Saffron-2 - Update on Secondary Reservoir Target

18 June 2021

Challenger Energy Group PLC

("Challenger Energy" or the "Company")

Saffron-2 - Update on Secondary Reservoir Target

Challenger Energy (AIM: CEG), the Caribbean and Atlantic margin focused oil and gas company, with production, appraisal, development and exploration assets across the region, is pleased to provide an update on the progress of the Saffron-2 appraisal well, targeting the Upper, Middle and Lower Cruse reservoirs with an expectation (based upon the Saffron-1 discovery well) of production rates in the range of 200 - 300 bopd.

Highlights

·    Initial third-party petrophysical analysis of logs from the secondary reservoir targets of the Upper and Middle Cruse sections of the well indicate approximately 165ft of net-oil bearing reservoir sands

·    Drilling continues towards the primary Lower Cruse reservoir targets, with the well currently drilling at approximately 3,850ft against a target depth of 4,557ft

·    The well remains on-track for completion around 23 June 2021, with production testing thereafter scheduled for mid-July

Eytan Uliel, Chief Executive Officer, commented:

"Initial petrophysical analysis of the top two sections of the Saffron-2 well indicates 165ft of net oil-bearing reservoir sands. Whilst these sections are not the primary targets of the well, it is encouraging that the well has already demonstrated production potential. Drilling continues towards the primary Lower Cruse reservoir targets, where the ultimate producibility of the well will be determined. I look forward to advising further on completion of drilling."

Saffron-2 Appraisal Well Update

The Saffron-2 well (100% interest) is a twin well to the Saffron-1 discovery well (i.e., drilled from the same well pad) with a target depth 4,557ft. The currently drilled sections of the well, to 3,870ft, assessed sands of the Upper Cruse and upper parts of the Middle Cruse (both the source of consistent oil production from Saffron-1), as well as assessing deeper Middle Cruse sands (hydrocarbons intersected, but not logged or produced from Saffron-1).

Initial third-party petrophysical analysis of both these sections of the well from mudlog and the electric wireline logs show a total of 145ft net oil-bearing reservoir in the 17 1/2" hole section from the Upper Cruse down to the Upper Middle Cruse, with an additional 20ft net oil-bearing reservoir in the 12 1/4" hole section from the remaining section of the Upper Middle Cruse into the Lower Middle Cruse. Work has commenced on understanding production potential from these secondary targets.

Looking Forward

The final section of the Saffron-2 well (at 8 1/2") is currently being drilled out, to a final target depth of 4,557ft, including the primary reservoir targets of interest in the Lower Cruse, following which the Company expects to provide a further update. These units will be logged and sampled via MDT (assuming success), and thereafter it is intended the well will be lined and readied for production testing. It is expected that the process of preparing for production testing (including perforation) will take 2-3 weeks, such that initial production could occur in around mid-July.

The budgeted total cost for the Saffron-2 well is $3 million, with an anticipated drill time in the range of 25-30 days.

Regulatory Statements

In accordance with the AIM Note for Mining and Oil & Gas Companies, BPC discloses that Mr Nathan Rayner, the Company's Chief Operating Officer, is the qualified person who has reviewed the technical information contained in this announcement. He is a qualified Petroleum Engineer, a member of the Society of Petroleum Engineers, and a member of the Institution of Engineers, Australia. He has over 20 years' experience in the oil and gas industry. Nathan Rayner consents to the inclusion of the information in the form and context in which it appears.

For further information, please contact:

Notes to Editors

Challenger Energy is a Caribbean and Atlantic margin focused oil and gas company, with a range of exploration, appraisal, development and production assets and licences, located onshore in Trinidad and Tobago, and Suriname, and offshore in the waters of The Bahamas and Uruguay. In Trinidad and Tobago, Challenger Energy has five (5) producing fields, two (2) appraisal / development projects and a prospective exploration portfolio in the South West Peninsula. In Suriname, Challenger Energy has on onshore appraisal / development project. Challenger Energy's exploration licence in each of Uruguay and The Bahamas are highly prospective, and offer high-impact value exposure within the overall portfolio value.

Challenger Energy is quoted on the AIM market of the London Stock Exchange. 

https://www.cegplc.com 

ENDS