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Shares of Challenger Energy Group PLC (LON: CEG) edged 3.82% higher after releasing a positive update regarding the drilling operations at its Saffron-2 well in Trinidad and Tobago.
According to the oil exploration and mining company, petrophysical analysis of the log data collected from the drilling operations indicated oil-bearing sands with a depth of up to 165 feet.
Challenger Energy also confirmed that it intends to complete the drilling process on June 23 upon reaching its target depth of 4,550 feet. The firm has so far drilled up to 3,850 feet.
The company noted that the discovered oil reserves were not the primary target, which is a good sign for the primary targets, which are much lower.
According to prior estimates, the Saffron-2 well was expected to produce between 200 to 300 barrels of oil per day generating $1.8 million to $2.6 million annually.
The entire Saffron field was expected to produce between 1,000 and 1,500 barrels of oil per day by the end of 2021.
Investors cheered the announcement, which could translate into much higher production figures at Saffron once the drilling phase is completed and final resource estimates are generated from the log data.
Eytan Uliel, Challenger Energy’s CEO, said: “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.”
Challenger Energy share price.
Challenger Energy shares edged 3.82% higher to trade at 2.855p, rising from yesterday’s closing price of 2.750p.
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