Challenger's Trinidad production rises in second quarter

Caribbean and Atlantic-focussed oil and gas company Challenger Energy updated the market on the second quarter at its Trinidad and Tobago operations on Tuesday, reporting total gross oil production of 34,159 barrels for the period.

The AIM-traded firm said that equated to about 375 barrels per day, representing an increase of 6% over the first quarter.

It said the rise in average daily gross production was primarily the result of a “focussed effort” on maintaining baseline production.

It noted that its 2022 work programme, focussed on near-term production enhancement activities, was being executed in phases over the coming months, meaning the expected impact of that work on production was not yet reflected in the rates achieved during the second quarter.

Challenger also noted that, notwithstanding the increase in total oil production, the quarterly result was adversely impacted by “especially severe” torrential rains in the last two weeks of June, which caused several days of downtime due to electrical failures and safety-related total field shut downs.

Total oil sales in the period amounted to 31,170 barrels, representing a 5% improvement over the first quarter, with a gross realised average price per barrel sold of $97.45, up 17%.

Revenue received from oil sales, being gross revenues less government royalties and mandatory source deductions and adjustment, totalled $1.4m in the second quarter, representing average net revenue to the company of $45.15 per barrel sold, up 15% quarter-on-quarter.

In total, the firm said its operations in Trinidad and Tobago generated an unaudited pre-tax operating cash surplus of $0.4m for the three months, doubling from $0.2m in the first quarter.

“Everyone in the Challenger Energy team continues to work on driving our production business in Trinidad and Tobago forward, and the results of the second quarter represent steady improvements across the board - as compared to the first quarter production was up, oil sales were up, and cash flows being generated in-country have increased,” said chief executive officer Eytan Uliel.

“It is also important to note that these results are due to a dedicated focus on managing the Trinidadian asset portfolio prudently and efficiently, and do not yet reflect any of the additional production we hope to realise from our planned 2022 work programme, which as advised in June will be rolled out across the second half of 2022.

“I therefore look forward to reporting further progress in the coming months, as we begin executing our planned work for the remainder of the year.”

At 1549 BST, shares in Challenger Energy Group were down 0.43% at 0.09p.

Reporting by Josh White at Sharecast.com.