REG - Challenger Energy - Update on Sale of Cory Moruga

Challenger EnergyAnnouncement

08/03/2023 07:15

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RNS Number : 2159S  Challenger Energy Group PLC  08 March 2023

 8 March 2023

Challenger Energy Group PLC

("Challenger Energy" or the "Company")

 

Update on Sale of Cory Moruga, future EOR collaboration and

settlement agreement with Predator Oil & Gas Holdings Plc

Challenger Energy (AIM: CEG), the Caribbean and Americas focused oil and gas
company, with oil production, appraisal, development and exploration assets
across the region, is pleased to update that, further to entry into a binding
term sheet with Predator Oil & Gas Holdings Plc and relevant subsidiary
entities ("Predator") as announced on 20 December 2022 ("Transaction"),
Predator has now completed all confirmatory due diligence and the Company and
Predator have entered into fully-termed long-form legal documentation.

The terms remain unchanged from those previously announced on 20 December
2022, being:

·    Predator will acquire 100% of the issued share capital of T-Rex
Trinidad Limited ("T-Rex"), an indirectly wholly-owned subsidiary of the
Company that holds the Company's 83.8% interest in, and is the operator of,
the Cory Moruga licence;

·    the Company will retain the option in the future to repurchase 25% of
Predator's share in T-Rex on an agreed basis;

·    CEG and Predator have established a collaboration in relation to
CO(2) enhanced oil recovery ("EOR") activities and projects in other areas in
Trinidad; and

·    the Company and Predator have agreed to a mutual settlement and
discharge of all disputes and claims in relation to the Inniss-Trinity CO(2)
EOR pilot project.

Completion of the transaction is conditional on consent of the Trinidadian
Ministry of Energy and Energy Industries ("MEEI") to a revised work programme
for the Cory Moruga licence proposed by Predator, as well as agreement of MEEI
to a revision of future fees for the Cory Moruga licence and a settlement /
cancellation of past claimed dues pertaining to the Cory Moruga licence.
Completion of the Transaction will occur 7 days after satisfaction of this
condition. The parties have agreed to work together to secure the required
consents and agreements with MEEI and thus achieve completion as soon as
reasonably practicable on or before 30 May 2023, with a long stop date of 31
August 2023.

Subject to completion, the Transaction will represent a gross potential value
proposition to Challenger Energy of up to US$9 million (as estimated by the
parties to the Transaction), comprising:

·    US$2.0 million payable to the Company by Predator in cash, in
instalments as follows: (i) US$1 million upon completion of the transaction,
and (ii) a further US$1 million on the date that is six months after
completion;

·    a further US$1 million conditional cash payment, payable once the
Cory Moruga field production first reaches 100 barrels of oil per day;

·    the option-value embedded in the retained back-in right;

·    the removal of all ongoing T-Rex financial obligations, and the
elimination of all T-Rex associated liabilities from the Challenger Energy
balance sheet, as well as the elimination of all contingent and potential
liabilities associated with the Cory Moruga licence, whether crystalised or
not;

·    the settlement of any outstanding loan amounts in respect of the
Inniss-Trinity CO(2) EOR pilot project (recognising that absent a settlement
between the parties, such amounts would be recoverable only from incremental
production from the Inniss-Trinity CO(2) EOR pilot project area); and

·    a full and final mutual settlement in respect of all disputes and
claims between the parties in relation to the Inniss-Trinity CO(2) EOR pilot.

The Transaction, in addition to the transaction involving Caribbean-Rex
Limited as announced on 14 February 2023, is in line with the Company's
strategy in Trinidad and Tobago of seeking to monetise assets not in the core
area of operation, so as to maximise cash and offset risk and work program
commitments, but at the same time retain upside exposure.

Further announcements will be made as appropriate.

---END---

 

For further information, please contact:

 

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

 Eytan Uliel, Chief Executive Officer
 WHI Ireland - Nomad and Joint Broker         Tel: +44 (0) 20 7220 1666

 Antonio Bossi / Darshan Patel / Enzo Aliaj
 Zeus Capital Limited - Joint Broker          Tel: +44 (0) 20 7614 5900

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

 Billy Clegg / Hugo Liddy / Sam Morris

Notes to Editors

 

Challenger Energy is a Caribbean and Americas 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 a number of producing fields and appraisal / development projects,
as well as 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/)

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE UK VERSION OF REGULATION (EU) NO 596/2014 WHICH IS PART OF UK LAW BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. UPON THE
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

The person responsible for arranging the release of this announcement on
behalf of the Company is Eytan Uliel, Chief Executive Officer of the Company.

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