Shares of Challenger Energy Group PLC (LON: CEG) were largely unmoved despite releasing a positive operations update for the five-month period to 30 December 2021.
The oil company noted that it gross production from its five well in Trinidad was 64,088 barrels, resulting in gross revenues of $2.3 million.
Challenger Energy maintained its production output during the next five-month period from January 2021 to May 2021. It produced 64,319 barrels of oil equivalent, generating $3.3 million in revenues driven by higher crude oil prices.
The company said it was on track to complete the drilling and logging process at its Saffron-2 well in Trinidad later this week, with the first production test was scheduled for mid-July.
Investors did not react to the news that the Saffron-2 well could start producing oil later this year, generating an additional revenue stream for the company.
Challenger Energy reported that it had completed all the major workstreams to start drilling at its Weg Naar Zee project in Suriname. Still, due to COVID-19 related restrictions, the drilling process would begin in late August to early September.
The company revealed that it had $10.7 million in cash and cash equivalents as of May 31 and had cut its recurring expenses by 15%, with a long-term goal of reducing its recurring costs by 20 – 30%.
Eytan Uliel, Challenger Energy's CEO, commented: “In April, we laid out a plan to ‘reset' this Company, focussed around the core strategic objective of growing production and cash flow. I can report that we are making solid progress against this goal.”
Adding:
“Operationally, we will shortly complete and production test the Saffron-2 well in Trinidad, we are looking toward commencing drilling in Suriname as soon as circumstances allow, and we are maintaining production from existing fields.”
The company is yet to finalise several drilling and contractor services contracts and is looking for additional funding to continue developing its projects and working capital.
Challenger Energy share price.
Challenger Energy shares kept trading sideways despite today’s positive trading update.