THE CONFERENCE CALLER: Calima Energy (ASX: CE1) is in a farm‐in agreement involving oil and gas licences prospective for the Montney Formation in British Columbia (BC), Canada.
The Farm-in Agreement allows Calima to acquire a working interest of up to 55 per cent in the Montney project and operatorship of the project.
The company recently completed a three-well drilling campaign on its Calima Lands in BC, the results of which validated its early geoscience work, which predicted that the Calima Lands would be rich in gas, condensate (or light oil) and natural gas liquids.
“Our target was to match the results achieved by our regional neighbours who are established producers,” Calima Energy managing director Dr Alan Stein said.
“We believe our results show the potential to match or exceed the results of our immediate peer group.”
Results from the drilling campaign demonstrated a 35 per cent Well Recovery Increase taking the estimated ultimate recover of each well to 8.4 billion cubic feet (Bcf) per well.
Based on limited test results, the company conservatively estimated gas-to-liquids ratio conservatively estimated at 45 barrels per million cubic feet of gas (bbl/mmcf) with 65 per cent of the liquids being high-value condensate (priced at WTI).
Calima expects the liquids ratio to increase once the wells are cleaned up and on steady production.
Canada, and the Montney region, is a good place for an aspiring producer as it a global top five gas producer.
The Montney accounts for almost half of Canada’ gas and is one of North America’s most productive and lowest cost resource plays.
Production rates have been increasing in the region by 20 per cent per annum over the last three years.