REG - Challenger Energy - Operational & Corporate Update

Challenger EnergyAnnouncement

09/09/2025 07:00

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RNS Number : 4613Y  Challenger Energy Group PLC  09 September 2025

The information communicated within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU) No.
596/2014 as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the
Company's obligations under Article 17 of MAR. Upon the publication of this
announcement, this inside information is now considered to be in the public
domain.

 

 

9 September 2025

Challenger Energy Group PLC

 

Operational & Corporate Update

 

Challenger Energy Group PLC (AIM:CEG, OTCQB:BSHPF) ("Challenger" or "the
Company"), the Atlantic margin focussed energy company, is pleased to provide
the following operational and corporate update.

A technical presentation for AREA OFF-3 is available on the Company's website.

Highlights

·    Uruguay, AREA OFF-3:

o The first phase of the Company's technical work programme has successfully
been completed, with multiple new seismic attribute supported anomalies
identified

o Material aggregate resource potential from two primary prospects, comprising
a best estimate (Pmean) of ~380 million barrels oil recoverable, and an upside
(P10) case of ~980 million barrels oil recoverable

o Shallow water and reservoir depths of these primary prospects underpin
relatively low development costs, and thus commerciality at even modest
discovery volumes

o Considerable additional exploration potential, including possible slope
turbidite and low stand fan play exposure in the north-east of the block

o The planned farmout process for AREA OFF-3 has commenced

·    Uruguay, AREA OFF-1:

o 3D seismic acquisition expected to commence in late 2025, pending final
environmental permitting

·    Corporate:

o Sale of the Company's Trinidad and Tobago business has been finalised,
resulting in a complete exit from all operations and exposures in that country

o The Company reports a strong cash position, with all planned operations
fully-funded into 2027

Eytan Uliel, CEO of Challenger Energy, said:

"There is strong momentum across our business as we continue to execute our
plan - advancing exploration activities in Uruguay, optimizing our portfolio,
and continuing to execute on our business strategy. We have completed the
first phase of technical work on AREA OFF-3 with encouraging results, and our
farm-in process for this block has now commenced. Meanwhile AREA OFF-1 remains
on track to see 3D seismic acquisition commence at the end of this year, we
completed our full exit from Trinidad and Tobago, and prudent cash management
means we have sufficient funds for everything we plan to do over the next 18
months. Overall, therefore, the upcoming period promises to be busy and
exciting for Challenger Energy - I look forward to updating shareholders as to
our continued progress".

Uruguay AREA OFF-3 - "farm-out process launched"

The first phase of the Company's technical work programme for the AREA OFF-3
block, offshore Uruguay, has now been completed.

That technical work programme consisted principally of reprocessing,
interpreting and mapping of 1,250km(2) of 3D seismic data, supplemented by a
number of other geophysical and geochemical work streams, similar to the
technical work processes undertaken on AREA OFF-1 prior to the farmout to
Chevron.

The work completed substantially discharges all minimum work obligations for
the first exploration period of AREA OFF-3 (completion of two geotechnical
desktop reports are the sole remaining work items for the first period minimum
work obligation, and can be completed at any time prior to the end of the
first exploration period in June 2028).

Highlights from the technical work thus far undertaken on AREA OFF-3 by the
Company are:

·      Multiple new seismic attribute supported prospects and leads were
identified from 2025 reprocessed 3D seismic data, and further corroborated by
degree of structural conformance, DHI (flat spot) and amplitude variation with
offset (AVO) analysis

·    The two primary prospects - Benteveo and Amalia - are material, and
comprise an aggregate best estimate (Pmean) of ~380 million barrels
recoverable and an upside (P10) case of ~980 million barrels recoverable

·    The Company's EUR (Expected Ultimate Recoverable) and STOOIP (Stock
Tank Original Oil in Place) assessments for these two prospects are summarised
as follows:

·      Shallow water depth (<350 metres) and reservoir depth (~2,300
metres) underpins relatively low development costs, and thus commerciality at
even modest discovery volumes (initial estimates are that 100 - 125 mmboe
recoverable would be commercial)

·      Technical work has also indicated considerable additional
exploration potential on AREA OFF-3, including:

o  an inventory of further identified leads that remain to be mapped and
interpreted in detail - exploration success with primary prospects would
likely derisk several of these leads, and

o  in addition to the 1,250km(2) of 3D seismic data already reprocessed,
mapped and interpreted by the Company, an additional 2,000 km(2) of
reprocessed 3D seismic data is available for licensing and further analysis,
covering the north-eastern segment of the block adjacent to the Brazilian
maritime border - regional 2D coverage indicates possible slope turbidite and
low stand fan play exposure in this north-eastern segment of the block (a
similar play system to that which has yielded many of the recent, major
discoveries on the Namibian margin of the South Atlantic basin).

