Calima Energy Ltd (ASX:CE1) chairman Glenn Whiddon presented at the Proactive Energy Webinar on December 16, highlighting the company’s development-ready Calima Lands asset within the Montney Formation in British Columbia, Canada.
The company has more than 60,000 acres of drilling rights in the Montney with neighbours including Canadian producers Saguaro Resources to the south and more recently Canadian Natural (TSE:CNQ), Tourmaline Oil Corp (TSE:TOU) and international operators Conoco Phillips (NYSE:COP).
In July, Kelt Exploration Ltd (TSE:KEL) agreed to sell its Inga Assets to ConocoPhillips (NYSE:COP) for C$510 million, and this is about 130 kilometres south of Calima’s acreage, before Canadian Natural made a takeover bid for Painted Pony (at C$469 million) in August to build on its Montney resources.
Whiddon said the company saw the movement and consolidation of land in this region as being positive for the future of the Calima Lands property.
He said: “These companies are building their strategic position in the Montney and will be controlling a major portion of the basin going forward.
“This is something that happened in Queensland, Australia, a number of years ago when LNG facilities were being built and junior resource companies were bought out by the majors as consolidation and critical mass stories took place.”
As the Canadian Government continues to invest around C$30 billion on building new export facilities as well as the Trans Mountain pipeline, Whiddon said the infrastructure pressures, which had been apparent in the Montney over the last five years, would start to fade.
“We see our asset as a development-ready asset which is able to be brought into production within 12 months with permits ready,” he said.
Tommy Lakes facilities
As well as the Calima Lands asset, the company also owns the Tommy Lakes infrastructure which includes more than 30 kilometres of pipe, three compressor stations, an accommodation camp and a tie-in to a 12” sales gas line.
The facilities, which provide cost-efficient access to the North River Midstream pipeline, Jedney processing facility and access to regional markets via major pipeline networks including NGTL, Alliance and T-North, is being maintained in standby mode pending production start-up.
Calima CFO Mark Freeman described Tommy Lakes as a "game-changer" and said it gave the company and any potential joint venture partner the ability to sell oil and gas in the east while drilling wells and simultaneously allowed for the development to the west if Calima wished to produce more than 50 million standard cubic feet (Mmscf) per day.
The Tommy Lakes facilities are fully permitted and strategic to the company as they connect to regional, national and international pipeline networks, including major oil and gas markets such as the US Pacific Northwest, US Midwest and Western Canada.
Focused on delivering value to shareholders
With gas prices increasing rapidly, which is reflected in the mergers and acquisition activity in the Montney over the last few months Whiddon said the company remained focused on growing and continuing to deliver value to shareholders.
He said Calima was leveraging off the company’s asset base including the Tommy Lakes facility, the first-world operating standards in Canada and most importantly the ESG standards that Canada has adopted.
“All of this is a positive for the oil and gas sector going forward,” he said.
Proactive Energy Webinar
To watch the event, please click here.