Challenger Energy Group PLC (AIM:CEG) told investors that commercial production rates have been established at the Saffron-2 well, though rates will be maximised by additional clean-up and optimisation work that is presently underway.
The Trinidad-focused company, in a statement, said additionally that the Upper Cruse reservoir units in the well will now also be perforated for production.
In the meantime, Saffron-2 is presently producing around 81 barrels of oil per day.
"The Saffron-2 appraisal well was successfully drilled and completed in early July 2021 - Challenger Energy's first operated drilling onshore Trinidad,” said chief executive Eytan Uliel. “Pleasingly, testing in the Middle Cruse has resulted in an economic level of production thus far being achieved, and we are working to increase production further.
“We are already selling the oil being produced, so for the immediate future the plan is to maximise production revenues from those Middle Cruse units, as well as bringing on additional production from the as yet unperforated Upper Cruse units, in due course.”
Uliel noted that production testing has showed that the Lower Cruse reservoir can flow high-quality hydrocarbons, but, due to technical and mechanical issues production could not be sustained from that zone.
He meanwhile highlighted that the company’s focus is shifting to analysis of well data and learning from the well’s findings, to define “the best way forward” for the whole project – and building production and cashflow is the strategic imperative.
“The key point is we have shown that there are moveable hydrocarbons in the Lower Cruse, and we believe that issues encountered can be addressed, such that the Lower Cruse can ultimately contribute meaningfully to production.
“We have preserved the ability to re-enter and produce the lower zones of Saffron-2 in the future, and we are incorporating the knowledge gained into the design of future Saffron wells.”