Columbus Energy Resources PLC (LON:CERP) has confirmed new discoveries as it announced results from the hotly anticipated Saffron well located in the South West Peninsula, onshore Trinidad.
Drilling began in October and testing took place in February. Saffron was drilled down to 4,634 feet and it encountered some 2,363 feet of gross sands across six intervals of interest (with net-to-gross stated at 47%).
Oil discoveries have been confirmed in the Lower Cruse and Middle Cruse formations, Columbus said in a statement. Six intervals have been earmarked for testing, and, three have been done to date - two in the Lowe Cruse and one in the Middle Cruse.
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"We have found what we were looking for - the Saffron well has discovered oil in both the Lower Cruse and Middle Cruse formations in the South West Peninsula, onshore Trinidad,” Columbus executive chair Leo Koot said in a statement.
The group described a “high quality, light oil” in the Lower Cruse, with an API of around 40 degrees, in line with expectations that included an estimate for some 11.5mln barrels of resources.
The Middle Cruse interval is described as “medium quality crude”, 17 to 20 degree API, and this interval has now been perforated and is producing. It is being processed on location and so far the first 340 barrels of oil have been sold via existing infrastructure. Columbus noted that it is preparing to test the Middle Cruse in additional oil-bearing zones.
Koot said: “These discoveries are transformational for Columbus creating two valuable standalone field developments Our main pre-drill goal of establishing the existence of hydrocarbons in the Lower Cruse has been achieved, significantly de-risking what we expect will be an imminent Saffron field development."
“We achieved light, high quality oil flow to surface (circa 40° API) from two test intervals in the Lower Cruse. For operational reasons (including prudent cost management), our testing was deliberately limited to a combined perforation of 16' even though the logging of the Lower Cruse showed over 300 feet of high-quality sands,” he added.
Individual development plans are being drawn up for the Middle and Lower discoveries. The Middle Cruse can deliver reliable commercial production and revenue from the multiple intervals, Koot noted.
Meanwhile, Columbus has signed terms for a full carry of the second Saffron Lower Cruse appraisal and development well which is slated for the third quarter of 2020.
According to Koot, the company believes the appraisal of the Lower Cruse will be the first stage of development with a net present value of around US$90mln.
“in order to fast track the appraisal/development of the Lower Cruse, we have signed a Term Sheet with a third party drilling contractor to drill a second well in the Lower Cruse, the same contractor who drilled the Saffron well.
“It is expected that the well will be drilled in Q3 2020, subject to a stabilised oil price (above US$35 for a sustained period) and operating environment. The well will be fully funded by that third party in return for a share of the production from Saffron 2,” Koot said.
He added: “I am really excited with our results to date with the Saffron well.”