With the first phase of its AREA OFF-3 technical work programme now complete,
the Company has launched a formal farm-out process for the AREA OFF-3 block.
The initial phase of this process will see multiple parties invited to
undertake technical and commercial evaluation of the opportunity. The Company
will be seeking initial offers by year-end, with a view to selecting a
suitable partner(s) during the first quarter of 2026.

Uruguay AREA OFF-1 - "3D seismic acquisition upcoming"

Public consultations have been held in Uruguay in relation to the award of the
requisite environmental permits for 3D seismic acquisition across multiple
Uruguayan offshore blocks to various seismic vendors. The award of permits is
anticipated in the coming months, facilitating (as previously communicated) 3D
seismic acquisition on AREA OFF-1 to commence in late Q4 2025.

Trinidad & Tobago - "full exit completed"

As advised on 1 September 2025, the sale of the Company's entire business,
assets and operations in Trinidad and Tobago has been completed. The sale took
the form of a complete exit, such that the Company has not further involvement
in, or exposure to, operations in that country. The Company has thus far
received approximately $750,000 in cash proceeds from the sale, with a further
$1 million due on an unconditional basis in instalments ($500,000 on 31 August
2026, $250,000 on 31 December 2026, and $250,000 on 31 December 2027).

Corporate - "strong cash position and fully-funded"

The Company's half-year report for the period to 30 June 2025 was published on
3 September 2025. As indicated in that report, the Company's cash position as
at 30 June 2025 was approximately $6.6 million, not including $0.7 million in
restricted cash holdings, and not including the $1.75 million in proceeds due
to the Company from the sale of its business in Trinidad and Tobago. As noted
in the half-year report, the Company's overhead "burn" rate and future capital
needs are such that the Company expects to be fully funded for all planned
activities for the balance of 2025, all of 2026, and well into 2027, without
the need for any additional capital.

---

Qualified Person Statement

 

Technical work in relation to the AREA OFF-3 block, offshore Uruguay, referred
to in this announcement has been undertaken by various independent third-party
specialist advisors to the Company. This technical work has been overseen by
Mr. Randolph Hiscock, the Company's Uruguay General Manager. In accordance
with the AIM Note for Mining and Oil & Gas Companies, the Company
discloses that Mr. Randolph Hiscock is the qualified person who has reviewed
the technical information contained in this presentation. He has a Masters in
Science (Geology) and is a member of the AAPG & PESGB, and has over 35
years' experience in the oil and gas industry, specializing in the Atlantic
offshore margins. Randolph Hiscock consents to the inclusion of the
information in the form and context in which it appears.

 

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

 James Joyce/James Bavister
 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
 CAMARCO - Financial PR                                Tel: +44 (0) 20 3757 4980

 Billy Clegg / Georgia Edmonds / Emily Hall
 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 a current
high-impact position in Uruguay, where the Company holds two 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 and the OTCQB in the United States.

 

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

 

Glossary

 

 Amplitude Versus Offset (AVO) Analysis     A seismic technique that examines how reflection amplitude changes with
                                            distance from the source.
 Direct Hydrocarbon Indicator (DHI)         Seismic features that suggest the presence of hydrocarbons.
 Expected Ultimate Recoverable (EUR)        The total volume of hydrocarbons expected to be recovered from a reservoir
                                            over its lifetime.
 Million Barrels of Oil Equivalent (mmboe)  A unit of energy equivalent to one million barrels of oil, used to
                                            standardize oil and gas volumes.
 P10                                        A high-case estimate; there's a 10% chance the actual volume will
                                            be greater than this.
 P50                                        The median estimate; there's a 50% chance the actual volume will
                                            be greater or less than this.
 P90                                        A low-case estimate; there's a 90% chance the actual volume will
                                            be greater than this.
 Pmean                                      The mean (average) estimate of hydrocarbon volumes, derived from a
                                            probabilistic distribution.
 Stock Tank Original Oil in Place (STOOIP)  The total volume of oil originally present in a reservoir, measured
                                            at surface conditions.

 

ENDS

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