Challenger Energy (CEG) Shares Edge Lower Despite Positive Saffron-2 Well Update

Shares of Challenger Energy Group PLC (LON: CEG) edged 3.95% lower despite releasing a positive update about the drill programme at the Saffron-2 well.

The oil exploration and mining companies said that it had perforated approximately 130 feet of potential reservoir sands in the Lower Cruse section of the well in preparation for production testing shortly.

Challenger Energy is currently cleaning up the well by removing the equipment and materials used during the drilling campaign, which is expected to take a few days.

The oil company will then begin collecting data to ascertain pressures, oil and fluid types, and production rates from the Lower Cruse zone, given that the reservoir has not been previously tested.

Eytan Uliel, Challenger Energy’s CEO, commented: “The objective of the Saffron-2 well is to understand the production potential from the various reservoir units identified by both the Saffron-1 and Saffron-2 wells, starting with the Lower Cruse intervals. I am pleased to advise the first stage of production testing at the Saffron-2 well has commenced, with wellbore clean-up operations underway.”

The company will issue another update once it has established Saffron-2’s production potential.

Challenger Energy shares have fallen 50% from their May high of 3.40p after unveiling a new corporate identity to their current price around the 1.825p level.

Investors appear unimpressed by the various milestones achieved by the oil company since the corporate rebrand. For example, investors barely reacted to the oil company’s latest earnings update issued in late June as its shares kept falling.

*This is not investment advice.

Challenger Energy share price.

Challenger Energy shares edged 3.95% lower to trade at 1.82p, falling from yesterday’s closing price of 1.90p.