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Challenger Energy

provides Saffron-2

drilling update

AIM-listed Challenger Energy, the Caribbean
and Atlantic margin focused oil and gas com-
pany, with production, appraisal, development
and exploration assets across the region, has
provided an update on progress at the Saffron-2
appraisal well, currently being drilled at the of the Upper Cruse and upper parts of the Mid- anticipated rate-of-penetration.
Saffron project in the South-West Peninsula of dle Cruse (these being zones previously inter- Looking Forward: The final section of the
Trinidad. The well is targeting the Middle and sected and logged in the Saffron-1 well, and Saffron-2 well (at 8.5 inches) is currently being
Lower Cruse reservoirs with an expectation which since completion of the Saffron-1 well drilled out, to a final target depth of 4,557 feet
(based upon the Saffron-1 discovery well) of have been the source of consistent oil production (1,389 metres). This hole section will include
production rates in the range of 200-300 bopd. from that well). the primary reservoir targets of interest in the
Highlights: Drilling has advanced through The middle section, to intersect and assess Lower Cruse, which will be logged and (assum-
the lower section of the Middle Cruse to a depth deeper Middle Cruse sands (these being zones ing positive results) sampled via MDT (a wire-
of 2,804 feet (854.7 metres); formations encoun- previously intersected in the Saffron-1 well, line formation testing tool). This process, which
tered in line with pre-drill expectations. Log- encountering hydrocarbons, but which were should be sufficient to provide an indication of
ging has been completed for this section of the not able to be logged and produced from the the aggregate resource and production potential,
Saffron-2 well; hydrocarbon zones defined. The Saffron-1 well). is expected to be completed on or around June
entire middle section of the well has now been The lower section, to intersect and assess the 23, 2021, which timeline remains consistent with
cased and cemented, with drilling of the final previously unproduced Lower Cruse sands. (As an overall 30-day expected drill.
stage of the Saffron-2 well underway; objec- with the middle section, these zones were inter- Thereafter (and assuming positive results),
tive in this final section of the well is to define sected in the Saffron-1 well but were not able the well will be lined and readied for produc-
the resource potential of the Lower Cruse, and to be logged and produced from the Saffron-1 tion testing. It is expected that the process of
thereafter production test these zones. well.) preparing for production testing (including
Eytan Uliel, Chief Executive Officer, com- The primary targets of interest are the Lower perforation) will take two to three weeks, such
mented: “I am pleased to provide a further Cruse and deeper Middle Cruse sands. The that initial production could occur in around
interim update on the drilling of the Saffron-2 budgeted total cost for the Saffron-2 well is mid-July.
well, where the middle section of the well has $3mn, with an anticipated drill time in the range The Company expects to provide a further
now been successfully drilled, logged, cased of 25-30 days. update at completion of drilling of the final sec-
and cemented. As with the first section of the The Saffron-2 well was spud at 7:30pm on tion of the Saffron-2 well.
well, drilling has progressed in-line with pre- May 23 (Trinidad time), and as advised by the Challenger Energy, June 14 2021
drill expectations, albeit slightly overtime due Company on June 2, 2021, the top section of Saf-
to severe weather and COVID-19 constraints fron-2 was safely completed to a depth of 1,593
impacting access to site. Technically, the results feet or 485.6 metres (at 17.5 inches), and success- SERVICES
thus far are in-line with pre-drill expectation, fully logged, cased and cemented.
with hydrocarbons now defined in both well Since then, the middle section of the Saf- Borr Drilling entering MoU
sections to-date, as prognosed, and with initial fron-2 well has been safely and successfully
petrophysical analysis of the top two sections drilled (at 12.25 inches) to a depth of 2,804 feet with Pemex to streamline
of the well indicating formation quality and (854.7 metres), logged, cased and cemented.
thickness consistent with Saffron-1. Most signif- The well penetrated various Middle Cruse zones Mexico operations and
icantly, in this stage of drilling the use of synthet- including hydrocarbons zones as prognosed
ic-based mud has worked as intended, enabling pre-drill, and with drilling rates and impact on improve liquidity
for faster and smoother drilling and protecting surrounding clays and mobile shales improved
the well bore through mobile shale zones, thus significantly from Saffron-1, owing to the use of Borr Drilling has five rigs working for joint ven-
representing a major advance in Challenger’s synthetic-based muds, thus providing a robust tures which are jointly owned with our Mexican
technical understanding as compared to the technical validation for the use of these muds, partner providing integrated well services for
water-based mud used for the Saffron-1 well.” and a solid foundation for drilling design in any Pemex. The services commenced in May 2019
Saffron-2 Appraisal Well Update: The Saf- future field development. and have provided Pemex with an incremental
fron-2 well is currently being drilled in the In aggregate, the Saffron-2 well is currently production of approximately 125,000 barrels per
South-West Peninsula of Trinidad, as a twin well running approximately 6 days over time, owing day (bpd) of oil from 21 wells drilled so far. In
to the Saffron-1 well (i.e., drilled from the same to difficult work conditions occasioned by heavy our most recent meeting with Pemex manage-
well pad). Challenger Energy has a 100% oper- rains and some limitations on personnel and ment we have received a very favourable review
ating interest in the well and the broader Saffron equipment movements due to the prevailing of the performance and the cost efficiency of this
project. The target total depth of the Saffron-2 COVID-19 restrictions. However, incremen- operation. The integrated well services joint ven-
well is 4,557 feet (1,389 metres), with the well tal costs from time delays are being made up tures have received a request for extension of this
design comprising three sections: through operational savings and efficiencies, programme, which in turn is expected to employ
The top section, to intersect and assess sands and offset to some extent from a higher than the five Borr Drilling rigs until the end of 2022.

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