Gemini 4 Well Campaign IP30 Production on Target

- All four Gemini Sunburst horizontal wells have been completed, and have achieved their initial 30-day production rates (“IP30”)
- The average of the four well program, over their respective 30-day initial production rates, was 176 boe/d (75% oil) per well
- The total cost for the four well program was $C4.8 million, which equates to an average cost of $1.2 million per horizontal well (2 of which were dual-leg horizontal wells, and 2 were single-leg) inclusive of drilling, completing, equipping and tie-in

Calima Energy Limited is pleased to announce that all four Gemini wells are tied-in and have achieved their IP30 rates. As previously announced, Calima embarked on a four well horizontal drilling program (the “Gemini Program”) at its Brooks Alberta asset, targeting the Sunburst Formation. The wells were drilled on average in 6.9 days and brought on production an average of 25 days after spudding. The drilling was successful, and the overall program was below budgeted costs. The average IP30 production rate of the four Gemini wells was 176 boe/d (75% oil) per well. The four wells in aggregate are currently producing 650 boe/d (89% oil).

Jordan Kevol, CEO and President: “All of the Gemini Sunburst wells are tied-in and have been on production for at least 30 days. We are pleased with the results of this drilling program on both a geological and a capital basis. Results were varied, and the average production of the four wells was close to our average type-curve and was within the risked budgeted number range used in our model. The program as a whole was under budget on drilling, completion, equipping, and tie-in (“DCET”) costs. We have now moved on to our 2021 Thorsby Sparky Formation three horizontal well LEO program, and drilling is well underway on our second well, Leo #2.”

Next steps at Brooks
Calima has begun the licensing process for more wells in the Brooks area and anticipates drilling more wells as early as the fourth quarter of 2021. These additional wells may include both Sunburst Formation and Glauconitic Formation horizontal wells and will contribute towards 2022 production rates.

Calima has a vast inventory of both Sunburst and Glauconitic wells in its Brooks area and continues to add more locations to the existing horizontal location count of approximately 140 net locations in the Greater Brooks Area, through continued mineral leasing, and participation in Crown land sales, with an aim to add more locations than we drill every year.

Brooks
Calima has an established core position of land (~83 net sections) and significant infrastructure that provides a foundation for growth and expansion with year-round access. The Brooks asset averaged net production of ~2,033 boe/d in June 2021 with an average 94% working interest. Blackspur/Calima has drilled 57 Brooks wells since 2014.

The majority of the Brooks production is from the Sunburst and Glauconitic Formations. Calima’s current infrastructure can process oil volumes up to 7,000 bbl/d. Brooks reservoirs contain a low CO2 in reservoir at ~2%, and multi-well pad drilling reduces our environmental footprint. Future growth from the Brooks asset will come from the ~140 net locations that were previously identified. These locations include the 30.5 net booked PUDs. Additional reserves are expected to be realized through implementation of enhanced oil recovery projects. The Company forecasts:

• The recovery factor from primary production at 14%, leaving significant recoverable reserves
• Water injection into vertical wells can increase the recovery factor up to 25%

Sunburst Wells
The Sunburst wells being drilled are conventional 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 drilled in the horizontal section is 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, assuming a single horizontal leg. All four wells (Gemini 1, 2, 3 and 4) are classified as development wells, as they were drilled into existing Sunburst oil pools, which have been delineated by existing Sunburst wells, and 3D seismic. The additional production is being processed at existing Calima oil facilities.