The current share price and thus market capital of Challenger Energy (AIM:CEG) is currently fully underpinned by the existing currently producing assets and reserve base.
Challenger Energy has a full programme of activity throughout2021 and into 2022 that has the potential to significantly increase that production base and therefore materially add value in the immediate short term.
In a success case, total potential capex requirement through balance of 2021 is in the range of $20m – $25m, with cash flows generated from early wells reinvested into / funding drilling of subsequent wells.
|Current Trinidad Production||450-500 bopd||$3m+||-|
|Incremental production programs||100 bopd||$1.8m - $3.6m||~$1m
|Infill drilling programs||200-400 bopd||$1.8m - $3.6m||Up to $6m|
|* Saffron-2 (May/June 2021)||200-300 bopd||$1.8m - $2.6m||$3m|
|* Saffron phase 1 development (H2, 2021)||1,000+ bopd||$8m - $12m||$15m - $20m|
|* Saffron full-field development (2022 onwards, 2-3 years)||4,000+ bopd||$25m+||Up to $60m|
|* WNZ initial phase (H2, 2021)||100 bopd||$1m||~$2.7m|
|*WNZ full-field development (2022 onwards)||900+ bopd||$2.5m+||Up to $15m|
In summary, the current equity value is captured in the current share price – everything else is upside and risk is diversified through the portfolio to offer multiple routes to accessing value upside.
1.15Share Price Performance