Challenger Energy Group PLC (LON:CEG) has kicked off the drilling of the Saffron-2 appraisal well in Trinidad and Tobago.
The well is a follow-up to a successful exploration well drilled in March 2020. It is described by the company as a low-cost onshore well, costing an estimated US$3mln.
Drilling got underway on-schedule and it potentially sets up a phase of production growth and cash flow. The programme is expected to take 25 to 30 days to complete.
“This is an exciting start for Challenger Energy Group, as we take the first step in our longer-term strategy of developing our existing portfolio to increase the Company's production and cash flow,” said Eytan Uliel, Challenger chief executive.
If Saffron-2 is successful, the well could produce between 200 to 300 bopd, resulting in US$1.8mln to US$2.6mln of net cash flow per year. Beyond that, the success case sees the Saffron field capable of producing 1,000 to 1,500 bopd by the end of 2021.
A full field development could see peak production rates of up to 4,000 bopd and yield more than US$25mln of cash flow.