REG - Challenger Energy - URUGUAY AREA-OFF 1 UPDATE

Challenger EnergyAnnouncement

31/05/2023 07:00

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RNS Number : 0231B  Challenger Energy Group PLC  31 May 2023

31 May 2023

Challenger Energy Group PLC

("Challenger Energy" or the "Company")

 

URUGUAY AREA-OFF 1 UPDATE

Challenger Energy (AIM: CEG), the Caribbean and Americas focused oil and gas
company, with a range of oil production, development, appraisal, and
exploration assets, provides the following update in relation to the AREA
OFF-1 block, offshore Uruguay.

HIGHLIGHTS

•     Volumetric assessment of AREA OFF-1's three primary prospects
(Teru Teru, Anapero, Lenteja) has been completed

•     Assessed estimated recoverable resource (EUR) of approximately 2.0
billion barrels (Pmean, unrisked), and over 4.9 billion barrels in an upside
case (P10, unrisked)

•     Ongoing technical work has also identified additional new leads
and prospects, once evaluation is complete, expected to add to the overall
AREA OFF-1 resource and prospect inventory

•     Formal adviser-led farm-out process has been initiated; strong
interest received

 

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

"We continue to be encouraged by the opportunity that our AREA OFF-1 licence
in Uruguay represents. Our technical work highlights how AREA OFF-1 is clearly
world class acreage with massive resource potential, in what has become a
global exploration hotspot. To capitalise on this, I can confirm that a
farm-out process has now commenced, with very strong initial indications of
interest received from multiple major oil companies. Our target is to complete
a farm-out transaction by year end, so that we can continue to rapidly
progress work on the block, and thereby generate value for shareholders."

 

DETAILS

On 26 April 2023, the Company advised of the initial results of its
geotechnical work program at the Company's AREA OFF-1 licence, offshore
Uruguay. Since that time, the Company has continued with various specific
technical and commercial work streams, and is pleased to provide the following
update.

A.   Volumetric Assessment

A volumetric assessment of the the three primary prospects identified on the
AREA OFF-1 block (Teru Teru, Anapero and Lenteja) has now been completed. This
assessment has indicated:

·    a total Oil in Place (OIP) of ~ 6.5 billion barrels of oil equivalent
(BBOE) across all three prospects (Pmean, unrisked), and over 16 BBOE in an
upside case (P10, unrisked)

·    a total Estimated Ultimate Recoverable resource (EUR) of ~ 2.0
billion BBOE across all three prospects (Pmean, unrisked), and over 4.9 BBOE
in an upside case (P10, unrisked).

 Details are summarised as follows:

 TABLE A: OIL IN PLACE RESOURCE, AREA-OFF-1, URUGUAY (MAY 2023)

                  Oil in Place (mmboe) unrisked
 Prospect                    P10                       Pmean                           P50                                   P90
 Teru Teru        5,116                     2,334                         1,777                                   527
 Anapero          5,267                     2,190                         1,493                                   304
 Lenteja          5,730                     1,969                           690                                     59
 Total            16,113                    6,493                         3,960                                   890

 TABLE B: ESTIMATED RECOVERABLE RESOURCE, AREA-OFF-1, URUGUAY (MAY 2023)

                  EUR (mmboe) unrisked
 Prospect                    P10                        Pmean                               P50                   P90
 Teru Teru            1,647                       740                          547                                  158
 Anapero              1,627                        670                         445                                    88
 Lenteja              1,666                        576                         198                                    17
 Total                4,940                     1,986                        1,190                                   263

 

The Company's internal estimates are that the economic field size for a
discovery in these water and reservoir depths to be in the range of 150 to 200
million barrels. The EUR (P50) for all three primary prospects exceeds or
approximates this commercial threshold.

B.   Mapping, Interpretation and AVO work

As previously advised, the Company has continued with various technical
workstreams to complete prospect mapping, to finalise the prospect and lead
inventory, and to expand amplitude variation vs. offset (AVO) analysis from
initially 6 reprocessed 2D seismic lines to 15, driven by the strong results
from the initial AVO work conducted.

Whilst this work remains to be completed, AVO analysis shows strong Class II /
Class III AVO anomalies have been identified for the Teru Teru and Anapero
prospects and are present on multiple seismic lines, which serves to confirm
the areal extent of both prospects.

C.   Additional Leads and Resource Potential

Ongoing technical work has also identified further leads and prospects on AREA
OFF-1. Interpretation and mapping of these additional leads and prospects is
continuing. It is anticipated that once work is complete, these newly
identified leads and prospects may add further to the overall AREA OFF-1
resource and prospect inventory. The Company will advise of this additional
exploration potential once work is completed.

Farm-out process

As previously advised, the Company has compiled a comprehensive data-room,
which includes all new work conducted inclusive of the recently completed
volumetric assessment.

A formal adviser-led farm-out process has now commenced, with the Company
having received several unsolicited approaches, and strong interest from
leading industry participants.

The farm-out process has been structured to meet the Company's commercial
objective, which is to complete a farm-out transaction prior to the end of
2023. Introducing a strategic partner(s) during 2023 will enable the Company
to accelerate value realisation from the AREA OFF-1 licence, by fast-tracking
3D seismic acquisition, potentially via a multi-client acquisition in early
2024.

An update Uruguay AREA OFF-1 presentation is now available on the Company's
website at www.cegplc.com (http://www.cegplc.com) .

 

For further information, please contact:

 

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

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

 Antonio Bossi / Darshan Patel / Enzo Aliaj
 Zeus - Joint Broker                          Tel: +44 (0) 20 3829 5000

 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 oil production, development, appraisal and exploration 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. In Suriname, Challenger Energy has on onshore appraisal /
development project. Challenger Energy's exploration licences in Uruguay 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/)

 

COMPETENT PERSON STATEMENT

Technical work referred to in this announcement has been undertaken by various
independent third-party specialist advisors. This technical work has been
overseen by Mr. Randolph Hiscock the Company's New Business Director
and Uruguay Managing Director.

In accordance with the AIM Note for Mining and Oil & Gas
Companies, CEG 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.  Randolph Hiscock consents to the inclusion of the information in
the form and context in which it appears.

ENDS

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