REG - Challenger Energy - Trinidad Q2 2022 Update

Challenger EnergyAnnouncement

19/07/2022 07:00

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RNS Number : 8655S  Challenger Energy Group PLC  19 July 2022

 

19 July 2022

Challenger Energy Group PLC

("Challenger Energy" or the "Company")

 

Trinidad Q2 2022 Update

Challenger Energy (AIM: CEG), the Caribbean and Atlantic-margin focused oil
and gas company, with oil production, appraisal, development and exploration
assets across the region, provides the following update on its Trinidad and
Tobago business unit's operating results for Q2 2022:

·    Total gross oil production for Q2 2022 was 34,159 barrels equating to
approximately 375 barrels of oil per day (bopd), representing an approximately
6% increase over Q1 2022 (358 bopd).

The increase in average daily gross production is principally attributable to
a focused effort on maintaining baseline production. It is noted that the
Company's 2022 work program, which is focused on near-term production
enhancement activities (as announced in RNS dated 7 June 2022) is to be
executed in phases over the coming months, and thus the expected impact of
this work on production is not yet reflected in the production rates achieved
during Q2 2022.

It is further noted that notwithstanding the increase in total oil production,
the quarterly result was adversely impacted by especially severe torrential
rains in the last two weeks of June 2022, which caused several days of
downtime due to electrical failures and safety-related total field shut downs.

·    Total oil sales in Q2 2022 amounted to 31,170 barrels, representing
approximately a 5% increase over Q1 2022, with a gross realised average price
per barrel sold of US$97.45, representing approximately a 17% increase over Q1
2022.

 

As noted above, especially severe weather conditions were experienced in the
last two weeks of June 2022, and resulted in the Company being unable to
deliver approximately 800 barrels of oil for sale prior to the close of the
second quarter. However, this unsold inventory will be realised early during
Q3 2022.

 

·    Revenue received by the Company from oil sales (being gross revenues
less Government royalties and mandatory source deductions and adjustments
applicable under the relevant licences)(1), amounted to approximately US$1.4
million in Q2 2022. This represents average net revenue to the Company of
US$45.15 per barrel sold, an approximately 15% increase over Q1 2022.

 

·    In total, the Company's operations in Trinidad and Tobago generated
an (unaudited) pre-tax operating cash surplus in Q2 2022 of approximately
US$0.4 million (Q1 2022: US$0.2 million). This surplus is stated after field
operating costs, in-country G&A and other Trinidad expenses, but before
corporation and other taxes (including supplemental petroleum tax, where
applicable). It is noted however that, given the extent of carry-forward tax
losses in Trinidad and Tobago, the Company is currently largely shielded from
corporation taxes.

 

Eytan Uliel, Chief Executive Officer of Challenger Energy, said:

"Everyone in the Challenger Energy team continues to work on driving our
production business in Trinidad and Tobago forward, and the results of the
second quarter of 2022 represent steady improvements across the board - as
compared to the first quarter production was up, oil sales were up, and cash
flows being generated in-country have increased. It is also important to note
that these results are due to a dedicated focus on managing the Trinidadian
asset portfolio prudently and efficiently, and do not yet reflect any of the
additional production we hope to realise from our planned 2022 work programme,
which as advised in June will be rolled out across the second half of 2022. I
therefore look forward to reporting further progress in the coming months, as
we begin executing our planned work for the remainder of the year."

---

Note 1: Oil sales are predominantly made to Heritage Petroleum Company
Limited, the Trinidadian national oil company, who then apply certain
deductions and adjustments before payment of funds to the Company. These vary
between various licences, and include deduction of Government royalties,
Heritage overriding royalties, facilitation fees, escrow and mandatory
contributions to the abandonment fund, oil impost, and in respect of Goudron
and Inniss-Trinity only, deduction of agreed first tranche volume and addition
of an agreed handling fee.

 

This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014, which forms part of United Kingdom domestic law by
virtue of the European Union (Withdrawal) Act 2018 (as amended).

 

For further information, please contact:

 

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

 Eytan Uliel, Chief Executive Officer
 Strand Hanson Limited - Nomad               Tel: +44 (0) 20 7409 3494

 Rory Murphy / James Spinney / Rob Patrick
 Arden Partners plc - Broker                 Tel: +44 (0) 20 7614 5900

 Simon Johnson
 CAMARCO                                       Tel: +44 (0) 20 3757 4980

 Billy Clegg / James Crothers / Hugo Liddy

 

Notes to Editors

 

Challenger Energy is a Caribbean and Atlantic margin focused oil and gas
company, with a range of exploration, appraisal, development and
production assets and licences, located onshore in Trinidad and Tobago, and
Suriname, and offshore in the waters of Uruguay and The Bahamas. In Trinidad
and Tobago, Challenger Energy has five (5) producing fields, two (2) appraisal
/ development projects and a prospective exploration portfolio in the South
West Peninsula. In Suriname, Challenger Energy has on onshore appraisal /
development project. Challenger Energy's exploration licences in Uruguay,
the South West Peninsula of Trinidad, and The Bahamas offer high-impact
value exposure within the overall portfolio value.

 

Challenger Energy is quoted on the AIM market of the London Stock Exchange.

 

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

 

ENDS

 

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