Calima builds its war chest with more Montney Formation acreage
Calima Energy has added 2,738 acres of prime Canadian oil and gas real estate to its portfolio in the liquids-rich, sweet spots of the Montney Formation in Northeast British Columbia.
The new kid on the block in The Montney, having entered via a backdoor listing in August, said its core acreage position in the Montney Formation had expanded by four per cent following the latest round of bidding in the Government land auctions. The Perth-based explorer now holds 70,645 acres of drilling rights in one of the hottest liquids rich gas plays in North America, estimated by leading industry analyst Wood Mackenzie to have attracted C$5.2 billion worth of investor funds in 2017.
Alan Stein, Calima’s Managing Director said: “This most recent acreage award moves us close to completion of our acreage acquisition strategy.”
Calima’s strategy of acquiring coveted exploration licences in the Montney Formation received a shot in the arm from crude oil prices recovering 20 per cent to $60 levels during 2017.
The prospects of many Montney Formation hopefuls soared last month when Canadian pipeline giant, Transcanada, revealed during an investor briefing that it was wooing prolific British Columbia acreage holders with pipeline prospects to the Gulf of Mexico.
The Calgary-based company said it was also closer to a final investment decision for the hotly debated Keystone XL pipeline, a project planned to take Canadian oil to US refineries that stalled under Barack Obama’s presidency, but has been revived by current White House incumbent Donald Trump and his Secretary of State, ex-ExxonMobil boss Rex Tillerson.
In other positive news for Calima and their Montney peers, Opec decided last week to extend oil production cuts, ostensibly to further stimulate rising crude oil prices and to support Saudi Arabia’s $US2 trillion listing of its national oil company, likely to be the world’s biggest company float.
Two months ago, Calima’s claims of liquids-rich acreage in its Montney Basin position were backed up by a leading independent geologists report from McDaniel and Associates. The consultant said Calima’s acreage had much in common with lucrative neighbouring ground held by Saguaro Resources.
Saguaro have invested C$400 million on their leases to facilitate 10,000 barrels of oil production per day and said it expected an internal rate of return of 40-83 per cent per well at condensate and gas prices as they were in early October.
McDaniel compared well data from Calima-owned acreage in the Caribou area with land to the south in the Laprise area, operated by Saguaro.
The consultant said the Middle and Upper Montney reservoirs in Calima’s portfolio not only compared favourably to that of Saguaro, but featured higher pay thickness and better average porosity in Caribou than at Laprise.