Challenger Energy Group Plc says first sections of Saffron-2 well are in-line with expectations
“Thus far, everything is as we would have hoped it would be, both geologically and operationally,” said Eytan Uliel.
The well has so far been completed to a depth of 1,593 feet, on time and on budget, and has encountered the Upper Cruse and upper parts of the Middle Cruse formations.
Logs for the sections are ‘as prognosed’ and consistent with comparable logs from Saffron-1, the company noted.
Drilling will now progress deeper to evaluate the deeper Middle Cruse, and then the Lower Cruse.
“Saffron-2 is proceeding as planned, with the first section of the well successfully completed and logged, on time and on budget,“ said chief executive Eytan Uliel.
“Thus far, everything is as we would have hoped it would be, both geologically and operationally.
“This creates a good foundation for the next two stages of the well, which will evaluate the primary targets of interest.”
Saffron-2 is an appraisal well that aims to unlock a phase of production growth for the company.
The well is predicted to flow at rates of 200 to 300 barrels of oil per day (bopd), which by the company’s projections would equate to more than US$1.8mln of cashflow per year. The company expects the well will achieve payback in 12 to 18 months and deliver a better than 200% return on investment.
A further five to nine further production wells are then planned to follow in Trinidad this year as part of a phase of field development which could comprise a total of 30 wells.
The company aims to establish some 1,000 to 1,500 bopd of new production from the 2021 wells, to generate US$8mln to US$12mln of annual cashflow (based on a US$60 per barrel crude price).
Beyond that, a fuller development programme could see production peak at around 4,000 bopd, to generate around US$25mln of cashflow per year.
Read More: Challenger Energy Group Plc says first sections of Saffron-2 well are in-line with expectations