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Challenger Energy issues

update on Saffron project

Challenger Energy, the Caribbean and Atlan-
tic margin focused oil and gas company, with
production, appraisal, development and explo-
ration assets across the region, has provided an
update in relation to the logging of the Saffron-2
appraisal well as part of the broader Saffron pro-
ject in the South-West Peninsula of Trinidad,
and the entry into an associated term sheet for a
potential Convertible Loan Note funding of up
to $17.5mn, to fund the future development of
the Saffron project.
Eytan Uliel, CEO, commented: “I am pleased
to advise that logging of Saffron-2, the first well
drilled by Challenger Energy onshore Trinidad,
has been completed, with oil-bearing sands
identified in all reservoir sections of interest, metres) of net oil-bearing reservoir sands (net Thereafter, the current anticipated full-field
consistent with pre-drill estimates and those pay), as follows: Upper Cruse – 131 feet (39.93 development for the Saffron project could ulti-
indicated from the Saffron-1 discovery well. metres) of reservoir sand and 27 feet (8.23 mately comprise up to 30 wells in total, with a
We now head toward production testing later metres) of net pay (20% NTG); Middle Cruse – projected peak production of approximately
this month, and once Saffron-2 is online and a 1,066 feet (324.9 metres) of reservoir sand and 4,000 bpd, potential generating annualised net
degree of production history is established, we 217 feet (66.14 metres) of net pay (20% NTG); operating cashflows of up to $25mn. Following
can then work with the authorities in Trinidad to Lower Cruse – 223 feet (67.97 metres) of reser- a successful first phase of development of the
plan how best to execute a broader development voir sand and minimum 63 feet (19.2 metres) net Saffron project, the Company expects that it will
of the Saffron field. pay (28% NTG), with a potential further 70 feet be able to fund the balance of the overall field
“In terms of funding, known production (21.3 metres) net pay (60% NTG) indicated. development from ongoing cash flow generated
capacity translates to de-risked cash flow Following logging the drill rig was released from Saffron field production.
potential that can sustain less dilutive sources off hire and is demobilising from site. All other Challenger Energy, July 14 2021
of capital. In this regard, we are pleased to have service providers have departed and all SOBM
taken the first tangible steps, by entering into a (synthetic oil-based mud) has been safely President Energy provides
term sheet with a leading provider of debt and removed from site and returned to the vendor.
hybrid-debt capital to energy companies. We Operations are now focused on the installa- operational update
are working to conclude a funding on mutually tion of equipment to ready the well for produc-
acceptable terms, with a view to having capital tion testing. The Challenger #1 workover rig is AIM-listed President Energy, the energy com-
available once we have production data from mobilising to site in order to run perforating pany with a diverse portfolio of hydrocarbon
the Saffron-2 well and have been able to assess guns to penetrate each of the potential oil-bear- production and exploration assets focused pri-
development options and schedule for a broader ing horizons and install the completion string. marily in South America as well as Atome, a new
Saffron development. I look forward to updating Requisite surface equipment (pipes, valves, green hydrogen and ammonia company, has
shareholders of our progress.” tanks) has been purchased and is simultaneously provided an operational update in relation to its
The Saffron-2 well has been successfully mobilising to site to be ready for hook-up as soon oil and gas activities in Argentina and Paraguay.
drilled to a depth of 4,567 feet (1,392 metres) as the completion operations have concluded. Highlights: New oil treatment plant at the
and logged with a full formation evaluation Production testing is expected to commence Puesto Flores field, Rio Negro, Argentina is par-
suite. All well sections have now been cased and on or around July 23, 2021. tially in service with full operational capacity
cemented ready for a production completion to Development of Saffron: Subject to successful expected by the end of July, slightly later than
be installed, subsequent production testing, and production testing of Saffron-2, and subject to originally forecast due to COVID-related delays.
longer-term future production. approval of a requisite development plan by the At Puesto Guardian, Salta Province, Argen-
The well, in the South-West Peninsula of authorities in Trinidad, the Company will seek to tina, the first of the three new firm oil wells is
Trinidad is a twin of the Saffron-1 well, and develop the Saffron field in a phased approach. currently expected to be spudded on time in the
encountered similar Upper, Middle and Lower The initial phase will involve drilling between first half of October with the second and third
Cruse reservoirs to Saffron-1. The expectation five to nine production wells at an estimated wells to be drilled back to back through Q4-2021.
(based upon the Saffron-1 discovery well) is of capital cost of $12-20mn, the pace of which will Ordering of long lead items and contracting
production rates in the range of 200-300 bpd. largely depend on permitting and rig availabil- of rig for Salta in advanced progress in readiness
Challenger Energy has a 100% operating inter- ity. This initial program of activity is projected for the spud date of the first well. Reprocessing
est in the well and the broader Saffron project. to achieve an average daily production of 1,000- of 202 square km 3-D seismic at the Pozo Escon-
Initial results of the log interpretation have 1,500 bpd which, based on a $60 per barrel oil dido field, Puesto Guardian Concession, Salta to
identified over 1,400 feet (427 metres) of gross price, could generate annualised net operating take place in Q3-2021 with a view to generating
reservoir sands, with in excess of 300 feet (91 cashflows of up to $12mn going forward. new drilling opportunities for Q1-2022.

P14 www. NEWSBASE .com Week 28 15•July•2021