Challenger Energy Group PLC (LON:CEG) said it is making “solid progress” towards its objective of growing production and cash flow.
Production and drilling operations have been maintained despite almost continuous Coronavirus (COVID-19) related restrictions on the movement and availability of staff and contractors, while respecting safety regulations.
READ: Challenger Energy reports 200 feet of net pay at Saffron-2 well
For the five months to 31 December 2020 aggregate gross production from the oil company's five producing assets in Trinidad was 64,088 barrels, generating gross revenues of US$2.3mln.
For the period Jan 2021 to May 2021, aggregate gross production from the same assets was 64,319 barrels, generating gross revenues of US$3.3mln.
The AIM-listed firm said it expects to complete drilling and logging of the Saffron-2 well in Trinidad this week, and to commence a production test of the well in mid-July 2021.
It added it has progressed all major workstreams necessary to commence drilling an initial well at the Weg Naar Zee project in Suriname.
Due to ongoing adverse COVID-19 circumstances in Suriname, drilling is estimated to start in late August or early September.
Challenger noted that it has achieved STOW (Safe To Work) accreditation in its main centre of operation in Trinidad, and remains on track to produce its first comprehensive ESG strategy during 2021.
As of 31 May, it had cash and cash equivalent holdings of US$10.7mln, while cost-saving initiatives have saved 15% of recurring overhead, with a target of 20-30% in the coming months.
A number of drilling and services contractor creditor discussions remain to be finalised and for payments to be agreed and scheduled, the firm said, adding it is working on securing various additional sources of funding, in particular debt and hybrid-debt facilities and evaluating various growth and transactional opportunities.
Because of the extended current lockdown in Trinidad and Tobago, the annual accounts for the year to 31 December 2020 will be published by 30 September as the original 30 June deadline could not be met.
“Operationally, we will shortly complete and production test the Saffron-2 well in Trinidad, we are looking toward commencing drilling in Suriname as soon as circumstances allow, and we are maintaining production from existing fields,” said chief executive Eytan Uliel.
“Corporately, we are tightly managing our finances, implementing cost reduction initiatives, and looking to define the future shape of the Company - including taking tangible steps towards introducing less dilutive debt funding sources into our overall funding mix. Much remains to be done, and the next six months will be a busy time for Challenger Energy.”