REG - Challenger Energy - Trinidad Q3 2022 Update

Challenger EnergyAnnouncement

01/11/2022 07:17

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RNS Number : 8739E  Challenger Energy Group PLC  01 November 2022

 

1 November 2022

Challenger Energy Group PLC

("Challenger Energy" or the "Company")

 

Trinidad Q3 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 Q3 2022 (1 July 2023 to 30
September 2023):

·      Total gross oil production for Q3 2022 was 32,370 barrels,
representing an approximately 5% decline on Q2 2022. The decline reflects the
impact of especially adverse weather conditions causing grid and field level
electrical failures through the quarter (and continuing into the beginning of
Q4 2022), and which resulted in between three to eight days of production
downtime (varying by field), as well as the need to delay / reschedule much of
the production enhancement work that had been planned for the quarter.

 

·      Despite the lower gross oil production, the Company was able to
maintain oil sales at a comparatively constant level during Q3 2022, through
release of inventory build-up in Q2 2022, with total oil sales in Q3 2022
amounting to 31,267 barrels (marginally higher than Q2 2022 oil sales, by
0.3%).

 

·      Gross realised average price per barrel sold in Q3 2022 was
US$85.02, an approximately 13% decrease over Q2 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$1.3 million in Q3 2022. This
represents average net revenue to the Company of US$40.20 per barrel sold, an
approximately 11% decrease on Q2 2022, largely as a consequence of a decline
in oil price.

 

·      The Company's business in Trinidad and Tobago operated on a
break-even pre-tax operating profit basis in Q3 2022 (Q2 2022: US$0.2
million). In aggregate during the first nine months of 2022 the business in
Trinidad and Tobago has generated field operating profits of approximately
US$1.6 million, and a pre-tax operating cash surplus of approximately US$0.6
million (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, and noting that, given the extent
of carry-forward tax losses, the Company is currently largely shielded from
corporation taxes).

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

"We plan for a certain level of disruption each year during the rainy season,
but during the third quarter we experienced considerably more than expected,
resulting in production downtime, and it also became necessary to delay much
of the routine maintenance and production enhancement activities we had hoped
to undertake. At the same time realised oil prices declined from the highs
seen in Q2. Operationally, therefore, the third quarter of 2022 was
challenging. Nonetheless, in aggregate the first nine months of 2022 continues
to represent an improving overall financial performance for the Trinidad
business, with positive field level operating profits (unaudited, before
G&A) and a positive unaudited pre-tax operating profit. During the fourth
quarter, as weather conditions improve, we expect less production disruption,
so we will be able to begin clearing the backlog of delayed field activity,
which should benefit production levels further."

---

Note 1: Oil sales are predominantly made to Heritage Petroleum Company
Limited, the Trinidadian national oil company, which 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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