Calima Energy Ltd (ASX:CE1) (OTCMKTS:RLTOF) (FRA:R1Y) has upgraded oil & gas resources at its Calima Lands property within the Montney acreage in British Columbia, Canada, to the Development Pending category.
After acquisition of the Tommy Lakes property and facilities 248.9 billion cubic feet of gas and 12.4 million barrels of light oil and natural gas liquids of Contingent Resources have been upgraded.
The company now regards a significant portion its Montney acreage as being development-ready subject only to securing the necessary funding to construct a tie-in pipeline.
Once the company secures funding then according to the reporting standards these Development Pending resources could be classified as 2P reserves.
These resources, which have been independently assessed by McDaniel & Associates, lie within the acreage recently secured under a 10-year Continuation Lease.
“Significant resource potential”
Calima’s Canada president Micheal Dobovich said: “Our 2019 drilling campaign confirmed the significant resource potential of our Montney acreage and subsequently the acquisition of Tommy Lakes infrastructure has resulted in the elevation of 248.9 billion cubic feet of gas and 12.4 million barrels of light oil and natural gas liquids into the Development Pending category.
"The significant scale of the opportunity offered by the company’s Montney position is clearly evident from the McDaniel assessment and given that all of our contingent resources lie within leases that do not expire until 2029, our tenure is secure while we time our development appropriately.
McDaniel & Associates have evaluated crude oil, natural gas and natural gas products prospective resources of the Calima Lands according to 2018 PRMS standards.
The best estimates are:
- The best estimate gross un-risked Contingent Resources – Development Pending is 248.9 Bcfg and 12.4 Mmbo;
- The best estimate gross un-risked Contingent Resources (2C) Development on Hold and Development Pending is 888.1 Bcfg and 44.4 Mmbo;
- The total best estimate of gross un-risked Prospective Resources (2U) is 1.68 Tcfg and 84 Mmbo; and
- Estimated Ultimate Recovery (EUR) 8.4 Bcf per well yielding ~50 barrels per Mmcf gas.
“Signs of long-term improvement”
Dobovich added: “Despite the headwinds of current oil pricing, the Canadian gas market shows continued signs of long-term improvement ensuring the company is well-positioned to initiate a development program as oil prices rise towards pre-COVID levels.”