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A drill rig in the Montney Formation

Calima moves closer to drill campaign with road-build permit

Barely six days after revealing it had topped up its land portfolio with 72,014 acres of prime oil and gas real estate in the liquids-rich Montney Formation, Calima Energy announced in a market update this week it had secured an important road-building permit from the British Columbia Oil and Gas Commission.

The ASX-listed company said the approval to construct, maintain and operate an oil and gas road into its heartland has taken it past an important signpost on the journey towards shifting from the acquisition phase to an operational status.

The Perth-based company said, “This is a significant project milestone being the first step in the regulatory process to secure all the various approvals and authorisations required ahead of drilling.”

Calima is chomping at the bit to get boots on the ground in The Montney to prove up its tantalising, liquids rich resource theory. However, the tough terrain in remote British Columbia presents its own set of challenges, especially in the icy cold of winter. 

The company said, “The Calima Lands are covered by a network of tracks that have the potential to provide access, however none of these are currently maintained. The most effective way to create access is to use compacted snow on an existing track to create a road surface. This is common practice for early stage drilling in many parts of the Montney Basin with more expensive, all-weather road access being constructed once development is under way and cash flow imminent.”

It is the size of the prize, however, that has put a spring in Calima’s step on the road to unlocking and releasing a significant reservoir of riches in The Montney

Calima Managing Director, Alan Stein, said: “The award of the road authorisation represents a significant milestone as the company shifts its focus from building its land position and sub-surface geoscience towards the operational activity necessary to drill wells.”

Only recent advances in horizontal drilling, multi-stage hydraulic fracturing and completion design have made it possible to develop the considerably thick siltstones saturated with oil and gas in the Montney Formation. As a result, the Montney has become one of the most attractive plays in North America.

The National Energy Board of Canada has estimated that the siltstones of the Montney could contain a massive 449 trillion cubic feet of gas, 14,521 million barrels of gas liquids and 1,125 million barrels of oil.

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