Columbus, the oil and gas producer and explorer focused on onshore Trinidad and Suriname, is pleased to announce that the Saffron well has discovered oil in the Lower Cruse and Middle Cruse, located in the South West Peninsula, onshore Trinidad.
The key highlights of the Saffron well are:
- Oil discoveries in the Lower Cruse and Middle Cruse
- 2363 ft of Gross sands with six reservoir intervals of interest with a 47% Net/Gross ratio
- Well reached Total Depth ("TD") at 4,634 feet, as planned
- 6 intervals identified for testing, with 3 intervals tested to date
- In the Lower Cruse, high quality, light oil (circa 40° API) recovered to surface
- Results in line with the Company's pre-drill estimates for recovery of oil from a Lower Cruse development (11.5mmbbl)
- Signed terms for a full carry of the second Saffron Lower Cruse appraisal and development well (expected Q3 2020)
- In the Middle Cruse, discovery of a medium quality crude (17° to 20° API)
- Currently producing oil from first perforated interval in the Middle Cruse
- Middle Cruse oil processed on location and first 340 bbls oil sold through existing infrastructure
- Preparing to test the Middle Cruse in additional oil bearing zones
- Preparing individual development plans for the Middle and Lower Cruse discoveries
Leo Koot, Executive Chairman of Columbus, commented:
"We have found what we were looking for - the Saffron well has discovered oil in both the Lower Cruse and Middle Cruse formations in the South West Peninsula, onshore Trinidad. These discoveries are transformational for Columbus creating two valuable standalone field developments.
Our main pre-drill goal of establishing the existence of hydrocarbons in the Lower Cruse has been achieved, significantly de-risking what we expect will be an imminent Saffron field development. We achieved light, high quality oil flow to surface (circa 40° API) from two test intervals in the Lower Cruse. For operational reasons (including prudent cost management), our testing was deliberately limited to a combined perforation of 16' even though the logging of the Lower Cruse showed over 300 feet of high-quality sands. As such, we believe that the appraisal of the Lower Cruse, expected in Q3 2020, will be stage 1 of a Lower Cruse development that we now calculate has an NPV of circa US$90m.
I am particularly pleased to share with our investors and the market that, in order to fast track the appraisal/development of the Lower Cruse, we have signed a Term Sheet with a third party drilling contractor to drill a second well in the Lower Cruse, the same contractor who drilled the Saffron well. It is expected that the well will be drilled in Q3 2020, subject to a stabilised oil price (above US$35 for a sustained period) and operating environment. The well will be fully funded by that third party in return for a share of the production from Saffron 2.
Whilst drilling the Saffron well, the Company encountered a total of 6 intervals in the Lower Cruse, Middle Cruse and Upper Cruse that merited testing and, to date, we have tested 3 intervals (2 in the Lower Cruse and 1 in the Middle Cruse).
In the Middle Cruse, we discovered medium quality crude (17° to 20° API) with a high water cut (circa 90%-95%). The Middle Cruse reservoir shows good pressure support, with the right completion design and field development plan, we can deliver a reliable oil and revenue stream from the multiple oil-bearing intervals we have identified. We have already sold our first oil produced from the Middle Cruse to Heritage (340 bbls).
I am therefore confident that we will be able to produce commercial quantities of quality oil from both the Lower Cruse and the Middle Cruse.
In the coming months, we intend to finish our testing campaign and work with our partner to drill Saffron 2. Alongside this, we will continue to produce from the Middle Cruse and progress a Middle Cruse appraisal and development campaign when the timing is right given market conditions.
I am really excited with our results to date with the Saffron well and I would encourage you to read the corporate and operational update and watch the accompanying video that are available on our website. "
Qualified Person's statement:
The information contained in this document has been reviewed and approved by Stewart Ahmed, Chief Technical Officer (Trinidad), for Columbus Energy Resources plc. Mr Ahmed has a BSc in Mining and Petroleum Engineering and is a member of the Society of Petroleum Engineers. Mr Ahmed has over 33 years of relevant experience in the oil industry.