TIDMCEG
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
Eytan Uliel, Chief Executive Officer 647 882
WHI Ireland - Nomad and Joint Broker Tel: +44 (0) 20 7220
Antonio Bossi / Darshan Patel / Enzo 1666
Aliaj
Zeus Capital Limited - 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 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
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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END
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