Challenger Energy (CEG), has announced positive update at the Saffron-2 appraisal well, currently being drilled at the Saffron project in the South-West Peninsula of Trinidad, to complement its P50 expectation of Saffron-1 production rates in the range of 200 - 300 bopd.
As previously advised, the objectives of the Saffron-2 well were twofold:
- To achieve profitable immediate production and cashflow
- Enable the Company to define an appropriate development plan for the Saffron field as a whole.
The target depth of the Saffron-2 well is approximately 4,550ft, with the well design comprising three sections:
- The top section; to intersect and assess sands of the Upper Cruse and upper parts of the Middle Cruse - these being zones previously intersected and logged in the Saffron-1 well.
- The middle section; to intersect and assess deeper Middle Cruse sands - these being zones previously intersected in the Saffron-1 well, encountering hydrocarbons, but which were not able to be logged and produced from the Saffron-1 well
- The lower section; to intersect and assess the Lower Cruse sands - as with the middle section, these being zones previously intersected in the Saffron-1 well, encountering hydrocarbons, but which were not able to be logged and produced from the Saffron-1 well.
The budgeted total cost for the Saffron-2 well is $3 million, and the anticipated drill time in in the range of 25-30 days since spudding at 7.30pm on 23 May 2021.
Today’s update reveals drilling of the top section of the Saffron-2 well has been safely completed to a depth of 1,593ft (at 17 1/2"), and successfully logged in accordance with schedule and budget.
The results of the logs for the drilling completed to date are consistent with the results of comparable logging from Saffron-1 from these zones.
Importantly, the casing is being run and cemented in this section and will be approximately 1,120ft deeper than the equivalent casing point in the Saffron-1 well, providing a better foundation for drilling to the deeper targets.
Outlook
Challenger will now look to complete drilling at the middle section of the Saffron-2 well (at 12 1/4") to a target depth of approximately 2,800ft.
The Company expects to encounter hydrocarbons, as identified in the Saffron-1 well in the deeper Middle Cruse, and acquire open hole wireline logs that were not previously able to be run.
Thereafter, the drill plan is for the Saffron-2 well to be drilled to a final target depth of approximately 4,550ft, logged, sampled and cased.
The final lower section of the Saffron-2 well is expected to produce hydrocarbons that were identified in the Saffron-1 well in the Lower Cruse but were unable to be logged and tested in that well.
View From Vox
Investors should note that, notwithstanding technical challenges of drilling Saffron-1, it has consistently produced since completion with all Saffron-1 production sourced from the sands of the Upper Cruse and upper Middle Cruse.
Clearly, the primary targets of interest for the Saffron-2 well are therefore the Lower Cruse and Lower-Middle Cruse sands, and based on the logs completed to date, if Saffron-2 turns out to be comparable to Saffron-1, it will be a significant valuation inflexion point for the Company.
Reasons to Challenger Energy
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.
Trinidad and Tobago
- Five producing fields
- Two appraisal / development projects
- A prospective exploration portfolio in the South West Peninsula
Suriname
- Onshore appraisal / development project
Exploration licences in Uruguay and The Bahamas are highly prospective, and offer high-impact value exposure within the overall portfolio value.