[Challenger Energy's Trinidad operations. Source: Challenger Energy]
Oil and gas producer Challenger Energy (CEG ) delivered this morning unaudited results for the 6 months ended 30 June 2022.
Challenger reported pretax profits of US$4.279m in 1H22, a substantial increase from a pretax loss of US$11.83m a year ago. The company raised c. US$10m during the period via the issue of new shares, to fund payments to creditors as part of an agreed discounted payment plan, as well as to fund its work programme for 2022. The profit comes as a result of settlements made during the reporting period.
Still, Challenger also recorded a gross profit of US$158K, compared to a gross loss of US$883K a year ago, due to higher net petroleum revenues and lower cost of sales at US$2.52m compared to US$3.19m a year ago. The company had net cash and equivalents of US$5.3m on 30 June 2022.
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In 2Q, Challenger's Trinidad operations generated a pre-tax operating cash surplus of c. US$0.4m, a 100% increase QoQ. The production increase was a result of Challenger's focused effort to manage its Trinidad portfolio more efficiently. The company has made significant investments into enhancing near-term production across the Trinidad portfolio, also known as its 2022 work programme.
Such investments include recompletions of 10-15 existing wells, reactivation of 10-12 wells, a continuous in-house swabbing program, and a single pattern water injection enhanced oil recovery (EOR) programme at the Goudron field, planned to commence in November 2022.
The impact of these investments is not yet reflected in quarterly or interim numbers, hence significant potential for upside exists. Overall, the 2022 work programme aims to achieve 550-600 bopd by the end of the year, and Challenger has the funding to reach that goal.
Further down the line, Challenger is eyeing up to nine potential new well opportunities across its Trinidad asset portfolio, offering the possibility of significant production uplifts, consistent with the company’s longer-term production goal of 1,000 bopd.
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