney
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    Kunal Sawhney is founder & CEO at Kalkine and is a richly experienced and accomplished financial professional with a wealth of knowledge in the Australian Equities Market. Kunal obtained a Master of Business Administration degree from University of T...

Calima Energy (ASX:CE1) Continues to Spread its Wings in September 2020 Quarter

Summary

  • Calima Energy (ASX:CE1) has recently published its activities report for the September 2020 quarter.
  • During the quarter, the oil & gas entity progressed with the development of its Montney asset and continued to maintain the Tommy Lakes Facilities as planned.
  • The Company closed the quarter with a decent cash balance of A$2.3 million as on 30 September 2020.
  • Calima successfully retrieved downhole data in September, which was provided together with the core to Canadian Discovery for analysis.
  • Sproule and Associates and their local field operations staff continued to maintain the Tommy Lake infrastructure during the quarter.
  • Calima carried out the installation of additional oil storage of 800bbl at the Paradise Well (100% WI) in September ahead of winter.
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Calima Energy Limited (ASX:CE1) has recently published its quarterly activities report that discusses crucial developments at its core assets during the period ended September 2020. Calima’s key assets comprise the Calima Lands (Montney Formation) that provide a prospective resource of 2.18 TCFE gas and the Tommy Lakes infrastructure and facilities.

During the quarter, the oil & gas entity progressed with the development of its Montney asset and continued to maintain the Tommy Lakes Facilities as planned. Moreover, the Company closed the quarter with a decent cash balance of A$2.3 million as on 30 September 2020.

Let us quickly gaze through the key developments reported by the Company during the September quarter below:

Calima Lands

Early in September, Calima revealed its plans to retrieve and analyse the downhole pressure gauges and core from the winter drilling campaign (2019) in Calima wells (2 and 3). The Company successfully retrieved downhole data in September and provided it to leading international energy information services firm Canadian Discovery, together with the core.

Canadian Discovery’s initial findings confirm:

  • The Middle Montney (Calima 2 Well) that holds most of the resources is over-pressured with a stabilised downhole pressure of 19,382 kPa, akin to well results by Saguaro Resources at Laprise Creek.
  • The Upper Montney (Calima 3 Well) that has higher porosity and permeability, is normally pressured with a stabilised downhole pressure of 12,860 kPa, akin to well results by Tourmaline at Birley Creek and at Nig Creek by Storm Resources.

The latest findings also indicate that potential Upper Montney wells can be devised with reduced cost and less intense completions, resulting in improved economics for each well.

To Read More on Downhole Pressure Data Results, Click Here!

Tommy Lakes Infrastructure

Calima notified that Sproule and Associates and their local field operations staff continued to maintain the Tommy Lake infrastructure during the quarter. The Company completed the acquisition of Tommy Lakes facilities in April 2020 materially under budget, at the cost of A$750k.

Throughout the summer, work was finalised to ensure the preservation of assets and winterisation of camp facilities. Besides, power generation units installed at Tommy delivered through the solar components consistently throughout the summer, using very less external fuel to produce electricity.

The Company mentioned that these power generation units are essential for retaining cathodic protection on facilities and the pipeline to avert corrosion by inducing an electrical current. These units also counterbalance the use of diesel generators that use over 50,000 litres of fuel each year.

Paradise Well (100% WI)

Calima carried out the installation of additional oil storage of 800bbl at the Paradise Well (100% WI) in September ahead of winter. The well is situated 250 km to the southeast of Calima’s extensive Montney interests in the northeast (NE) British Columbia (BC) and 40km to the NE of Fort St John.

The total production days in the September quarter were 81 days, leading to total 1929bbl (averaging ~23.8bbl per producing day). The additional oil storage undertaken at the well in September is expected to ensure a higher number of days on production, considering the well will not be closed in poor weather.

During the quarter, positive momentum was also noted in the gas pricing, with natural gas futures going above USD 3 in US/Canada for the first time in the last two years. The gas prices surged on the back of projections for chilly weather and speculation that gas supplies will be tight in winter amidst a recovery in demand.

While gas prices revived, oil prices tumbled in September, primarily on account of Libya signalling plans towards improving production on 18 September from 100,000 bbl per day to 260,000 bbl per day. Moreover, the production was expected to reach 500,000 bbl per day by the end of October 2020.

All in all, Calima continued to advance the development of its core assets in Q3 2020, in line with its counter-cyclical business strategy designed to reap the benefits of momentum returning to the O&G sector. The improving gas market situation and the recent win of left-wing New Democratic Party (NDP) as a majority government in BC seem to be fostering Calima’s growth prospects in the months ahead.

CE1 traded at A$0.007 on 4 November 2020.

 

 


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