Saffron-2 Project Update

5 July 2021

Challenger Energy Group PLC

("Challenger Energy" or the "Company")

Saffron-2 Project Update

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 the following update on progress of the Saffron-2 appraisal well as part of the Saffron Project.

Highlights

·    The drilling phase of the Saffron-2 well has successfully concluded, with the well fully cased and cemented to a depth of 4,567ft. The well is now being readied for production testing which is expected to commence in the next three weeks

·    Data recorded in final sections of the well suggests similar sand intervals to hydrocarbon bearing zones encountered in Saffron-1, with a full suite of logging to be conducted over the coming week across each of the lower Middle Cruse and Lower Cruse reservoir sections of interest

Eytan Uliel, Chief Executive Officer, commented:

"I am pleased to advise that the drilling phase of Saffron-2 has been successfully completed at a depth of 4,567ft, and the well has been fully cased and cemented. We thus have a well to planned target depth intersecting all Upper, Middle and Lower Cruse reservoir units of interest, safely behind pipe and capable of being progressed to production. That is the core objective from the Saffron-2 well: to gain an understanding of production potential, which in turn will guide how we plan, execute and fund a broader development of the Saffron field. Logging will now be conducted to define the specific sands and oil zones in the recently drilled sections of the well, and we will provide a further update once this is completed. In parallel, the well is being readied for production, which we expect will commence around 23^rd July."

Saffron-2 Appraisal Well Drilling Update

The drilling phase of the Saffron-2 well has been successful to a depth of 4,567ft.

The well, in the South-West Peninsula of Trinidad is a twin of the Saffron-1 well, and has encountered similar Upper, Middle and Lower Cruse reservoirs to Saffron-1, with an expectation (based upon the Saffron-1 discovery well) of production rates in the range of 200 - 300 bopd. Challenger Energy has a 100% operating interest in the well and the broader Saffron project.

As previously advised (on 24 June 2021) the well had reached a total depth of 4,118ft, with the drilled horizons to that depth secured behind casing for production testing. Since then, drilling continued to a final depth of 4,567ft, just slightly beyond the pre-drill target depth of 4,557ft, and the well has now been fully cased and cemented.

Initial interpretation of the hole section below 3,955ft suggests similar hydrocarbon bearing sand intervals in the lower Middle Cruse and Lower Cruse units to those encountered in Saffron-1, based upon the correlation of gas peaks from Saffron -2 to those sand intervals already identified in Saffron-1. A suite of logs will now be run over each of these deeper reservoir sections of interest, anticipated to take approximately 5-7 days - a further announcement will be made at that time. These deeper reservoir sections and associated production potential is in addition to the >200ft of pay previously identified in Upper Cruse and upper Middle Cruse units.

The well is being readied for production testing, which is expected to commence on or around 23^rd July.

Further updates will be provided as appropriate.

Regulatory Statements

In accordance with the AIM Note for Mining and Oil & Gas Companies, Challenger Energy Group 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.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014, which forms part of United Kingdom domestic law by virtue of the European (Withdrawal) Act 2018.

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