Calgary, Alberta–(Newsfile Corp. – March 7, 2024) – Coelacanth Energy Inc. (TSXV: CEI) (“Coelacanth” or the “Company“) announces that its Board of Directors has approved a capital budget (“Budget”) of up to $128 million to be invested in 2024 and Q1 2025. Substantially all of the Budget will be spent at Two Rivers where Coelacanth is developing its large Montney acreage position. Approximately $80 million is to be invested in infrastructure at Two Rivers East where the Company had previously announced its successful first pad (see below) with drilling and completions estimated at $45 million including the drilling and completion of 4 additional Lower Montney wells on its 5-19 Pad plus complete a previously drilled Upper Montney well on the 5-19 Pad.
The infrastructure is anticipated to be completed for April 1, 2025, at which point Coelacanth will be able to produce a total of 10 wells from the 5-19 Pad (5 current wells and 5 new budgeted wells).
TWO RIVERS EAST
The Budget includes approximately $50 million for a new battery facility (“Facility”) at Two Rivers East designed for gas compression/dehydration, oil treating and water handling, plus $20 million for gathering and sales lines to connect from the 5-19 Pad through the Facility to a mid-stream gathering line. Manufacturing of components for the Facility will commence shortly with in-field construction for both the Facility and pipelines scheduled for Q4 2024 and Q1 2025.
The project is anchored by the Lower Montney but has additional potential upside in both the Upper Montney and Basal Montney. As previous released, the average rate achieved for the 3 Lower Montney wells was 1,338 boe/d per well comprised of 729 bbls/d of 39 API light sweet oil and 3.7 mmcf/d of liquids-rich gas. The rates per well were similar as outlined in the table below:
Well | Oil – bbls/d | Gas – mmcf/d | Total – boe/d | % Light Oil |
C5-19 | 818 | 3.2 | 1,345 | 61 |
D5-19 | 527 | 4.2 | 1,222 | 43 |
E5-19 | 841 | 3.6 | 1,448 | 58 |
Average | 729 | 3.7 | 1,338 | 54 |
Of the 10 wells anticipated to come on-stream in April 2025, 8 are Lower Montney wells, 1 is an Upper Montney well, and 1 is a Basal Montney well.
TWO RIVERS WEST
Coelacanth had announced in October 2023 that it had completed the 2 Upper Montney wells on its 10-08 Pad at Two Rivers West and placed the first well (C10-08) on production at a rate of 542 boepd comprised of 225 bbls/d of 42 API light oil, 1.75 mmcf/d of liquids-rich gas, and approximately 26 bbls/d of ngls. The well produced at approximately that rate for the first 4 months but was restricted due to the large volume of water also being produced and the lack of pump capacity at Coelacanth’s facility. Based on log properties, the water is likely being produced from the top of the Upper Montney where a localized wet zone was identified.
In February 2024, Coelacanth was able to increase pump capacity and ran a short-term test (2.2 days) on C10-08 with most of the restrictions removed to determine capability of the well. Removing the restrictions resulted in the well achieving a test rate of 1,284 boepd comprised of 376 bbls/d of oil, 5.0 mmcf/d of gas and 75 bbls/d of ngls. The test rate significantly exceeded expectations especially considering the rate achieved was after the well had already been producing for 4 months.
After the test, both the C10-08 and B10-08 were placed on production at restricted rates until modifications can be made to accommodate more water and gas handling and egress. Coelacanth is now in process of determining the infrastructure capital required to scale up the Two Rivers West Project that will include installing a new sales gas line in addition to adding gas compression and water handling.
From a go-forward perspective, the test provides valuable positive insights on the potential longer-term increased deliverability and ultimate recoveries per well from the Upper Montney at Two Rivers West. The C10-08 test also has a positive correlation to the Upper Montney Well at the 5-19 Pad (drilled but not completed) that has similar characteristics but does not include wet Upper Montney zone identified at Two Rivers West.
FINANCIAL
Coelacanth estimates that it had approximately $67 million of positive working capital and no debt at the end of 2023. Funding of its Budget is anticipated to come from cash on hand, cash flow and short-term debt.
FOR FURTHER INFORMATION PLEASE CONTACT:
COELACANTH ENERGY INC.
2110, 530 – 8th Ave SW
Calgary, Alberta T2P 3S8
Phone: 403-705-4525
www.coelacanth.ca
Mr. Robert J. Zakresky
President and Chief Executive Officer
Mr. Nolan Chicoine
Vice President, Finance and Chief Financial Officer