EQS-News: Calima Energy: 5 Well Driling Program at Brooks Commenced

• Gemini Sunburst Program A new 3 well Gemini drilling program commenced last week
  • Gemini #10 (50% WI) Will be drilled from the same pad as Gemini #3/#9. The well will deliver to the 15-23 oil battery at the South end of the Brooks field. Gemini #10 was spud on October 5
  • Gemini #11/#12 (100% WI) are located on the same pad as Gemini #8/#5 and both wells will tie into the 2-29 oil battery. Gemini #11 was spud on October 15
• Pisces Glauconitic Program Pisces #6 and #7 are follow-ups to the highly successful Pisces #4 and will tie into Calimas 2-29 oil battery late in Q4-2022 via an on-lease tie-in; peak production from the two wells is anticipated in Q1-2023 post fracture stimulation.  Drilling will commence following the Gemini program as part of a continuous operation
• 4 of the 5 new wells will be drilled on newly acquired consolidated lands at Brooks
• Production has continued strongly over Q3 with average production of ~4,150 boe/d
• Existing hedges closed out end 31 December 2022
• LNG Canada now 65% complete with first shipments anticipated early 2025, Calima is intensifying efforts to extract value from its Montney assets

Calima Energy Limited (ASX:CE1 / OTCQB: CLEMF) (Calima or the Company) is pleased to provide an update on the Companys drilling plans for the remainder of 2022. The following program is designed to maintain current corporate production levels, as well as maintain and develop our PDP reserves, and provide shareholders exposure to high commodity prices through the drilling of our highly economic oil plays. Two of the five wells will flow through the 19km pipeline placed in the heart of the Brooks acreage earlier this year.

Q4 Drilling Program (refer Map below)

• Gemini Sunburst Program - 3 horizontal wells: 
  • Gemini #10 (50% WI) was spud on 5 October 2022 and has completed drilling and is awaiting completion. The well will be drilled from the same pad as Gemini #3 and #9 and will flow into Calimas 50% owned 15-23 oil battery at the South end of the Brooks field.  This well is designed to increase the recovery factor in a known Sunburst Formation pool that has historically been developed by vertical wells.
  • Gemini #11 and #12 (100% WI) are follow-ups to the highly successful vertical well (Gemini #5) drilled in Q1-2022 which tested the viability of the Sunburst Formation in a previously undrilled portion of the fairway. Gemini #11 was spud on October 15. These horizontal wells are being drilled from the same pad as Gemini #5 and #8 and will be on-lease tie-ins reducing overall costs. In addition, these wells will utilise the recently completed large-scale pipeline installed in Q1, with the fluids flowing directly to our 2-29 oil battery.  These wells are designed to capture previously untapped reserves identified from 3D seismic, as well as the geological information gained from the drilling of Gemini #5 and #8.   
  • Sunburst wells are considered true conventional wells as they do not require fracture stimulation to produce.  Based on type-curve results at current commodity prices, these wells are expected to pay out in <12 months.

• Pisces Glauconitic Program - 2 horizontal wells:
  • Pisces #6 & #7 (100% WI) are follow-up wells to the successful Glauconitic Formation horizontal well (Pisces #4) drilled earlier this year and these wells are interpreted to be in the same pool.  Pisces #6 & #7 will be completed as horizontal multi-stage fracture stimulated wells and tied-in to our 2-29 oil battery late Q4-2022 via an on-lease tie-in with peak production from the two wells anticipated in Q1-2023.

Q1-2023 program

After this program, Calima management and board is contemplating, modelling, and budgeting for future drilling in both Brooks and Thorsby that may commence in Q1-2023, and will contribute to continued production decline mitigation, as well as incremental production growth.

Montney update

With continued commodity price elevation, increasing demand for LNG exports from North America, and LNG Canada now 65% complete with first shipments anticipated early 2025, Calima is intensifying efforts to extract value from its Montney assets.

Calima is currently planning a modest winter program for 2022-2023 to progress and further de-risk development in the field and aid in prepping the field for anticipated development in subsequent seasons via a joint venture with a partner.  No deals have been reached, but Calima continues to have discussions with potential strategic partners.  Pending securing a joint venture partner, the project is targeting initial production in Q1 2025.

Jordan Kevol, CEO and President, commented:

Drilling at Brooks for our Q4 program has begun.  We are pleased to be following up on our Gemini #5 discovery earlier this year with two more Sunburst horizontal wells into the pool.  The Glauconitic wells that we are drilling are a follow-up to the successful Pisces #4 well drilled this summer.  This modest program will set us up for continued drilling, growth, and free cash flow throughout 2023, particularly if we continue to have strong commodity pricing for our oil and gas.  Every well in this program is an on-lease tie-in, as we aim wherever possible to utilise our significant infrastructure footprint in the Brooks area.  This also results in quick on-stream timelines for our wells, as well as more expedient cash flow.

Read the full announcement:
https://app.sharelinktechnologies.com/announcement/asx/117d75e7138aca48993ff58a573b938d

This release has been approved by the Board.

For further information visit www.calimaenergy.com or contact:

ADVISORIES & GUIDANCE

Forward Looking Statements

This release may contain forward-looking statements. These statements relate to the Companys expectations, beliefs, intentions or strategies regarding the future. These statements can be identified by the use of words like anticipate, believe, intend, estimate, expect, may, plan, project, will, should, seek and similar words or expressions containing same. These forward-looking statements reflect the Companys views and assumptions with respect to future events as of the date of this release and are subject to a variety of unpredictable risks, uncertainties, and other unknowns. Actual and future results and trends could differ materially from those set forth in such statements due to various factors, many of which are beyond our ability to control or predict. These include, but are not limited to, risks or uncertainties associated with the discovery and development of oil and Natural Gas reserves, cash flows and liquidity, business and financial strategy, budget, projections and operating results, oil and natural gas prices, amount, nature and timing of capital expenditures, including future development costs, availability and terms of capital and general economic and business conditions. Given these uncertainties, no one should place undue reliance on any forward-looking statements attributable to Calima, or any of its affiliates or persons acting on its behalf. Although every effort has been made to ensure this release sets forth a fair and accurate view, we do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 

Qualified petroleum reserves and resources evaluator statements

Refer to the announcements dated 28 March 2022. The Company is not aware of any new information or data that materially affects the information included in the referenced ASX announcement and confirms that all material assumptions and technical parameters underpinning the estimates in the relevant market announcements continue to apply and have not materially changed.  The Brooks and Thorsby petroleum reserves and resources information is based on, and fairly represents, information and supporting documentation in a report compiled by InSite Petroleum Consultants Ltd. (InSite) for the December 31, 2021 Reserves Report. InSite is a leading independent Canadian petroleum consulting firm registered with the Association of Professional Engineers and Geoscientists of Alberta. These reserves were subsequently reviewed by Mr. Graham Veale.  The InSite December 31, 2021 Reserves Report and the values contained therein are based on InSites December 31, 2021 price deck (https://www.insitepc.com/pricing-forecasts). InSite and Mr. Veale have consented to the inclusion of the petroleum reserves and resources information in this announcement in the form and context in which it appears.