Thorsby Three Well Drilling Update

Source: www.gulfoilandgas.com 8/19/2021, Location: North America

HIGHLIGHTS
• The 3 well Leo drilling program has commenced in the Sparky Formation, Thorsby area of Alberta, Canada
• The Leo #1 is presently at ~2,000m measured depth. Intermediate casing has been set and the well is drilling ahead within the Sparky Formation. The well is expected to complete drilling this weekend, following which Leo #2 will commence drilling from the same pad
• Leo’s 1, 2 and 3 wells (3rd Generation) Sparky Wells have been optimised and will average ~3,800m MD (400m longer) and 53 fracture stages averaging 1.0 tonnes of sand per meter over the horizontal length
• IP90 production rates per well are ~274-460 bbl/d with NPV10 of C$6.5-$8.8 million based on EUR’s of 352,000 – 462,000 boe with 80% oil
• Wells average approximately 10 days each to drill and will be subsequently fracture stimulated as part of the completion process. All wells are adjacent to Calima’s oil processing facility. This pad contains two of the best performing Thorsby Sparky wells
• These wells are considered development in nature with low geological risk
• An update of the 4 Gemini IP30 well rates will be provided at the end of August 2021

Jordan Kevol, Calima CEO, states that:
“We are very excited to be back drilling in the Thorsby area. The last well drilled in this area was in January 2019. We are drilling near some of our best wells to date and planning to implement a larger frac intensity relative to the previous wells with improved economics expected. The 3 wells have minimal on-lease tie-in’s and will flow into our existing oil processing facilities that have ample room for the hydrocarbons. We have a lot of running room in the Thorsby Sparky play, and these wells are expected to be very impactful to our bottom line with IP90’s of up to 460 barrels of oil per day.”

Leo #1 Well, 100% WI
Leo #1 has set intermediate casing at 1,546m measured depth, and is drilling ahead in the horizontal leg portion in the Sparky Formation. The well encountered drilling complications during the intermediate section and subsequently was side-tracked. The well is expected to complete drilling this weekend.

The rig will then be skidded over ~15 meters and the next Sparky well, Leo #2 will spud. Leo #3 will be spudded immediately following Leo #2 from the same pad.

The completion and fracture process for the 3 Leo wells is expected to begin in the third week of September with initial production in late October anticipated. All wells are being drilled from a single pad location adjacent to the Company’s oil processing facility. This pad contains two of the best performing Thorsby Sparky wells which have produced greater than 300 mbbl oil and 370 mboe since July 2018.

Sparky Economics
Calima has drilled 11 Sparky wells to date, of this total the tier 1 wells (2nd Generation) averaged ~3,400m measured depth (MD) and 36 fracture stages averaging 0.8 tonnes of sand per meter over the horizontal length costing ~$2.5 million on average.

Leo 1, 2 and 3 wells (3rd Generation) Sparky Wells have been optimised and will average ~3,800m MD (400m longer) and 53 fracture stages averaging 1.0 tonnes of sand per meter over the horizontal length. The optimised wells are budgeted for $3.2 million per well and the Company anticipates IP90 rates of 460 boe/d (80% oil) and cumulative production of 462,000 boe.

Thorsby Development Field
Production from the Leo program will come on stream in the fourth quarter of 2021. Thorsby provides a land base of ~108 net sections (69,120 net acres) that can be developed from multi-well pads, all of which have year-round access and minimise the environmental footprint with oil processing facilities of 3,000 bbl/d oil capacity. Thorsby wells averaged gross production of ~850 boe/d in June 2021 (100% WI) solely from the Sparky Formation. There are 11 wells drilled to date with future well recoveries estimated at 352 - 462 mboe (80% oil).

Well inventory includes 89 net Sparky and 12 net Nisku wells identified with multiple pools to be delineated (28 booked reserve Sparky locations). Selected wells demonstrated significant type curve outperformance in the Sparky formation.


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