Challenger Energy provides update on production testing at Saffron-2 By Investing.com

By Samuel Indyk

Investing.com – Challenger Energy has provided an update in relation to ongoing production testing of the Saffron-2 appraisal well in Trinidad.

The oil & gas exploration company said a commercial production rate of 81 barrels of oil production per day has been established at Saffron-2 from approximately 66 feet of Middle Cruse reservoir units. The company confirmed that produced oil is already being sold and generating immediate revenue.

Challenger Energy (LON:CEG) also said to maximise near-term production income additional clean-up, testing, and optimisation of producing zones is currently underway. The Upper Cruse reservoir units also remain to be perforated and produced.

“Pleasingly, testing in the Middle Cruse has resulted in an economic level of production thus far being achieved, and we are working to increase production further,” said Challenger Energy Chief Executive Officer Eytan Uliel.

“We are already selling the oil being produced, so for the immediate future the plan is to maximise production revenues from those Middle Cruse units, as well as bringing on additional production from the as yet unperforated Upper Cruse units, in due course.”

Testing of the Lower Cruse reservoir was halted due to the impact of mobile shales on the well bore, despite the units exhibiting good pressure and producing high quality oil.

Looking forward, the company said that well data and projection of aggregated well performance is being used to reassess overall Saffron field resources and ecnomics, with work underway to determine the optimal forward plan for development of the Saffron project as a whole.

“Focus now turns to integrating what we have learned from this well, to updating our resource estimate accordingly, and to defining the best way forward for the project as a whole – building production and cashflow remains our overarching strategic imperative,” Uliel added.

At 10:25BST, shares in Challenger Energy were trading lower by 23% at 1.347 pence per share.