Drilling Update - Gemini 1, 2, 3 & 4 Wells Sunburst, Brooks

Source: www.gulfoilandgas.com 7/8/2021, Location: North America

Highlights:
• Gemini #4 has finished drilling and expected to be on production by 28 July 2021
• Calima has drilled 4 Gemini Brooks Sunburst wells – Revenues from these wells will be recognized partially in July and from August onwards. The table below summarises the status of all wells
• 3 Thorsby development wells (designated Leo #1, #2, and #3 wells) are scheduled for drilling, completion and tie-in in Q3
• Drilling campaign designed to achieve year end production guidance of 4,500 boep/d and the generation of sustainable free cash flow

Jordan Kevol, CEO and President:
“The Company has finished drilling its 4-well Brooks Alberta program. We are very pleased with the efficiency and expediency that the Calima Operations Team executed on this program.

The drill program costs (drilling, completion and tie-in) to date are on budget. The rig has been released, and we are now preparing for our next drilling program at Thorsby Alberta which is anticipated to commence in late August pending nearby drilling rig scheduling.

Three multi-stage fractured horizontal wells are planned for the Thorsby program. Initial production results from the recent Brooks program will become available later this quarter.”

Calima Energy Limited is pleased to confirm that Gemini #4 well has been drilled and the rig has been released. The downhole pressure recorders will be pulled in ~7 days at which time completions will begin. The gas will be tied into a nearby third-party facility, and the fluid trucked to a Blackspur oil processing facility. This well was drilled in the Alderson strike area, near Brooks Alberta, and is a new area of focus for the Company. The well is anticipated to be on production on 28 July 2020, at which time the clean-up period will commence. Clean-up typically lasts 5-10 days following which the 30-day initial production period (“IP30”) will begin.

4 Brooks Sunburst well have now been drilled. Gemini 1-3 wells were drilled within the existing known reserves, whilst Gemini #4 is a step out well and if successful has potential to add reserves to the Company’s P1 and P2 reserves.

Sunburst Wells
The Sunburst wells being drilled are conventional, open hole horizontal wells, meaning they require no stimulation such as hydraulic fracturing. The true vertical depth (TVD) of the target Sunburst zone is ~1,000m and the average lateral length of the horizontal section is typically 775 meters. The combination of the shallow target depth, relatively short horizontal length, lack of need for stimulation, and short tie-in, results in an all-in cost estimate for each well to be ~C$1 million on average. At US$70WTI, -$14.5 WCS differential, 1.23 CAD/USD and $3.00 AECO, the Sunburst type curve achieves 50% payback by day 90, and 100% payback by month 5. By month 36, the type-curve well has paid out more than 4.5X.

Brooks
Blackspur has established a core position of land (~83 net sections) and significant infrastructure that creates a foundation for growth and expansion with year-round access. The Brooks asset averaged production of a net ~2,215 boe/d in May 2021 with a 94% working interest. Blackspur has drilled >50 wells to date. Brooks production comes from the Sunburst and Glauconitic Formations. Blackspur’s existing infrastructure can process up to 7,000 bbl/d oil. Brooks reservoirs contain a low CO2 in reservoir at 2%, and our multi-well pad drilling reduces our environmental footprint. Blackspur continues to add more locations to its robust count of ~140 locations in the Greater Brooks Area, through continued mineral leasing, and participation in Crown land sales, with an aim to always add more locations than are drilled every year. These ~140 locations include ~35 booked PUDs. Although the current program is solely focussed on Sunburst drilling, at current oil prices the Company is excited to begin adding Glauconitic Formation horizontal locations to its upcoming drilling plans. These Glauconitic wells can be very impactful to corporate production levels and reserve bookings. Additional reserves are also expected to be realized through implementation of enhanced oil recovery projects.


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