Calima Provides Operations Update

Source: 7/4/2022, Location: Not categorized

• The Leo #4 Frac program has been completed. The Leo #4 is a step-out oil well that was drilled at Holborn (North Thorsby) in January 2022. The well was drilled into the Sparky Formation and outfitted with a 52 stage frac liner. The well will be shut-in for 2 weeks whilst a temporary oil battery is set up and the gas sales pipeline is tied-in following which the well will undertake an extended production test.
• Gemini #9 finished drilling on 21 June 2022 and is currently being completed and tied-in. The well is expected to be placed on production next week. Oil and gas shows while drilling were as expected.
• Pisces #4 spudded on 22 June 2022 and finished drilling on 30 June 2022. Oil and gas shows while drilling were as expected. The well is a follow-up to the most productive Glauconitic well (15-36 well) previously drilled by Blackspur, recovering 133,000 bbls of oil since mid-2018. Pisces #4 has a 33 stage frac liner cemented in place over the horizontal length. The well is expected to be fracture stimulated in the coming weeks and on production by mid-August 2022.
• Pisces #5 well (50% WI) was spudded on 2 July 2022 and is a follow-up to a 1st generation Glauconitic well (04-05 well) drilled by Blackspur in 2014. The 04-05 well has produced 86,000 barrels of oil since 2014 and was drilled and completed with a 17 stage frac liner. That well has recovered 86,000 bbls of oil since mid-2014. The Pisces #5 well will have a 25-30 stage frac liner. Calima expects Pisces #5 to outperform the 04-05 well.
• Gemini #8 finished drilling 11 June 2022 and is expected to be placed on production over the next few days.
• June production was down due to:
o Thorsby: Our third-party gas processor’s scheduled plant turn-around in Thorsby resulted in production being reduced by 625 boe/d for ~7 day period. This work was accounted for in our budget and is now complete. The wells are back producing at pre-shutdown volumes.
o Brooks: The gas compressor at the Company’s 2-29 oil and gas battery at Brooks went down 24 June 2022. The operations team were able at short notice to secure and install a replacement compressor within a 6-day turn around. The 2-29 battery was required to run at 50% capacity over that week. The Company will refurbish the old compressor and retain it in inventory.
• As previously announced, the Company’s swap hedge book expires 31 December 2022 with minimum coverage over the December quarter (~562/bbl @ C$94/bbl). The Company has recently implemented a revised hedge policy that provides the Company with both exposure to upside and protection from downside oil price movements in the form of a put-call collar topping up our coverage for Q4 2022. The collars implemented for Q4 are 250 bo/d at a cost of US$2.80/bbl.

Jordan Kevol, CEO and President:
“Gemini #8 and #9 and Pisces #4 have been successfully drilled. The Company is pleased with the successful Leo #4 fracture stimulation and islooking forward to the subsequent flow test program. Well downtime has affected our average production for June with our 3rd party gas plant requiring maintenance at Thorsby and mechanical failure of the compressor at Brooks 2-29. However, production is on track to be back at ~4,100 boe in early July. In addition to this we anticipate Gemini #8 and #9 to be on production and adding to volumes and revenue over the coming weeks.”

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