Emerging energy producing company Calima Energy (ASX:CE1) has announced initial flow rates from one of its maiden wells, drilled in the Montney basin in British Colombia, Canada, with the Calima-2 well flowing 1,640 barrels of oil per day equivalent.
Approximately 143 barrels of oil per day consists of light oil and natural gas liquids.
Liquids rich natural gas is a premium product in the Montney region, typically priced at or above WTI – typically used as a benchmark for global oil pricing.
Liquid natural gas is used extensively as a dilutant for heavy oil, which is produced on-mass at the nearby Canadian oil sands, offering a read-made market for Calima’s newly minted wells.
The Company has said it now intends to shut-in the well to install production tubing, which it believes will further increase the ratio of liquid natural gas and light oil compared to gas.
Calima currently holds approximately 72,000 acres of drilling rights in the Montney, which is Canada’s most active oil and gas region and is targeting a liquids-rich extension at the northern tip of the basin.
Commenting on the flow rates, Calima Managing Director Alan Stein said:
We are extremely pleased with the initial production rates from Calima-2 which compare favourably with other wells in the region.
“This satisfies the primary objective of the drilling campaign and confirms that the Calima Lands lie within the sought-after liquids rich zone of the Montney Formation. This is an exciting time for Calima shareholders, and we look forward to releasing further results over the coming days.
“The delays associated with the coiled tubing unit have been frustrating given the narrow weather window in which we can operate. Fortunately, with this outstanding performance from Calima-2, we will have all the basic data needed to calculate the metrics to demonstrate that we have opened up a new liquids-rich Montney play in British Columbia,” he said.
The Calima-3 well remains on the verge of delivering flow testing results, with the well currently returning water injected during reservoir stimulation.
As the water rate decreases, Calima will be looking for an increased rate of gas and hydrocarbon returns.