REG - Challenger Energy - AREA OFF-1 Farm-Out Completion

Challenger EnergyAnnouncement

29/10/2024 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241029:nRSc9385Ja&default-theme=true

RNS Number : 9385J  Challenger Energy Group PLC  29 October 2024

29 October 2024

Challenger Energy Group PLC

("Challenger Energy" or the "Company")

 

AREA OFF-1 Farm-Out Completion

 

Challenger Energy (AIM: CEG), the Atlantic margin focused energy company, is
pleased to announce that the farmout of a 60% interest in the AREA OFF-1
block, offshore Uruguay, to Chevron Mexico Finance LLC, Sucursal Uruguay
("Chevron") (a wholly-owned subsidiary of Chevron Corporation (NYSE: CVX)),
has today been completed, with all required approvals from the Uruguayan
regulatory authorities having been received, and the farmout taking legal
effect.

As an immediate result, the Company has received a cash payment of US$12.5
million while retaining a 40% non-operating interest in AREA OFF-1. Chevron
has assumed operatorship of the block and going forward will carry 100% of the
Company's share of the costs associated with a 3D seismic campaign on AREA
OFF-1 (up to a maximum of US$15 million net to Challenger Energy). Thereafter,
should Chevron decide to drill an initial exploration well on the AREA-OFF 1
block, Chevron will also carry 50% of the Company's share of costs associated
with that well (up to a maximum of US$20 million net to Challenger Energy).

The Company is working closely with ANCAP, the Uruguayan regulator, and
Chevron to ensure a smooth transition of operatorship, as well as
participating in the detailed planning for an upcoming 3D seismic campaign,
targeted to commence in the next available shoot window (H1 2025). Further
updates will be provided as planning and execution of the seismic campaign
progresses.

 

Eytan Uliel, Chief Executive Officer of Challenger said:

"Completion of the AREA OFF-1 farmout is a game-changer for Challenger Energy.
We've achieved an outcome that introduces Chevron, a recognised industry
leader, as operator of the block, who will now commence with executing a
considerable value-creating work program. The cash received and farmout terms
will ensure that our Company is fully funded for the foreseeable future. And,
just as important, this farmout validates our capabilities in terms of
securing early-access to promising exploration blocks, and progressing them
rapidly via high-quality technical work. In the coming months we expect to
communicate plans for 3D seismic acquisition on AREA OFF-1, and at the same
time we will be fully engaged in a technical work program for our second
Uruguay licence, AREA OFF-3, applying the learnings from work on AREA OFF-1 -
our objective is to be in a position to kick off a farm-out process for that
block in mid-2025. The next year will thus be an exciting and busy time for
Challenger Energy."

 

For further information, please contact:

 

 Challenger Energy Group PLC                         Tel: +44 (0) 1624 647 882

 Eytan Uliel, Chief Executive Officer
 Zeus - Nomad and Joint Broker                       Tel: +44 (0) 20 3829 5000

 Simon Johnson / Antonio Bossi / Darshan Patel
 Stifel - Joint Broker                               Tel: +44 (0) 20 7710 7600

 Ashton Clanfield / Callum Stewart / Simon Mensley
 Gneiss Energy Limited - Financial Adviser           Tel: +44 (0) 20 3983 9263

 Jon Fitzpatrick / Paul Weidman / Doug Rycroft
 CAMARCO - Financial PR                                Tel: +44 (0) 20 3757 4980

 Billy Clegg / Georgia Edmonds / Tomisin Ibikunle
 Jonathan Paterson - Investor Relations                Tel: +1 475 477 9401

 jonathan.paterson@harbor-access.com

 

 

 

Notes to Editors

 

Challenger Energy is an Atlantic-margin focused energy company, with
production, development, appraisal, and exploration assets in the region.
Challenger Energy's primary assets are located in Uruguay, where the Company
holds two high impact offshore exploration licences, totalling 19,000km(2)
(gross) and is partnered with Chevron on the AREA-OFF 1 block. Challenger
Energy is quoted on the AIM market of the London Stock Exchange.

 

https://www.cegplc.com (https://www.cegplc.com/)

 

 

ENDS

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDKZMZGNRGGDZM