Calima flags maiden dividend from Canadian oil production

Canadian oil producer Calima Energy expects to distribute up to thirty per cent of the free cash flows from its Canadian oil and gas operations back to shareholders in 2022 due to continued operational success and high global oil prices. The remainder of the operational cash flows will be ploughed back into the development of Calima’s twenty-one million barrels of oil reserves with 64 locations booked for drilling.

Interestingly, the company says it now has sufficient funds to consider strategic acquisitions that are complementary to its existing operations.

The global energy market is on fire with benchmark West Texas Intermediate Crude flying along at US$82 a barrel. Markets are even hotter in Western Canada with the Western Canadian Select crude oil differential at US$14.50 per barrel and Alberta gas hub prices flashing up to C$4.80 per gigajoule. Calima has not missed a chance to fan the flames either with continued non-stop operational success at its Brooks and Thorsby oil fields that are now generating significant free cash flows and feeding Calima the oxygen it needs to get on the acquisition trail and payout out its very first dividend.

Management says it can now plan at least 13 new wells in 2022 and with continued drilling success and market strength, the well count could increase even further. Whilst current forecasts highlight the opportunity for revenue to flare up in 2022 to between C$112 and C$147 million, with free cash flows of between C$14m C$37m, Calima says it will provide updated 2022 guidance prior to year-end 2021.

Its purchase of the Blackspur Oil Corp assets at Brooks and Thorsby back in April 2021 could not have been better timed given commodity prices have risen significantly since then. Calima has placed four new Brooks field wells on production since April and three new, third generation Leo wells are approaching initial flow back in the Thorsby field. While the company expects the new Thorsby wells to flow at an initial 90 day rate between 270 and 460 boe/d at 80 per cent oil, their full potential will not be known until Christmas or the New Year according to the company.

Our long-term strategic focus is on maintaining the highest Environmental, Social and Governance standard along with commercial and operational excellence to generate superior returns to shareholders. I wish to thank our team in Canada led by Jordan Kevol for their concerted commitment to the Company’s progress and growth.

Calima is also continuing to advance options to monetise its revered liquids rich Montney asset in British Columbia with the assistance of Calgary based Peters and Company Limited.

With continued smooth operations, increasing cash flows, progress on a Montney asset deal and intriguing hints of further strategic acquisitions to complement existing operations, it’s beginning to look a lot like Christmas around the Calima boardroom table.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au