Challenger Energy Group PLC Commencement of the Drilling of Saffron-2 Well (7803Z)
May 26 2021 - 2:00AM
UK Regulatory
TIDMCEG
RNS Number : 7803Z
Challenger Energy Group PLC
26 May 2021
26 May 2021
Challenger Energy Group PLC
("Challenger Energy" or the "Company")
Commencement of the Drilling of Saffron-2 Well
-- Drilling of the Saffron-2 appraisal well in Trinidad and Tobago has commenced as scheduled
-- The Saffron-2 well has two primary objectives:
o To provide immediate production and cash flow
-- A successful Saffron-2 could produce between 200 to 300 bopd,
resulting in US$1.8 - US$2.6 million p.a. of net cash flow to the
company
o To inform the most efficient way to develop the Saffron
field
-- Internal estimates are that in a success case the Saffron
field is capable of producing 1,000 - 1,500 bopd by end 2021,
providing a cash flow run rate of US$8 - US$12 million p.a.
-- A full field development could achieve peak production rates
of up to 4,000 bopd and yield cash flow in excess of US$25 million
p.a.
-- The Saffron-2 appraisal well is a follow up to the successful
Saffron-1 exploration well drilled in March 2020 that resulted in
discoveries in both the Middle Cruse and Lower Cruse reservoirs.
Significant lessons were learnt during the drilling of Saffron-1 to
inform the drill plan for Saffron-2
-- Saffron-2 is a low cost onshore well with a budget, inclusive
of production completion, of approximately US$3 million, and
expected to take between 25 and30 days to complete
Eytan Uliel, Chief Executive Officer designate, commented:
"Following completion of mandatory inspection and reporting
processes in Trinidad, we can now advise that drilling of the
Saffron-2 appraisal well has commenced, with the well having spud
on 24 May (UK time, late 23 May local time). The well will be
drilled over the next 25-30 days, to a total depth of approximately
4,500 feet.
The objectives of the Saffron-2 well are twofold. Firstly, to
produce oil and generate cashflow in its own right, with a P(50)
projected production rate of 200-300 bopd and, more importantly, to
inform the appropriate development plan for the Saffron field as a
whole. Based on the Saffron-1 well discovery and subsequent
studies, we believe Saffron is a field capable of growing to
production in the range of 1,000 - 1,500 bopd by the end of 2021,
and which could ultimately achieve production rates of up to 4,000
bopd in a full field development scenario.
This is an exciting start for Challenger Energy Group, as we
take the first step in our longer-term strategy of developing our
existing portfolio to increase the Company's production and cash
flow. I look forward to updating shareholders with results once the
well has been completed."
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
For further information, please contact:
Challenger Energy Group PLC Tel: +44 (0) 1624
Eytan Uliel, Chief Executive Officer 647 882
designate
Strand Hanson Limited - Nomad Tel: +44 (0) 20
Rory Murphy / James Spinney / Rob Patrick 7409 3494
Shore Capital Stockbrokers Limited Tel: +44 (0) 207
- J oint Broker 408 4090
Jerry Keen / Toby Gibbs
Investec Bank Plc - J oint Broker Tel: +4 4 (0) 207
Chris Sim / Rahul Sharma 597 5970
Gneiss Energy - Financial Adviser Tel: +44 (0) 20
Jon Fitzpatrick / Paul Weidman / Doug 3983 9263
Rycroft
CAMARCO Tel: +44 (0) 020 3757
Billy Clegg / James Crothers / Hugo 4980
Liddy
Notes to Editors
Challenger Energy is a Caribbean and Atlantic margin focused oil
and gas company, with a range of exploration, appraisal,
development and production assets and licences, located onshore in
Trinidad and Tobago, and Suriname, and offshore in the waters of
The Bahamas and Uruguay. In Trinidad and Tobago, Challenger Energy
has five (5) producing fields, two (2) appraisal / development
projects and a prospective exploration portfolio in the South West
Peninsula. In Suriname, Challenger Energy has on onshore appraisal
/ development project. Challenger Energy's exploration licence in
each of Uruguay and The Bahamas are highly prospective, and offer
high-impact value exposure within the overall portfolio value.
Challenger Energy is quoted on the AIM market of the London
Stock Exchange.
https://www.cegplc.com
ENDS
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