TIDMCEG
RNS Number : 0592Q
Challenger Energy Group PLC
16 February 2023
16 February 2023
Challenger Energy Group PLC
("Challenger Energy" or the "Company")
2023 Strategy and Work Program 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, provides the following
update on its 2023 strategy and work program:
-- Uruguay : The Company's focus in 2023 will be to rapidly
progress its Uruguay asset, given recent increased industry
interest in Uruguay generally, and in the Company's AREA OFF-1
block in particular, following conjugate margin drilling success by
Shell (the Graff well) and TotalEnergies (the Venus well) and the
award of offshore Uruguayan licences to majors including Shell, APA
Corporation (formerly, Apache) and YPF. The Company anticipates
completing its work commitment for the initial 4-year exploration
period early in Q2 2023 (2D seismic reprocessing and various
technical studies). In parallel, the Company is seeking to advance
a farm-out for the block, with the dual objective of realising
upfront cash and funding at least an accelerated 3D seismic
acquisition program. The Company is also evaluating various
business development options in that country, including offshore
green energy opportunities on or proximate to the AREA OFF-1
block.
-- Trinidad and Tobago : The Company's 2023 strategy is to focus
on its core operations, being the Goudron and Inniss-Trinity fields
in the south-east of Trinidad, from which most of the Company's
production is derived and where almost all equipment / resources
are deployed. Various options to expand activity in this core area
are being considered, including new licence applications, M&A,
and joint programs with neighbouring operators. In parallel, the
Company is seeking to monetise assets not in this core area, so as
to maximise cash and offset risk and work program commitments, but
at the same time retain upside exposure. In line with this approach
on 20 December 2022 the Company announced the conditional disposal
of the Cory Moruga licence, and on 14 February 2023 the disposal of
Caribbean Rex (in both cases, with back-in rights retained). The
disposal of these non-core assets represents less than 10% of
current production. Trinidad in-country costs have been reduced and
certain management changes have been implemented.
-- Suriname : The Company has secured an extension to the
initial exploration term of the Weg Naar Zee PSC in Suriname,
whereby, subject to completion of an agreed technical study by the
end of April 2023, the Company will have a further 12 months (until
April 2024) in which to undertake drilling and testing of a pilot
well. While the technical study is being completed, the Company is
considering various farm-out / partnering options.
-- The Bahamas : The Company continues discussions with the
Government of The Bahamas in relation to the extension of the
Company's licences into a third, three-year exploration period. At
the same time, the Company is seeking alternative means of
achieving value from its considerable historic investment in The
Bahamas.
-- Cash and funding requirements: The Company's cash balance as
at the start of 2023 was approximately US$2.7 million (inclusive of
US$0.5 million restricted cash held in support of a performance
guarantee supplied in Uruguay). The Company has no material debts,
and as a result of the recently announced transaction related to
the South Erin licence, no drilling obligations in Trinidad in
2023. The Company thus anticipates that all planned 2023 Trinidad
field activities, including routine maintenance, heavy workovers
and enhanced oil recovery programs, can be supported from local
operating cashflows. Subject to completion of the recently
announced transactions, the Company expects cash inflows through
2023 of more than US$3 million (additional inflows may also result
from transactions involving other non-core assets, and from a
successful farm-out of the Uruguay asset), and expects corporate
overhead cost for 2023 to be under US$2.5 million.
Eytan Uliel, Chief Executive Officer of Challenger Energy,
said:
"During 2022 we reset Challenger Energy's business following
earlier non-commercial exploration drilling outcomes. We cut costs,
reassessed priorities, reshaped operations, recapitalised, and
settled legacy creditors. Now, as we start 2023, the focus is on
those areas that offer the best scope for near-term value upside.
Uruguay is most obvious, and the plan for AREA OFF-1 is to complete
our initial low-cost work program and then proceed rapidly to
farm-out the asset, as well as build a broader business in the
country. In Trinidad, the goal is to drive profitability from the
main producing assets, while seeking to monetise non-core assets
which add no or little production but carry significant
commitments, ideally whilst retaining exposure to any upside. The
two transactions recently announced are consistent with this
approach.
Overall, Challenger Energy starts 2023 in a strong place.
Existing cash and identified inflows mean we are not under funding
pressure. The business in Trinidad has been refocussed on its core
producing assets while the risk and cost of non-core assets are
being passed to others, but we still retain exposure to success
upsides. In Uruguay, we have an asset that through 2022 became
increasingly more valuable, and where the objective for 2023 is
clear: to capitalise on that value. I look forward to providing
updates as the year progresses."
For further information, please contact:
Challenger Energy Group PLC Tel: +44 (0) 1624
Eytan Uliel, Chief Executive Officer 647 882
WH Ireland - Nomad and Joint Broker Tel: +44 (0) 20 7220
Antonio Bossi / Darshan Patel / Enzo 1666
Aliaj
Arden Partners plc - Joint 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 four (4)
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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END
UPDQELFFXLLXBBF
(END) Dow Jones Newswires
February 16, 2023 02:00 ET (07:00 GMT)
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