TIDMCEG
RNS Number : 4042L
Challenger Energy Group PLC
03 January 2023
3 January 2023
Challenger Energy Group PLC
("Challenger Energy" or the "Company")
Uruguay Update
Challenger Energy (AIM: CEG), the Caribbean and Americas focused
oil and gas company, with oil production, appraisal, development
and exploration assets across the region, notes recent media
reports and confirms as follows:
-- On 27 December 2022 ANCAP, Uruguay's national energy company,
announced that a further two offshore blocks in Uruguay have been
awarded following competitive bids received in the Second 2022
ANCAP Open Bidding Round.
-- The AREA OFF-4 deep-water offshore block, which is
immediately adjacent to Challenger's AREA OFF-1 shallow water
exploration block, has been awarded to a consortium of Shell and
APA Corporation (formerly known as Apache). AREA OFF-4 was the
subject of competitive bids received from the winning consortium
and from YPF (the Argentinian National Oil Company). ANCAP has
reported that the consortium has committed to undertake extensive
work on the AREA OFF-4 block in the initial 4-year exploration
period, including 3D seismic acquisition.
-- Additionally, the AREA OFF-5 deep-water offshore block has
been awarded to YPF. ANCAP has reported that YPF has committed to
undertake an extensive technical work program on the AREA OFF-5
block in the initial 4-year exploration period.
-- The award of these two blocks is in addition to the award to
Challenger of the AREA OFF-1 block in May 2020, and the awards in
May 2022 of the AREA OFF-2 and AREA OFF-7 blocks to Shell, and the
AREA OFF-6 block to APA.
-- As a result of the recent awards, all but one of the
available offshore exploration blocks in Uruguay have now been
licenced, and, with the exception of Challenger Energy, all have
been licenced to global oil and gas majors.
-- The aggregate value of work now committed across blocks AREA
OFF-2, AREA OFF-4, AREA OFF-5, AREA OFF-6 and AREA OFF-7 by Shell,
APA Corporation and YPF during the next 4 years, in respect of both
technical and exploration activities including well drilling, is
estimated by ANCAP to be in excess of approximately US$230
million.
-- The full text of the announcement by ANCAP is available on
ANCAP's website - www.ancap.com.uy
-- It is noted that in addition to work that will now be
undertaken by Shell, APA Corporation and YPF on their Uruguayan
blocks, various public statements and news releases indicate that
relevant additional work and drilling activities are currently
underway or being planned by multiple parties for 2023, including
additional exploration and appraisal wells being drilled in
Namibia, and 3D seismic acquisition in the adjacent Northern
Argentina Basin. These activities are expected to further the
regional technical understanding and thereby enhance the technical
understanding of AREA OFF-1.
-- In particular, the Company notes recent reports to the effect
that YPF has received environmental approval to acquire 3D seismic
on its CAN 102 block in offshore Argentina, commencing in 2023.
This block is immediately proximate to AREA OFF-1 in Uruguay.
-- Challenger Energy considers that the rapid entry through the course of 2022 into Uruguay of well-regarded international companies, and their commitments to undertake sizeable and meaningful work programs in the near-term (including 3D seismic acquisition and new well drilling), validates both the Company's decision to enter Uruguay in 2020, and underscores the solid technical foundation and excellent value proposition represented by the AREA OFF-1 block.
-- Further, the Company's technical view is that its AREA OFF-1
licence area, and the broader offshore Uruguay play system, is
analogous to offshore Namibia, where there have been recent
prolific, conjugate margin discoveries made by TotalEnergies (the
Venus well) and Shell (the Graff well), and where reported
multi-billion-barrel Cretaceous turbidite reservoirs have been
encountered. Specifically, the AREA OFF-1 licence exhibits the same
Aptian age play source rock and petroleum systems being present on
existing 2D seismic.
-- As noted in previous Company releases , the AREA OFF-1
shallow-water block is in Year 1 of an initial four-year
exploration period, which commenced on 25 August 2022, and during
which time The Company's low-cost work commitment is to undertake
G&G studies, 2D seismic data licencing and 2D reprocessing and
interpretation. This work is currently underway, and Challenger
Energy expects to substantially complete all required work in the
first half of 2023, well ahead of schedule.
-- T he AREA OFF-1 block contains a management estimated
resource potential exceeding 1.5 billion barrels of oil equivalent
recoverable (BBOE), based on current mapping from multiple
exploration plays and leads in relatively shallow waters, and with
significant upside running room. This estimate is corroborated by
formal resource estimates provided by ANCAP of 1.35 BBOE as a P50
expected ultimate recoverable resource.
-- The Company's strategy in relation to the AREA OFF-1 block
remains unchanged, which is to seek an appropriate farm-in partner
in the near-term, that will realise value for the Company, as well
as enable an accelerated work program on the block. Further updates
will be provided as appropriate.
-- An updated presentation in relation to the AREA OFF-1 block
will today be placed on the Company's
website - www.cegplc.com .
Eytan Uliel, Chief Executive Officer of Challenger Energy,
said:
"In 2020, Challenger Energy successfully bid for the AREA OFF-1
block in Uruguay, and in so doing strategically gained first mover
status offshore Uruguay. We were able to secure the block with a
modest initial work commitment, which we are already well advanced
to completing, considerably ahead of schedule.
Subsequently, in May 2022, three more blocks were awarded in a
contested open round, to Shell (two blocks) and Apache (one block).
Now, a further two blocks have been awarded in Uruguay in another
contested open round, to each of a Shell-APA consortium and YPF,
and YPF with partner Equinor is also poised to commence 3D seismic
acquisition in a neighbouring block in Argentina. The estimated
collective spend by those companies over the coming years on these
activities is significant, in excess of $US230 million.
Overall, this means that almost all available offshore acreage
in Uruguay has now been taken up, and apart from Challenger Energy,
all by majors and NOCs who have committed to very sizeable work
programs. This dramatic increase in interest in Uruguay and the
neighbouring region is directly related to the very sizeable
discoveries made in the conjugate margin Orange Basin in early
2022, and through the course of 2023 we hope to move forward with a
farm-in, so as to capitalise on that increased interest and allow
for accelerated work on our block. Further updates will be provided
in due course."
---
In accordance with the AIM Note for Mining and Oil & Gas
Companies, CEG discloses that Mr. Randolph Hiscock the Company's
New Business Director and Uruguay Managing Director, is the
qualified person who has reviewed the technical information
contained in this document. He has a Masters in Science (Geology)
and is a member of the AAPG & PESGB. He 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.
For further information, please contact:
Challenger Energy Group PLC Tel: +44 (0) 1624
Eytan Uliel, Chief Executive Officer 647 882
Strand Hanson Limited - Nomad Tel: +44 (0) 20 7409
Rory Murphy / James Spinney / Rob 3494
Patrick
Arden Partners plc - Broker Tel: +44 (0) 20 7614
Simon Johnson 5900
CAMARCO Tel: +44 (0) 20 3757
Billy Clegg / Hugo Liddy / Sam Morris 4980
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 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
ENDS
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UPDUUSSROSUARAR
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January 03, 2023 02:00 ET (07:00 GMT)
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